Goldratt's vs. Tesla Company's Bottleneck Resolution | Free Essay Example

Goldratt’s vs. Tesla Company’s Bottleneck Resolution

Words: 568
Topic: Business & Economics
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Introduction

Bottlenecks are specific issues or problems that occur in the operating process and slow down the entire work of plants and organizations. Although bottlenecks often hurt operational processes, they can be used to improve the efficiency of organizations if identified correctly. The paper aims to present how bottlenecks are described and approached in the book The Goal and compare this approach to the recent bottleneck resolution made by the company Tesla.

Bottlenecks in the Goal

In the book, the plant’s management struggles to remove the bottleneck that affects the capacity of the whole plant. In this case, these bottlenecks are machines whose capacity is equal to the demand, whereas non-bottlenecks operate in a better capacity. To address the problem, the protagonist, Alex, suggests using a system of tags that plan workers would use to work on high- and low-priority tasks (red tags are used for bottlenecks, and green tags are used for non-bottlenecks) (Goldratt and Cox 178). While at first, the system works well, after some time new bottlenecks begin to emerge. However, as one of the characters finds out later, these bottlenecks are not technically new, they are created from low-priority tasks related to non-bottlenecks (Goldratt and Cox 214). Since the majority of the products require parts created by the bottleneck machine, the inventory keeps piling up, and orders keep being delayed. The system of tags is reviewed in such a way that both the bottleneck machine and the non-bottleneck deliver parts of the product in time. Eventually, the team develops a plan for how to approach bottlenecks correctly:

  1. Identify the bottleneck
  2. Understand how it can be used
  3. Ensure that decisions target the bottleneck and its usage
  4. Address and remove bottlenecks
  5. Repeat with a new bottleneck if the old bottleneck is removed

Thus, eventually, the plant learns to use bottlenecks to make operations more efficient.

Tesla’s Bottleneck

The bottleneck that decreased Tesla’s efficiency and desired output was caused by the company’s partner in production, Panasonic, which manufactured batteries for Model 3 constructed by Tesla. As some parts of these batteries were hand-crafted, the production processes at the Gigafactory, owned by both partners, decreased significantly. Tesla’s representatives complained about the bottleneck and its negative influence on the company since it did not allow Tesla to produce 1,500 vehicles as it was previously planned (“Tesla’s Model 3 Bottleneck Getting Fixed”). The bottleneck was removed in the following way: the processes that required human involvement were automated, which increased the production speed and broke the bottleneck (Archer). As can be seen, the company had a similar approach to that of Alex Rogo, who insisted on transforming the processes within the plant and adjusting them to break the bottleneck. Therefore, the approach chosen in Panasonic resembled the one discussed in The Goal, although it had fewer implementation steps.

Conclusion

In my opinion, identification and successful exploitation of bottlenecks should be used by many companies to speed up their manufacturing processes. With the rising popularity of automation, more bottlenecks can be broken, as some of them (as shown previously) are created due to specific processes that require human involvement. New bottlenecks will emerge, but there is an existing framework that managers can use. Sometimes, bottlenecks are difficult to break, but it does not mean that they cannot be exploited to improve the company’s efficiency. It is also important for managers to ensure that their actions do not become bottlenecks as well.

Works Cited

Archer, Sett. “Tesla Jumps More Than 3% after Reportedly Solving Its Model 3 Bottleneck (TSLA).” Markets Insider. 2017, Web.

Goldratt, Eliyahu M., and Jeff Cox. The Goal. Great Barrington, MA: The North River Press Publishing Corporation, 1984.

“Tesla’s Model 3 Bottleneck Getting Fixed, Panasonic CEO Says.” The New York Post. 2017, Web.