Professional Documents
Culture Documents
All rights reserved. No part of this book may be reproduced or utilised in any form
or by any means, electronic or mechanical, including photocopying, recording, or
any information storage retrieval system, without permission in writing from the
publisher.
2
A GOAL GAME
Acknowledgements
This simulation and book is based entirely on the work of Dr Eliyahu M. Goldratt
and on our experience gained in working with customers from all types of
organisations both for and not for profit.
Throughout the book…
3
Also from North River Press
WWW.NORTHRIVERPRESS.COM
Many Theory Of Constraints books, tapes, and other material are available.
Authors include researchers and practitioners of TOC in banking,
education, health care, and the stock market.
The Goal
The Race
The Theory Of Constraints
The Haystack Syndrome
Critical Chain
Its Not Luck
Necessary But Not Sufficient
4
Contents
Introduction................................................................................................................1
TOC Applications..................................................................................................1
TOC Measures........................................................................................................2
The Five Focusing Steps of TOC..........................................................................4
The Process of On-Going Improvement (POOGI)............................................4
The Challenge Environment................................................................................6
Operating The Challenge Program.....................................................................7
The Challenges.........................................................................................................11
Challenge 1 - The Perfect World Plant..............................................................11
Challenge 1 – Results & Explanation................................................................14
Challenge 2 - The Balanced Capacity Plant.....................................................19
Challenge 2 – Results & Explanation................................................................23
Challenge 3 –The Efficient Plant........................................................................26
Challenge 3 – Results & Explanation................................................................27
Challenge 4 –The Unbalanced Capacity Line..................................................30
Challenge 4 – Results & Explanation................................................................32
Challenge 5 –Applying the TOC Solution (DBR)............................................34
Challenge 5 – Results & Explanation................................................................39
Challenge 6 – Implementing the TOC Solution (DBR)...................................43
Challenge 6 – Results & Explanation................................................................46
Challenge 7 – Further Questions To Explore...................................................48
Implementing TOC..............................................................................................49
Appendix..................................................................................................................50
Simulator Controls...............................................................................................50
Install.....................................................................................................................55
Uninstall................................................................................................................55
TOC Glossary.......................................................................................................56
TOC EXECUTIVE CHALLENGE A GOAL GAME
Introduction
The Goal was written in 1984. Since then many millions of people from all walks of
life have read it. The Goal remains a best seller today. The Goal has sustained success
partly because it brings valuable new knowledge in a form that is easy and fun to
acquire and partly because it is a good read. Alex Rogo the protagonist in The Goal
works with his mentor Jonah to save his plant. The TOC Executive Challenge book
and software is designed to help you apply TOC. Like The Goal it is easy and fun to
follow. It also provides you with the chance to test The Goal TOC theory. Does it
really work? The book leads you through a series of seven challenges that teach the
different aspects of the TOC application portrayed in The Goal. The software
provides the test world for you to undertake the challenges. As you play the
challenges your understanding of TOC and the mind set needed to make big benefits
from it develops. When you have a picture of the TOC solution the software
provides a safe place to practice how it should be implemented in the real world. The
book provides the explanations needed to fully understand the challenges. The book
provides a process to guide implementation in the real world.
1
TOC EXECUTIVE CHALLENGE
TOC M E A S U R E S
In chapter 4 of The Goal, Alex meets Jonah, who introduces him to three new
measures: Throughput, Inventory, and Operating Expense. To run the challenges
you will need to understand these three measures and how they relate to the bottom
line measures of Profit, Return On Investment and Cash Flow.
2
A GOAL GAME
Return On
Investment = Throughput - Operating Expense
Inventory
In most situations where T, I, and OE are used it is not the absolute value of P or ROI
being calculated. It is the change or potential change that is of interest. So in this case
it is the change in T, I, and OE that is used in the formula
(∆ = Delta small change).
∆P = ∆T – ∆OE
∆T – ∆OE
∆ROI =
∆I
3
TOC EXECUTIVE CHALLENGE
4
A GOAL GAME
5
TOC EXECUTIVE CHALLENGE
The model has all the components of a production business. There is customer
demand, in challenge 1 the demand is for brief cases, and executive cases. There are
resources to undertake work. There is limited time to achieve the output needed. The
time limitation is 40 hours and this is the same in all seven challenges. Each
challenge is run over 5 days that are 8 hours long. There are limits to how much cash
is available and the financial performance of the business is monitored throughout.
The goal in each challenge is to make the maximum amount of money possible.
The big difference between the real world and this model is that you have a much
better overview in the model than in a real business. In addition the area to the left of
6
A GOAL GAME
the two product images above provides a complete live flow picture, which is not
available in most plants. In this are you can see the material which is purchased at
the left had side of the challenge board, progressing across the board (left to right) as
the various tasks are assigned to resources arriving in the box immediately to the left
of a product image, when it has completed all its production stages .
The boxes in the flow area represent the task that need to be undertaken by the
resources in the factory floor. The colour of the task matches the colour of the
resource that undertakes the task.
2
You can click to close the splash form or it will close after a few seconds automatically
7
TOC EXECUTIVE CHALLENGE
Each time a Challenge is started the Challenge control form is hidden. To open or
unhide the Challenge control form use the File menu on the Challenge board.
File > Challenge Control.
The Challenge you want to run is selected from the Challenge bar at the top of the
form or click the next button which will automatically take you to the next Challenge
in the sequence.
GETTING STARTED
To get to known the challenge controls please select challenge 1 now. The challenge
as shown in Figure iii above should open when you click the number 1 in the
challenge bar on the Challenge control form shown in Figure iv above.
