“The Goal” is a book which explains on how to go about attaining goals in real life and business. The Goal provides a convincing tale that challenges the way we look at how we evaluate operational improvement. The author identifies a larger problem where always following the company guidelines and policies in place can limit the mind of its employees. This paper will identify and discuss the essential operational decisions, strategies and principles used in the book and lessons learnt from the key findings. The author utilizes the 10 strategic operational management decisions to bring a turnaround to his plant. 1. Product Design – UniCo’s Barington plant produced very fine and high quality products to meet international competition in Japan. The change in product design was not in the scope of the change process.
2. Quality – The quality inspection was performed on the parts right at the end of the entire process increasing the percentage for defected parts and scraps thereby increasing the cost of producing a quality part. After discussion with Jonah, the quality inspection was moved at the front of the plant. By doing the defected parts were moved out of assembly way ahead of time and which saved raw-material, machine time and eventually less cost to produce quality goods. By fewer defects moving within the whole system, number of quality goods produced increased.
3. Location Selection – The town of Bearington was a small industrial town and ideal location for this manufacturing plant. Low real estate cost and cheap labor costs were favorable to the plant. The plant was also not far from its headquarters and the clients it serviced.
4. Process – The most remarkable change happened was in the change of process. New process was designed and successfully implemented throughout the manufacturing plant which was a major factor of the turnaround. Here are the few key processes that brought the big change in the first month of production after the change process. (i) Bottlenecks were identified. They were run continuously to maximize output. (ii) The parts were tagged with red/green tag at the bottlenecks. Red for bottleneck parts to be worked on first as to not hold up the bottleneck machine, and green for the non-bottleneck parts.(iii) Quality inspection moved from the end of process to before heat treating the parts. This helped in utilizing the boiler to the maximum by working on only quality parts.
5. Layout Design – There was no major layout design proposed during this change due to lack of time and money the plant had.
6. Human Resource and Job Design – With the new change plan taking effect, there were some changes with respect to the breaks the labor takes. The change was discussed with the union and was put in place by taking the union in confidence. The change plan was well communicated within the plant to everyone through the plant manager and new ways of working were laid out to each department and their heads. There was more ideal time for the workers than before to to increase if efficiency of the plant.
7. Supply-Chain Management – Alex reduced the batch size of his non-bottlenecks to half which reduced the work-in-process on the floor to half. This meant the plant only needed half the investment in work-in-process to keep the plant working. The plant had their suppliers increase the frequency of deliveries and also reduce the quantity of each delivery. This took some good negotiating through purchasing, but they agreed sicne it was a win-win situation for both parties.
8. Inventory – Managing inventory played a major role in the turnaround of the plant because this directly affected the cash flow of the plant. Inventory is represented by money tied up in things the system intends to sell, i.e. any item within the system that is being or will be sold. This includes raw material from suppliers, work in progress and standing stock levels. It was...
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