Eliyahu M. Goldratt Quotes

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.

Four: Too many wasteful ‘synchronization' meetings interrupted the actual work.

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

I’m talking about a production employee who is idle because there is no product to be worked on.” “Yes, that’s always bad,” I say. “Why?” I chuckle. “Isn’t it obvious? Because it’s a waste of money! What are we supposed to do, pay people to do nothing? We can’t afford to have idle time. Our costs are too high to tolerate it. It’s inefficiency, it’s low productivity — no matter how you measure it.” He leans forward as if he’s going to whisper a big secret to me. “Let me tell you something,” he says. “A plant in which everyone is working all the time is very inefficient.

In summary, both Ford and Ohno followed four concepts (from now on we’ll refer to them as the concepts of flow): Improving flow (or equivalently lead time) is a primary objective of operations. This primary objective should be translated into a practical mechanism that guides the operation when not to produce (preventsoverproduction). Ford used space; Ohno used inventory. Local efficiencies must be abolished. A focusing process to balance flow must be in place. Ford used direct observation. Ohno used the gradual reduction of the number of containers and then gradual reduction of parts per container.

In order to significantly increase sales we have to increase the perception of value of the market for our products.

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.

Bob comes into the office with a smear of grease on his white shirt over the bulge of his beer gut, and he’s talking nonstop about what’s going on with the breakdown of the automatic testing machines. “Bob,” I tell him, “forget about that for now.

When a proto-type — a new initiative — doesn't work, we face two alternatives: one is to bitch about reality and the other is to harvest the gift it just gave us, the knowledge of what has to be corrected.

"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.

Companies are so immersed in the mentality of saving money that they forget that the whole intention of a project is not to save money but to make money.

[Operating expense is defined as] all the money the system spends in turning inventory into throughput.

Tell me how you measure me, and I will tell you how I will behave.

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