The goal from Wliyahu M. Goldratt

 The Goal  from Wliyahu M. Goldratt

• productivity is meaningless unless you know what your goal is
• Does anyone genuinely understand what we're doing here?
• Cash-Flow: if you dont, nothing else matters. Its a measure of survival: stay above the line and youre okay, go below and youre dead
• Throughput
• Inventory
• We are always talking about the organization as a whole - not about the manufacturing department, or about one plant, or about one department within the plant. We are not concerned with local optima
• a part in the orga can be superb and super efficient - if it doesnt increase througput / output it worth nothing - you just shift backlogs and inventory
• "Just pay me the value of what you learn from me" - a consultant
• The goal is not to reduce operational expense by itself. The goal is not to improve one measurement in isolation. The goal is to reduce operational expense and reduce inventory while simultaneously increasing throughput.
• Processes fluctuate. These accumulate throughout a process. And mostly it's an accumulation of slowness
• Balance flow, not capacity
• The idea is to make the flow through the bottleneck equal to demand from the market
• The whole system can only be as fast as the throughput of the bottleneck
• "But we have a union to deal with" - "So talk to them. They have a stake in this plant. They are not stupid. But you have to make them understand"
• When you make a non-bottleneck do more work than this machine, you are not increasing productivity
• Since we cut batch sizes, work is flowing through the plant more smoothly than ever! SMALL BATCH SIZES
• Common Sense is not common at all
• Way of leading to the answers through asking questions ("Socratig approach")
• Dont give the answer, just ask the questions.
• We re-engineered the deal. We came back with a counter-offer that was feasible and that the client liked even more than his original request.
• Almost every big company is oscillating every five to ten years from centralization to decentralization, and then back again
• When you dont know what to do you can always reshuffle the cards - reorganize
• Culture change - from "cost world" to "throughput world"
• Process of ongoing improvements
• Steps:
• 1) Identify the systems bottlenecks
• 2) Decide how to exploit the bottlenecks (bring bottleneck itself to maximum throughput)
• 3) Subordinate everything else to the above decisions (everything marches to the tune of bottleneck)
• 4) Elevate the systems bottlenecks (Improve throughput through measures outside bottleneck)
• 5) if a bottleneck has been broen go back to step 1
• Or
• 1) Identify the systems constraint(s)
• 2) Decide how to exploit the systems constraint
• 3) Subordinate everything else to the above decision
• 4) Elevate the systems constraint(s)
• We must put our finger on the core problem, on the root that causes them all
• The problem is that the time it takes material to be converted to a finished product, ready for delivery to the client, depends more on the time it has to wait in queues and not so mich on the touch time to process the order.