Lesson 3: The core conflict

If over-activation and stealing are so damaging, why do good managers keep doing them? Because they are caught in a real conflict, and both sides of it are legitimate.

Two cultures, one plant

Every manager wants to run the shop floor effectively. To do that, they need to control cost, and they need to ensure flow.

Controlling cost seems to call for local efficiency: batch similar jobs, avoid set-ups, keep every machine busy.
Ensuring flow seems to call for fast order completion: small lots, work in due-date order, switch whenever an urgent order needs it.

You can’t do both at once, so most plants switch between them. For the first three weeks of the month the culture is efficiency; in the last week, when dispatch targets loom, it becomes a rush for flow. Setups that were “too expensive” on the 5th are run without a second thought on the 28th. Look at a plant’s daily dispatch figures: if most of the month’s output leaves in the last week, you are looking at this conflict.

The assumption underneath

The conflict rests on one belief: an idle resource is waste, and a set-up is a waste of capacity.

That belief is true for exactly one resource: the constraint. An hour lost there is an hour lost for the whole plant. For every other resource it is false. A non-constraint has spare capacity by definition, so an hour of idle time or an extra set-up costs nothing; it doesn’t reduce what the plant can ship.

Once you see that, the conflict disappears. You can focus on flow everywhere and still protect cost, because the only time that matters is the constraint’s time, and flow protects it better than batching ever did.

Pause and think: a paint shop fears that smaller batches will mean more set-ups and wasted paint. After the plant switches to running for flow, what usually happens to the number of set-ups in that paint shop?

It goes up sharply, as feared
It stays the same
It goes down
Painting stops being needed

Counter-intuitive, but common. Most set-ups in a batching plant are unplanned: emergency runs when assembly is missing a single part. Once parts flow in step, those emergency requests nearly vanish, and with them most of the set-ups.

The Road Runner work ethic

What should a non-constraint do, then? TOC’s answer is sometimes called the Road Runner work ethic:

When there is work to do, do it as fast as possible.
When there is no work to do, don’t make work. Don’t produce ahead of time or produce what isn’t needed.

A conventional efficiency measure can’t tell the difference between a worker who sprinted on the right order and one who cherry-picked the easy jobs. Both look “efficient”. That’s why the measure ends up rewarding exactly the behaviour that hurts flow.

Why removing the measures isn’t enough

Here is the part most improvement programmes miss. Give anyone 50 envelopes to prepare and no targets at all, and they will fold all 50, then stuff all 50, then seal all 50. People batch by instinct. Give a machinist three jobs, two of them similar, and they will run the similar two together, measure or no measure.

So abolishing efficiency targets on its own changes little while the floor is full of work to batch from. The cure is to take away the opportunity: release less work onto the floor. With 15 orders on the floor instead of 45, there is little left to cherry-pick, the instinct does little harm, and the real constraint becomes visible. You will try this yourself in lesson 5.

“An hour saved at a non-bottleneck is a mirage.” — Dr. Eliyahu Goldratt

Check your understanding

Answer all five. Get four right to complete the lesson.

1. The core conflict of operations is between…

Sales and finance
Improving local efficiencies and completing orders fast
Quality and quantity
Day shift and night shift

Both serve a real need: controlling cost and ensuring flow.

2. The hidden assumption behind the conflict is…

Customers are always right
Inventory is an asset
Workers prefer overtime
An idle resource is waste; a set-up wastes capacity

True only at the constraint. Elsewhere there is spare capacity by definition.

3. Most of a plant’s output leaves in the last week of the month. This usually signals…

A switch from an efficiency culture to a flow culture at month-end
Strong customer demand at month-end
A well-run plant
Too few machines

Three weeks of batching, then a rush to hit dispatch targets.

4. The Road Runner work ethic means…

Always run at full speed
Never stand idle
Work fast when there is work to do, and don’t make work when there isn’t
Run long batches to save set-ups

Efficiency when needed, and effectiveness: no producing ahead of time.

5. Why doesn’t abolishing efficiency targets fix cherry-picking by itself?

Because workers ignore management
Because people batch by instinct whenever there’s plenty of work to choose from
Because targets are required by law
Because the constraint needs targets

The cure is to release less work, so there is little to cherry-pick from.