Alex learns from Jonah several concepts which are polar opposites from what he has been told before about business operations. Jonah reveals that: 1. Money is most important to management over efficiency.
2. Cost accounting is the number one enemy of productivity.
3. A plant in which everyone is working all the time is inefficient.
The next morning Alex has the opportunity to take his son on a hiking trip with other boys and he has an another revelation regarding work. During the hike there is one particular child Herbie that is the slowest in the bunch that can not keep up with the rest of the other’s. The slowest child was the bottleneck in this situation. Alex finally decides to stop the children and put the slowest child first as the leader to resolve the issue. The slowest became the leader and the group could go only as fast as the leader. It doesn't stretch, but it's still going as slow as Herbie. Herbie must be made faster, or gain throughput capacity, in order for the whole line to gain throughput. Herbie's backpack load is lightened and distributed among the troop and the entire troop doubles its pace as a result of the change Alex's observations as a result of the hiking experience can be summarized as follows: 1. Final throughput is measured by the rate of the last and slowest operation in the sequence. 2. Inventory is equal to the length between the leader and the backdoor, which should be minimized. 3. Operational expense is roughly measured by the energy expended, which must be conserved. 4. Some resources need to have more capacity than others, especially towards the end of the operating sequence.
Jonah introduces Alex to the concept of bottlenecks and non-bottlenecks. Jonah defines these terms as follows. "A bottleneck is any resource whose capacity is equal to or less than the demand placed upon it. "A non-bottleneck is any resource whose capacity is greater than the demand placed on it." Jonah explains that Alex should not try to...
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