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Comment by Zanni | Hacker News Reader

Surprising reference to The Goal [1], which Mr. Beast "used to make everyone read ..." and still recommends. The Goal is a business novel about optimizing manufacturing processes for throughput and responsiveness rather than "efficiency" and is filled with counter-intuitive insights. Presenting it as a novel means you get to see characters grapple with these insights and fail to commit before truly understanding them. Excellent stuff, along the lines of The Phoenix Project [2], with which I assume many here are already familiar.

[1] https://en.wikipedia.org/wiki/The_Goal_(novel) [2] https://www.goodreads.com/book/show/17255186-the-phoenix-pro...

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Theory of Constraints is fascinating because, as MrBeast points out here, it seems extremely obvious. I've had numerous interactions on this site where a person dismisses an insight from ToC as "obvious" and then 2 sentences later promulgates the exact type of intuition that ToC disproves.

Yeah, this is the brilliance of the novel format. Someone presents an insight, and it can see obvious in isolation but then seems obviously wrong in context. "Of course we should favor throughput over efficiency" is obvious until you realize it means, for example, allowing idle time on incredibly expensive machines to favor responsiveness, which just seems wasteful.

In the novel, you get to see the characters bang their heads against these "paradoxes" again and again until it sinks in.

Interesting -- I'll have to read The Goal! I've only read the reference material around ToC, so this sounds additive :)

>is obvious until you realize it means, for example, allowing idle time on incredibly expensive machines to favor responsiveness, which just seems wasteful.

Weird how things that seem to make sense in one context seem to make no sense in another context. If you told me a factory runs their widget making machine at 70% capacity in case someone comes along with an order for a different widget or twice as many widgets, at first glance think that's a bad idea. If your customers can keep your widget machine 100% full, using only part of the machine for the chance that something new will come along seems wasteful. And through cultural osmosis the idea of not letting your hardware sit idle is exactly the sort of thing that feels right.

And yet, we do this all the time in IT. If you instead of a widget machine told me that you run your web server at 100% capacity all the time, I'd tell you that's also a terrible idea. If you're running at 100% capacity and have no spare headroom, you can't serve more users if one of them sends more requests than normal. Even though intuitively we know that a machine sitting idle is a "waste" of compute power, we also know that we need capacity in reserve because demand isn't constant. No one sizes (or should size) their servers for 100% utilization. Even when you have something like a container cluster, you don't target your containers to 100% utilization, if for no other reason than you need headroom while the extra containers spin up. Odd that without thinking that through, I wouldn't have applied the same idea to manufacturing machinery.

I see the parallel you're drawing but even the core idea is I think different enough to be worse dissecting.

In manufacturing, you keep spare capacity to allow for more lucrative orders to come in. If you don't expect any, you run at 100%. For instance when Apple pays TSMC all the money in the world to produce the next iPhone chip, they won't be running that line at 70%, the full capacity is reserved.

Or if you're a bakery, you won't keep two or three cake cooking spots just on case someone comes in witb an extraordinary order, you won't make enough on that to cover the lost opportunity.

We run our servers at 70% or even 50% capacity because we don't have control on what that capacity will be used for, as external events happen all the time. A manufacturers receiving a spike of extra orders can just refuse them and go on with their day. Our servers getting hit with 10x the demand requires efforts and measures to protect the servers and current traffic.

Factories want to optimize for efficiency, server farms want to pay for more reactivity, that's the nature of the business.

> Or if you're a bakery, you won't keep two or three cake cooking spots just on case someone comes in witb an extraordinary order, you won't make enough on that to cover the lost opportunity.

I think it's always worth thinking about what you can leave slack / idle space in. For example, you might not keep multiple stations free, but you might invest in a larger oven than you need to make the cakes you currently make. Or you might invest in more bakery space than you need, including extra workspace than you can utilize at 100%. Not because you necessarily anticipate higher demand, but because you might get a customer that's asking for a cake bigger than your standard. Or because you might have a customer placing a large order and need some extra room to spread out more, or to have a temporary helper be able to do some small part of the job even if they can't use the space as a full station.

But also idleness might look like "you don't spend all of your time baking orders for customers". If you never build in slack for creating, experimenting and learning, you'll fall behind your competition, or stagnate if your design and art is a selling point.

I think even for a company like TSMC these ideas are important to understand.

To give you an example TSMC might have a factory with 10 expensive EUV lithography tools, each capable of processing 100 wafers per hour. Then they have 4 ovens, each able to bake batches of 500 wafers per hour.

TSMC could improve efficiency by reducing the number of ovens, because they are running only at 50% capacity. But compared to the cost of the EUV tools, the ovens are very cheap. They need to be able to produce at full capacity, even when some ovens breakdown, because stopping the EUV tools because you don't have enough ovens would be much more expensive then operating with spare capacity.

Even for a server farm, you can prioritize the web traffic and still use the excess capacity for CI or whatever.

This is a very key insight many need to be aware of. The thing that can be sacrificed in order to obtain efficiency is resilience.

To master the bend not break model.

You can make a bridge that can handle a 10 ton load for half the material of one that can take 20 tons. 99% of the time this isn't an issue but that outlier case of a 18 ton truck can be disastrous. This is why power cables have sag in them, in case there is an extreme cold snap. Why trees sway and bend with the wind so that anything but the most extreme evens do not break them; with that analogy, grass is much weaker but could handle even higher winds. The ridged are brittle.

I'm not saying to not strive for efficiency but you also have to allow those efficiency gains to provide some slack in the system. Where I work, there is a definite busy season. So for most of the year, we operate at about 70% utilization and it works out great. Most people are not stressed at all. It means that when those 2 months of the year when it is all hands on deck, everyone is in peak condition to face it head on.

