The Goal: Bringing back old machines to supplement the NCX-10

Not rated yet. Be the first who rates this item!

Jonah is walking around Alex's plant, searching for ways to improve their processes and increase throughput. Alex doesn't know it at the time, but Jonah is using the Five Focusing Steps of TOC. He suggest using old equipment to elevate the capacity of the NCX-10 constraint. Lou is initially concerned about the effects to the plant cost profile of operating old equipment.

D: aquire/ operate old equipment
D': not use old equipment
B: elevate a system constraint
C: prevent increasing costs
A: keep the plant open
Click on the icons on the arrows to see assumptions and injections
In order to keep the plant open I must elevate a system constraint and in order to elevate a system constraint I must aquire/ operate old equipment. But, in order to keep the plant open I must also prevent increasing costs and in order to prevent increasing costs I must not use old equipment. I can't both aquire/ operate old equipment and not use old equipment.
D-D'There is no way to partially use old equipment. I can either choose to use it, or not.
B-D1. There is no other equipment in the plant that can do the work of the NCX-10
2. Running this constraint at full capacity will still be less than market demand
2. If there was already excess capacity on the NCX-10 constraint, there would be no need to elevate it. However, if this excess capacity did exist, the NCX-10 would actually not be a constraint. If market demand was the constraint, elevating the NCX-10 would be useless.
C-D'1. We do not have all three machines necessary to supplement the NCX-10
2. It will require extra labor costs to operate these machines
3. Running more equipment will increase energy bills/costs
1. We do already have 2 of the 3 machines required. The third machine was actually acquired very cheaply - only for the rental cost of the truck to transport it.
2-3. Keeping labor/energy costs down is fairly irrelevant to the overarching goal of increasing throughput and making money.
A-B1. The constraint determines the amount of throughput the plant can make
2. Increasing plant profits/throughput is the only way to ensure the plant will stay open
A-C1. Management evaluates plant progress based on traditional cost accounting measures
2. Cutting costs is the goal of the plant and the only way to increase profit/throughput
2. According to throughput-world thinking, cutting costs is NOT the goal for the company. The true goal is to focus on throughput and increasing profit - not decreasing costs.