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Review of 《The Goal》
1. What are the methods described in The Goal for identifying a bottleneck?
‘A bottleneck is any resource which is equal to or less than the market demand placed on it.’ To find out the bottleneck in the case, they’ve tried different ways.
At first they tried to look at all the resources and compare them with market demand. They believed the one in which demand is greater than capacity is the bottleneck. Soon they found this method was too complicated and time-consuming to execute, not to mention the inaccuracy of data.
Then they figured out that they could talk to expediters to find out the parts most frequently in short supply, which were probably the ones passing through a bottleneck.
Building on this method,
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Also explain and relate to course concepts the statement made by Jonah that a factory “balanced with demand” will soon experience bankruptcy.
Through the dice game or match bowl experiment, Alex realized that with a balanced plant, because of "statistical fluctuations" and "dependent events", throughput goes down and inventory along with operating expenses goes up. The reason was in the designed balanced plant there was no reserve. When the kids downstream in the balanced model got behind, they had no extra capacity to make up for the loss. And as the negative deviations accumulated, they got deeper and deeper in the hole.
A further analysis was about covariance, the impact of one variable upon others in the same group. In a linear dependency of two or more variables, the fluctuations of the variables down the line will fluctuate around the maximum deviation established by any preceding variables. That explains what happened in the balanced model.
So as what Jonah claimed, every factory has bottlenecks and bottlenecks are a must. It is impossible to set up a model perfect balancing capacity with demand. The variation and dependent events will cause the bottleneck to move from operation to operation in different stages. What the company should do is to balance the flow with demand, not the capacity with demand. And the company should adjust strategies to deal

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