Please follow the instructions below to learn how to start the challenge run, to set up
a machine and to learn how to buy material.
Start the challenge by clicking the run start button
in the clock area highlighted on the challenge board to
the right of this paragraph.
You will see the clock begins to run. Now point to and
click on the Blue machine (number 3) in the Factory
Floor. A 3set up form will open.
Click on the drop down button at the right of the
Select Task box and click on the r1: c4 item in the list. The
r1: c4 is the coordinate of the task. If you look at the left
hand side of the challenge board you will see the rows
which are labelled r1, r2, r3, r4, r5, and r6. If you look just
below the factory area you will see the columns of labelled
c1, c2, c3, c4, c5, c6, and c7. To locate the task at r1:
c1 move along the row r1 until you are just below
the column c1, the task referred to by this code is A resource setting for a
the where the row and column in intersect. task
3
Alternatively, it is possible to click and drag the task to set up from the flow diagram
area below the resources to the machine of the same colour as the task.
8
A GOAL GAME
understand what all the elements in the factory floor are please point at each now
and read the pop up comment that appears.
Now click on the white square to the right of the
r1 row indicator in the purchasing area. A
purchase form will open.
Enter a number ten into the white box on the
purchase form and click the Buy/Close button. Ten units of raw material r1 will
appear in the white square next to the r1 row indicator in the purchasing area and
$45 X 10 = $450 will be deducted from your cash position. This can be seen in the
Finance area at the top and to the right of the challenge board. The cash position at
the start of the challenge was $2,500 it will be $2,050 when the purchase suggested
above has been completed.
On now know how to buy materials, and set up machines. When you run the
challenge you will want to assign task to resources to achieve the overall goal of the
challenge, which will require you to have product manufactured and sold. The task
map is shown in the Flow Diagram Area
below the Factory Floor explains how this is
achieved. The flow diagram describes how
the products are made. It shows what
materials are needed for each product, it
shows the tasks and the time that a tasks
takes to be completed. Point to and pause
over the elements in the Flow area now and
read the pop up comment to see what each
part is. You will find tasks names, the time a
task tasks, you will also see that the cursor changes to a hand when you pause over
the task button. The hand indicates that you can drag that task to and drop it on a
resource. When the drag icon is dropped on a resource this tells the resource to set
up for that task. The resource must be the same colour as the task for this process to
work.
You will also see that in challenge 1 you need to make and sell 45 brief cases and
45 executive cases. If you look in the flow area just to the left of the product images
you will see the market demand and the selling price for the product. The brief case
selling price is $200 and the market demand is 45.
Following the black lines along the tasks back from the product enables you to
identify all the tasks that need to be completed in order to make that product. When
you reach the extreme left hand side you will see the materials that are needed for
that product. For example the Brief case task line is: r1: c7, r1: c6, r1: c5, r1: c4, r2: c2
and r2: c2 requires one unit from r1: c1 and r3: c1 as it is an assembly operation. To
make r1: c1 you need to buy one unit of raw material, which we have called r1 as it is
9
TOC EXECUTIVE CHALLENGE
next to the r1 row indicator. Similarly, to make one unit of r3: c1 you need to buy one
unit of raw material r3.
Whilst the challenge is open take this opportunity to play. Buy materials, set up tasks
and produce some product, learn to operate the challenge controls. Don’t worry
about trying to make a lot of money just take some time to familiarise yourself with
how to run the challenge. When you feel ready move on to the challenge section of
the book. The next section in this book will guide you through each challenge.
Record your results in the space provided as you work. Further on in the text for
each challenge we provide results explanations and conclusions. You should not
read these until you have undertaken the challenge in the software.
There is now a new game on line for instant download that enables you to test the
simulator supplied with this book before purchasing the whole book. Click here to
go to the downloadable game.
10
A GOAL GAME
The Challenges
Table 3: A Typical List Of The Problems That Make Managing Production Difficult
Vendors are late with materials Machines break down
Workers are absent from work Quality is poor
Customers change their minds Work must be re-done
Operators are poorly trained and Data is unavailable or
undisciplined inaccurate
11
TOC EXECUTIVE CHALLENGE
You will be pleased to hear that the perfect world conditions below exist in
Challenge 1:
Cash
Inventory
Operating Expense
Number of Breakdowns 0
12
A GOAL GAME
If Work In Process (WIP) built up in front of a task did you respond and set
up a resource to process the material?
If a resource became idle did you respond by looking to find it more work?
Did you feel frustrated if you could not get an idle resource working
immediately?
Do you have sufficient inventory in place so that you are able to start the
next week?
Ideally there should be 5 units after r2: c2 and 15 units after r5:c3.
Feel free to run the challenge again but read through the Challenge results and
explanations below before moving onto challenge 2.
13
TOC EXECUTIVE CHALLENGE
Table 5: A Typical List Of The Problems That Make Managing Production Difficult
Managing the plant in Challenge 1 should have been a piece of cake but for most
players it is not. It is common to make a loss and have a large amount of unneeded
inventory in the plant at the end of the week. It is common for players to feel
frustrated at the end of the week with their own performance. It is also not uncommon
given modern managerial belief that high inventory is bad for there to be no inventory left in
the plant at the end of the week (is this good or bad?)
A ‘better managed’ Challenge 1 will achieve results similar to those in the table
below.
14
A GOAL GAME
All rights reserved. No part of this book may be reproduced or utilised in any form
or by any means, electronic or mechanical, including photocopying, recording, or
any information storage retrieval system, without permission in writing from the
publisher.
There is now a new game on line for instant download that enables you to test the
simulator supplied with this book before purchasing the whole book. Click here to
go to the downloadable game.
15