The Goal: a process of Ongoing Improvement

parts built by the robots. But in some instances we can’t get enough of certain
other parts to assemble and ship our orders.’’
Bob says, "It isn’t that we can’t 
get
enough parts—it’s more that we can’t
seem to get them when we need them. That’s true even with a lot of the robot
parts. We’ll have a pile of something like, say, a CD-50 sit around for months
waiting for control boxes. Then we’ll get the control boxes, but we won’t
have something else. Finally we get the something else, and we build the
order and ship it. Next thing you know, you’re looking around for a CD-50
and you can’t find any. We’ll have tons of CD-45’s and 80’s, but no 50’s. So
we wait. And by the time we get the 50’s again, all the control boxes are
gone.’’

---

"And so on, and so on, and so on,’’ says Stacey.
"But, Stacey, you said the robots were producing a lot of parts for which we
don’t have product orders,’’ I say. "That means we’re producing parts we
don’t need.’’
"Everybody tells me we’ll use them eventually,’’ she says. Then she adds,
"Look, it’s the same game everybody plays. Whenever efficiencies take a
drop, everybody draws against the future forecast to keep busy. We build
inventory. If the forecast doesn’t hold up, there’s hell to pay. Well, that’s
what’s happening now. We’ve been building inventory for the better part of a
year, and the market hasn’t helped us one damn bit.’’
"I know, Stacey, I know,’’ I tell her. "And I’m not blaming you or anybody.
I’m just trying to figure this out.’’
Restless, I get up and pace.
I say, "So the bottom line is this: to give the robots more to do, we released
more materials.’’
"Which, in turn, increased inventories,’’ says Stacey.
"Which has increased our costs,’’ I add.
"But the cost of those parts went down,’’ says Lou.
"Did it?’’ I ask. "What about the added carrying cost of inventory? That’s
operational expense. And if that went up, how could the cost of parts go
down?’’
"Look, it depends on volume,’’ says Lou.
"Exactly,’’ I say. 
"Sales
volume... that’s what matters. And when we’ve got