"Al, the trouble is there is nothing for the guys down there to do while heat-treat is cookin' the parts. You load up one of the damn furnaces, shut the doors, and that's it for six or eight hours, or however long it takes. What are they supposed to do? Stand around and twiddle their thumbs?"
"I don't care what they do between times as long as they get the parts in and out of the furnace pronto," I say. "We could have done almost another batch of parts in the five hours of waiting for people to finish what they were doing elsewhere and change loads."
"All right," says Bob. "How about this: we loan the people to other areas while the parts cook, but as soon as the time is up, we make sure we call them back immediately so—"
"No, because what is going to happen is everybody will be very conscientious about it for two days, and then it'll slip back to the way it is now," I say. "I want people at those furnaces standing by, ready to load and unload twenty-four hours a day, seven days a week.
[...]
"You bet," says Bob. "But you know you're taking about two, maybe three people per shift."
"Is that all?" I ask. "Don't you remember what lost time on a bottleneck costs us?"
I sit there marveling that we're going to reduce the efficiency of some operations and make the entire plant more productive. They'd never believe it on the fifteenth floor.
SpaceX has a different design philosophy than most other launch providers. Most launch providers optimize for performance efficiency, SpaceX optimizes for cost efficiency.
example:
The Ariane 5 uses different engines for their first and second stages while the Falcon 9 uses the same engines for their first and second stage. Using different engines for the lower and upper stages is pretty standard among launchers because having one engine designed to operate in the lower atmosphere and one engine designed to operate in the upper atmosphere/vacuum leads to better performance and is one of the reasons the Ariane 5 high performance delivering payloads to GTO relative to the Falcon 9. However, from a manufacturing perspective it is much more expensive to build two different engines than it is to just use one type of engine which is part of the reason a Falcon 9 launch is around three times cheaper than an Ariane 5 launch.
"[...] But Admiral, all this emphasis on personnel and training is a terrific drain on us. You wouldn't believe how much time goes into it. It just isn't efficient use of all this high-powered technical talent you've recruited. Not to mention your own time".
"Efficiency isn't the objective, Dunford, effectiveness is. Don't confuse effectiveness with efficiency. I'm convinced that the only way to be effective, to make a difference in the real world, is to put ten times as much effort into everything as anyone else thinks is reasonable. It doesn't leave time for golf or cocktails, but it gets things done."
End the practice of awarding business on the basis of price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
11a. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
11b. Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
Teamwork is sorely needed throughout the company. Teamwork requires one to compensate with his strength someone else's weakness, for everyone to sharpen each other's wits with questions. Unfortunately, the annual rating defeats teamwork. Teamwork is a risky business. He that works to help other people may not have as much production to show for the annual rating as he would if he worked alone.
It is fundamentally the confusion between effectiveness and efficiency that stands between doing the right things and doing things right. There is surely nothing quite so useless as doing with great efficiency what should not be done at all.