Eliyahu M. Goldratt Quotes

Quality alone cannot be the goal. It’s important. But it’s not the goal.

With the bottlenecks more productive now, our throughput has gone up and our backlog is declining. But making the bottlenecks more productive has put more demand on the other work centers. If the demand on another work center has gone above one hundred percent, then we’ve created a new bottleneck.

So this is the goal: To make money by increasing net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow.

[Throughput is the] rate at which the system generates money through sales.

You know what, it really highlights another problem. Changing the measurements’ scale of importance, moving from one world into another, is without a doubt a culture change. Let’s face it, that is exactly what we had to go through, a culture change. But how are we going to take the division through such a change?

I write down the three measurements which Lou and I agreed are central to knowing if the company is making money: net profit, ROI and cash flow.

Throughput,” he says, “is the rate at which the system generates money through sales.

Eli Goldratt passed away at his home in Israel on June 11th, 2011, in the company of his family and close friends.

More importantly, our software worked. I don't just mean that it didn't bump, or that it performed according to the written specifications, or that it was efficient in producing reports. It really worked

Alex, 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,” says Jonah.

What can I possibly do to be more competitive? I’ve done cost reduction. No other manager in this division has cut costs to the degree I have. There is nothing left to trim. And, despite what Peach says, my efficiencies are pretty damn good. He’s got other plants with worse, I know that. But the better ones don’t have the competition I do. Maybe I could push efficiencies some more, but . . . I don’t know. It’s like whipping a horse that’s already running as fast as it can.

[Inventory is measured by] the money the system invests in purchasing things the system intends to sell.

productivity is the act of bringing a company closer to its goal. Every action that brings a company closer to its goal is productive. Every action that does not bring a company closer to its goal is not productive.

If the first thinking process should lead us to answer the question ‘what to change?’ the second thinking process should lead us to answer the question ‘what to change to?’ I can already see the need for a third thinking process.” “Yes, so can I. ‘How to cause the change.’ ” Pointing to the fifth step I add, “with the amount of inertia that we can expect in the division, the last one is probably the most important.

"Well, I don’t. Not absolutely. But adopting "making money’’ as the goal of a manufacturing organization looks like a pretty good assumption. Because, for one thing, there isn’t one item on that list that’s worth a damn if the company isn’t making money.