1. What is the Goal for Alex’s firm?
Ans. Generally speaking, the goal for the firm is to make more profits. They want to increase net profit while simultaneously increasing Return of Investment and Cash flow. More specifically,the Goal of Alex’s firm is to increase throughput while simultaneously reducing both inventory and operating expense and thus making money for the system
2. What noise was there in Alex’s environment that distracted him from seeing the goal?
Ans. Alex was always under the impression that to stay competitive in the market, they have to everything which was necessary for them to be more efficient, reduce costs and increase productivity. Also according to him the introduction of the robots moved the efficiency’s average to more than 90 percent and one department had a thirty-six percent improvement in its productivity. The company on the whole was more concerned about the efficiency of the system which blocked Alex’s vision for reaching the actual goal.
The local performance measurements that he was using to gauge “efficiency” and “productivity” were not really telling him anything, since his metrics were not created with his goal in mind.
3. What are the symptoms/problems that Alex is experiencing? Divide these into two categories: 1) root causes and 2) results of root causes.
Ans. One major problem which was found together by Alex, the controller, the production manager and the inventory control manager was “Excessive Inventory”. The root cause of this excessive inventory was the over production of unnecessary parts all in an effort to keep production metrics high. The result of this root cause was that the robots manufactured few parts ...