I’ve been really enjoying reading The Goal.
It’s not your typical business management book. It’s a romp through a manufacturing facility that’s headed toward disaster and can only be saved by its overworked manager, Alex Rogo.
Personally, the book has helped me understand the #1 reason people buy our products: production bottlenecks. Manufacturers run into the (very common) problem of producing a large number of plates that can’t be used in production because they don’t fit in the battery cases. This “bleeding-neck problem” is simply caused by variations in plate thickness. And it leads to more than just scrap lead. It causes costly production delays.
There’s a great chapter in the book in which Rogo is discussing the cost of inventory that’s backed-up behind a machine that can’t process parts fast enough. He’s standing there, watching the parts pile up, and figures he’s looking at about $15,000 worth. Then he realizes that’s only the tip of the iceberg. The real problem is the $1,000,000 in finished goods that these $15,000 parts go into.
When you frame the problem this way, taking action to fix bottlenecks becomes a lot more compelling. It’s never just about the cost of the parts behind the bottleneck. It’s about the downstream (second- and third-order) effects. It’s about the decline in throughput that’s preventing you from shipping out finished products.
What’s the solution? In the book, one way Rogo figures out how to clear bottlenecks is by doing quality inspections upfront. Sound familiar? In battery pasting lines, it’s not usually the pasting machine that causes bottlenecks. Instead, you’ll typically find bottlenecks at the cast-on-strap machine when it’s fed plates with varying thicknesses.
This is by far the #1 reason people buy our products. They see this bottleneck and they understand that upfront quality control is the correct solution. And the result is immediate: increased throughput. And of course the downstream effect of this is more batteries sold.
Cheers,
Steve