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Cost Accounting

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Cost Accounting

The Goal Assignment


Cost Accounting


        In the Beginning of The Goal Alex is struggling to make his plant efficient and has a major backlog of project that needs completion that are past deadline. He is on the firing block if he cannot completely reverse the path he has been heading down. He does by revaluing his goal for his plant and taking that the goal is for his plant is to make money and how he does this is by implementing the theory of constraints to his plant and tackling bottleneck issues that he has been having in his plant.

        Alex first was unaware of the dangers of bottlenecks he was under the impression that these activity had little effect on the bottom line and were just another step in completing the assembly of a project.  To his shock bottleneck are only the biggest indicator of how fast you can get something done but are the slowest part of assembly they are the biggest cause of backups and take up the most time. It is important to identify a bottleneck because they are the first step in improving a plant. Alex discovered that a majority of his products having to go through his slowest machines were his NCX-10 and the heat-treatment department. A bottleneck is not limited to one machine or department but is essential processes that slow down the rest of the plant.

        Once the bottlenecks in the plants were identified the next step for Alex would be to make sure that these machines were always stocked with a backup of work in process. Keeping these bottleneck working is the key to the production expedition. The nonbottleneck operations were organized so that their new goal was simply not to finish whatever was in front of them on their station but to instead to finish what was going to go into the bottleneck. The bottleneck now had a new focus because it was understood by Alex’s team not that any time lost at the bottleneck is time loss on the entire plant. This is different from a nonbottleneck, because an hour loss is just effecting their own time and they can afford to go idle because they are faster production time than the bottleneck.  A bottleneck like the NCX-10 and the heat-treatment department are key to the entire plant, thus should not be idle.

        The next step for Alex’s and his team was to exploit the bottle neck by taking action to increase the efficiencies.  They accomplished this by first organizing the plant in such a way that the inventory meant for bottlenecks were put as first priority. They also staggered the breaks of the workers on the NCX-10 so that it always had a man watching it and making sure that it was working.  For the heating department he made sure that it was always man and changed up the batched sizes so that they were meeting it with more efficiently.

        After Alex’s was able to prove to his team that making these small improvement to the bottlenecks had a  major effect on the bottom-line he was able to begin the next step which was to elevate the bottleneck by increasing it capacity. This was done by buying back older machines of the NCX-10 called the Zmegma to help with the now constant inventory that the bottleneck was now facing from the new backlog in front of it. They also outsourced some of the heating treatment department to other surrounding industrial plants in the town.

        The final step was to evaluate the performance and find new bottlenecks this meant that once these improvements were made to the bottleneck it might not be the slowest and weakest of the group. The focus of the plant should always be on the slowest machines and departments because they set the pace for the entire plant and if they are not addressed they can slow down everything again. They are the pace setter for the rest of the plant. Once again Alex team used a system of color tapes to let the hourly workers what jobs were the most important and what could wait for other jobs to be complete. He also informed them of how to correctly accomplish jobs more efficiently.

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