In my previous job in manufacturing, efficiency was praised over everything else, it was 100% utilization all of the time. So when the COVID rush came, it practically broke the business. After a year of those unrelenting pace, we started to bleed out talent. Over the next 6 months, they lost all the highest talent. A year later from those I still spoke with, they said they lost about two thirds of their business over the next 12 months, they are now on the edge of collapse.

Slack allows a bend, pure efficiency can lead to a break. There is a fine line between those two that is very difficult to achieve.

> using only part of the machine for the chance that something new will come along seems wasteful.

Because it is. My brother works in industrial manufacturing machinery supplies. I can assure you the overwhelming majority of manufacturing machines on the planet are not only run constantly but as near to 99.999% as possible. So much that they are even loath to turn them off for critical maintenance rather preferring to let the machine break down so they don't get blamed for being the person to "ruin productivity"

This book sounds like one of those flights of fancy armchair generals are so found of going on.

Perhaps it works in small boutique shops making specialized orders but that is a slim minority of the overall manufacturing base. I could see why the advice would appeal to HN readers.

Yeah it mostly only works for small boutique shops like the Toyota Production System or Ford’s manufacturing line.

And yes, a lot of manufacturing doesn’t behave this way. That’s the “counter” part of “counter-intuitive” revealing itself.

This comment is yet another of these excellent cases in point!

You really don’t see how “they’re afraid to turn them off even for critical maintenance” might be actually suboptimal behavior in the long run?

One of the most insightful things I heard someone say at Toyota (in an interview) was that they replace their tools (drill bits and the like) at 80% wear instead of letting them get to 100% and break.

Why waste that 20%?

Because if the tool breaks and scratches a $200K Lexus, then that might be a $20K fix, or possibly even starting from scratch with a new body! Is that worth risking for a $5 drill bit they buy in boxes of 1,000 at a time? No.

Then the interview switched to some guy in America looking miserable complaining how his bosses made him use every tool until breaking point. He listed a litany of faults this caused, like off-centre holes, distorted panels, etc...

And you wonder why Tesla panels have misaligned gaps. Or why rain water leaks into a "luxury" American vehicle!

Toyota uses price premium and reputation to achieve this. Its not something every company can do, and I don't mean in theory. I mean that economics don't support it. Most buyers cannot and will not pay extra premium for reliablity. The reality is letting them break/damage/fix/replace actually is cheaper overall otherwise it would not be the popular choice.

If tomorrow Ford decided to start this process it would be a decade before the market believed that hey had changed their ways. Would they survive this gap? IDK the new ford Mach-E is not selling so I doubt it but I"m not an economist. People don't buy fords because of the reliability. They buy it because it's cheaper and the risk of downtime is less important to them than the price premium. Don't forget that in order to achieve that lost resource return you must be disciplined all the time and most people/corps cannot achieve that.

Toyota’s strategy is cheaper, and their cars are very cost competitive.

PS: “It’s too expensive to save money with your methods!” Is the most common response I get from customers to this kind of efficiency improvement advice. Invariably they then proceed to set several million dollars on fire instead of spending ten thousand to avoid that error. It’s so predictable, it is getting boring.

I would really recommend coming into these conversations with more curiosity!

Toyota makes some of the cheapest and some of the most expensive cars on the market. They don't "use" their reputation to do this, their reputation is the result of excellent production.

You're missing the point with Ford, which is an example of another very successful manufacturer who uses similar techniques/philosophy as Toyota, which are not similar to what your brother's machine shop does.

Edit: Sry, missed your Poe's law. People buy fords because they are cheaper for the most part. People that have more money buy Toyota. This is just market segmentation of a couple of the biggest brands.

Companies that have hammered out an effective cost/production/time ratio are not something you can compete with without becoming the same thing as them. Which is why factory managers are literally afraid to turn them off for any reason.

My brother constantly tells me about how when they do repairs they will see something within 1-3 months of failing and tell the factory manager. He said almost without exception they always ask will it increase the repair time "TODAY" and of course the answer is yes. They always decline and deal with it when it breaks at a greater time/cost. I think this is more an effect of the toxic work relationship that has become forced on everyone by MBA's.

What are you arguing here exactly? Most production systems work the same way as your brothers', which is to say they suck. We're pointing to a methodology that has a very strong track record of making production systems that don't suck, such as Toyota's and Ford's (empirical disproofs of your claim that such an approach is only applicable to boutique shops).

>Toyota's and Ford's (empirical disproofs of your claim that such an approach is only applicable to boutique shops).

Where was this provided? I didn't see you or any poster provide claim or evidence that Toyota or Ford intentionally leave unused production capacity. I had a busy day so I may have missed it somewhere.

Far as I'm aware they also run their assembly as close to 99.999% of the time as possible.

My brother is not a mft. He works for an engineering company that makes and maintains manufacturing equipment. He has worked in nearly every major company you can name's manufacturing plants fixing their stuff or installing new stuff. Its a whole world I did not know about until he started. I'm just forwarding some stories he tells. Not sure why you think you know more than all the people involved.

It really depends on whether the capacity is fixed or not. If capacity is fixed and demand is unlimited (eg. because you just can't get more EUV light sources this year) then you should probably run as close to 100% utilisation as possible.

But if you can easily scale production capacity, you should not strive for 100% utilisation. You should expand capacity before you reach 100%, because if you are running at 100% you will not be able to take any more orders and lose the opportunity to grow your business.

This sounds intriguing. Of note for anyone with an audible membership: The Goal is in the free library.

It's also included in Spotify Premium for free.

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