Here at Mingo, all of our employees participate in a book club. Sound silly? It’s not.
Once a week, we meet (via Zoom) to discuss a few chapters from a book. The book topics vary – maybe it’s a manufacturing book or a book on sales. Every person regardless of role participates. Why?
Well, it improves our processes and frames our mindsets. As a company, it’s been incredibly eye-opening and beneficial.
(And, it’s one of the topics routinely discussed on our Zen and the Art of Manufacturing podcast. A book club that promotes discussion and new ideas is a sign of a great culture so we might as well practice what we preach.)
We’ve covered The Toyota Way, Crossing the Chasm, and the Innovation Stack.
But, most recently, we finished The Goal by Eliyahu M. Goldratt.
If you’re in manufacturing, you may be familiar with this book, and if you’re not, we highly suggest you order a copy and start reading. It’s quite engaging and informative, probably because it explains key concepts through a story arc rather than blanket educational statements. We really can’t state enough just how enlightening this book is.
It should come as no surprise that we gained immense knowledge from this book, and this blog is going to serve as our summary in hopes of sharing some of that knowledge with the online universe.
- Don’t focus on single machine efficiencies
- Build around your bottleneck
- Look at your additional capacity
- Focus on the culture of your company
- Emphasize the plant holistically, not locally
About The Goal
In summary, The Goal is a story of learning. Alex Rogo is a manager of a plant that is performing terribly. The numbers are bad. Orders are consistently delivered to customers late. It’s a mess.
Rogo is tasked with improving the plant or shutting it down. If it fails, the plant will become another statistic in the industrial town where many, many other plants have shuttered. It seems to be a monumental task.
But, Rogo runs into a former professor who teaches him and his team how transformation can occur. Specifically, it focuses on identifying bottlenecks, improving the plant holistically, looking for additional capacity, and focusing on the culture of the company.
Local Optimization vs. Holistic Optimization
The main theme of the book is local optimization versus looking at the factory as a whole. You learn about this concept in the book and it’s what you learn in lean thinking, too.
Throughout The Goal, it’s shown that if you optimize for one thing and focus on one thing, it doesn’t really help you in the end. Sure, it will help you at the moment, but down the road, well, it’s probably not going to be as helpful.
This even applies in job shop settings, much to people’s surprise.
Eventually, that one thing is solved, and it becomes no longer important; another problem will appear and then you’re back to square one of having to solve that one problem. It’s a constantly revolving circle.
You have to look at the whole picture.
There can be a lot of nuance to this, though. For example, if you have a bottling line and your filler is your bottleneck, that’s what’s going to tell you what’s happening on the line. But, eventually, you’re going to upgrade something, fix the filler, put in higher volume packaging, whatever it may be, and look at the bottleneck and think, “Maybe we should fix that because we have so much excess capacity here.” It comes back to the constantly evolving problem-solving. If you’re only focusing on local efficiencies rather than the plant holistically, you won’t get very far.
Most Software Providers Don’t Follow This
What’s incredibly interesting about this, especially from a software provider perspective, a lot of manufacturers want the holistic view, but they can’t get it. Manufacturers know taking this approach is going to provide the most benefit at the end of the day, but vendors are selling the local optimization solution, which doesn’t solve their problems. They’re answering questions like, “How do I increase OEE and performance or how do I decrease downtime on this one machine, on the bottleneck?”
This is important, but at some point, it’s no longer important, just like in The Goal because the bottleneck starts to move. If you don’t have visibility beyond the bottleneck, then it doesn’t really help you.
The same thing is true from the preventive maintenance side. When you think about all of the condition monitoring stuff that people are doing, it’s, “I want to predict failure on this motor inside of this machine, but I have no idea what’s running.” Is this an anomaly? Maybe. Maybe not. You need a holistic solution, not a local optimization tool.
The future of manufacturing software is going to have to look at the holistic view. (We hope to be leading this charge here at Mingo.)
Downsides of Local Optimization Manufacturing Software Solutions (MES)
An example of this type of “local optimization” software is the MES system. Originally, it was intended to look at the holistic view, but it didn’t work. It got overly complicated because it tried to be all things to all people instead of following the 80/20 rule. In reality, it should’ve solved the most critical issues and not fall into the weeds of what a few customers want.
Another downside to these traditional software platforms like MES is they are harder to hook up to equipment. You couldn’t gather data as easily. You couldn’t analyze the data as easily. Very few of them were cloud-based and as flexible as they are today. They weren’t as inexpensive as options in the market now. iPads didn’t exist then.
Think about all of the new technologies we’ve gotten in the last 10 years that make all of this so much easier.
All of the legacy systems weren’t build for the new technologies of today. You can’t run SAP on an iPad. You need a PC and all of the headaches that go with it. You’ve got to manage a PC, update it, it’s got Windows pre-loaded, there are viruses, it crashes all of the time, the list goes on and on.
The IT load on that is way higher than deploying a bunch of iPads and using Apple Operating Systems and tools for those.
The holistic manufacturing software solutions are the future of manufacturing because they’re not only easier to use, but they’re solving the problems on the floor. Those solutions are ensuring the health and efficiency of the company are improving, as a whole.
The Goal is an Essential Book to Read
So, essentially what we’re saying here is that The Goal teaches the reader, through story and example, the importance of calm and flow, simplicity, holistic approaches, and the idea of starting small and expanding.
This is who Mingo is. This is what we want to convey to the world of manufacturing. Look at problems holistically, not locally, just as you learn in The Goal.
We cannot explain just how great this book is. Add it to your list. Oder it from your local bookstore. If you’re in the manufacturing industry, it’s a must-read. If you’re not in manufacturing, well, it’s still helpful from a concept perspective. So, once you finish reading, let us know what you think.
This blog is about a review and takeaways, so what did you learn that we should include in our book review?