There are 3 operation measurements Rogo can use to improve his plant. The first is to sell more products. This examines if the throughput goes up. The second is to look at if the company laid off anybody, looking at if the operational expense went down. Finally, he can check to see if the inventories went up or down.
During a Boy Scout hiking experience Rogo realized similarities between manufacturing and the speed at which the boys were hiking. There was one kid who set the pace of the entire group for the hike. Although others were going faster, there was a gap created meaning that it didn’t matter how fast the leader was going if the fat boy slowed down the remainder of the group. Through the hiking example Rogo came to the conclusion that if capacity was perfectly balanced with demand then excess inventory would cease to exist and therefore shortage of certain parts would disappear.
The hiking example was an example of a bottleneck. Nobody behind the fat kid get to the finish until he did. His speed determined the throughput of the entire group of hikers finishing. This concept is one that could be applied to manufacturing. What happens in manufacturing is not an averaging out of the fluctuations, but an accumulation of the fluctuations.
The fat kid was able to speed up after the weight of his pack was more evenly distributed among the group. Throughput went up and inventories went down so to speak.
There are “fat kids” in the plant run by Rogo. After talking to Jonah, he learned that he needs to balance flow, not capacity. Rogo decided to focus on the bottlenecks at the plant. Like distributing the weight of the pack...