Eliyahu M. Goldratt Quotes

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

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.

Well, since we started keeping data on the bottlenecks, I’ve been noticing I’m able to predict several weeks in advance what each bottleneck will be working on at a particular time. See, as long as I know exactly what’s in queue, I just take the average setup and process times for each type of part, and I’m able to calculate when each batch should clear the bottleneck. Because we’re only dealing with one work center, with much less dependency, we can average the statistical fluctuations and get a better degree of accuracy.

For the ability to answer three simple questions: ‘what to change?’, ‘what to change to?’, and ‘how to cause the change?’ Basically what we are asking for is the most fundamental abilities one would expect from a manager.

What is the real goal? Nobody here has even asked anything that basic.

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.

They’re measurements which express the goal of making money perfectly well, but which also permit you to develop operational rules for running your plant,” he says. “There are three of them. Their names are throughput, inventory and operational expense.

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.

A third way to waste a bottleneck’s time is to make it work on parts you don’t need.” “You mean spare parts?” asks Bob. “I mean anything that isn’t within the current demand,

Maybe I should start with a question,” he says. “Do you agree that inventory is a liability?” “Of course, everybody knows that. And even if we didn’t know it, the last few months have shown to what extent inventory is a liability.

that’s a third assumption that’s wrong,” I say. “We’ve assumed that utilization and activation are the same. Activating a resource and utilizing a resource are not synonymous.

Putting it precisely, activating a resource and utilizing a resource are not synonymous.

"While they go get the others, I figure out the details. The system I’ve set up is intended to "process’’ matches. It does this by moving a quantity of match sticks out of their box, and through each of the bowls in succession. The dice determine how many matches can be moved from one bowl to the next. The dice represent the capacity of each resource, each bowl; the set of bowls are my dependent events, my stages of production. Each has exactly the same capacity as the others, but its actual yield will fluctuate somewhat.

There are three measurements which express the goal of making money perfectly well, but which also permit you to develop operational rules for running your plant. Their names are throughput, inventory and operational expense.

For a foreman, heat-treat seems like a very small kingdom, not much of a prize. There is nothing intrinsically attractive about running that operation, and having only two people to manage makes it seem like no big deal. To prevent it from seeming like a demotion to them, I make a point to go down there periodically on each of the shifts. In talking to the foreman, I drop some rather direct hints that the rewards will be great for anyone who can improve the output of heat-treated parts.