Eliyahu M. Goldratt Quotes

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

Fundamentally, a manager is looking to answer these questions: ‘what to change?’,’ what to change to?’ and ‘ how to cause the change?’

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.

If the goal is to make money, then (putting it in terms Jonah might have used), an action that moves us toward making money is productive. And an action that takes away from making money is non-productive.

My system does not make sense at all, but by God it’s working.

Yes, there is. We’ve just been talking

Actually, the flow should be a tiny bit less than the demand.

We need financial measurements for sure — but we don’t need them for their own sake. We need them for two different reasons. One is control; knowing to what extent a company is achieving its goal of making money. The other reason is probably even more important; measurements should induce the parts to do what’s good for the organization as a whole.

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.

Yet . . . why can’t we all just walk at the same pace as Ron and stay together? I’m watching the line when something up ahead catches my eye. I see Davey slow down for a few seconds. He’s adjusting his packstraps. In front of him, Ron continues onward, oblivious. A gap of ten . . . fifteen . . . twenty feet opens up. Which means the entire line has grown by 20 feet. That’s when I begin to understand what’s happening. Ron is setting the pace. Every time someone moves slower than Ron, the line lengthens. It wouldn’t even have to be as obvious as when Dave slowed down. If one of the boys takes a step that’s half an inch shorter than the one Ron took, the length of the whole line could be affected. But what happens when someone moves faster than Ron? Aren’t the longer or faster steps supposed to make up for the spreading? Don’t the differences average out? Suppose I walk faster. Can I shorten the length of the line? Well, between me and the kid ahead of me is a gap of about five feet. If he continues walking at the same rate, and if I speed up, I can reduce the gap — and maybe reduce the total length of the column, depending upon what’s happening up ahead. But I can only do that until I’m bumping the kid’s rucksack (and if I did that he’d sure as hell tell his mother). So I have to slow down to his rate. Once I’ve closed the gap between us, I can’t go any faster than the rate at which the kid in front of me is going. And he ultimately can’t go any faster than the kid in front of him. And so on up the line to Ron. Which means that, except for Ron, each of our speeds depends upon the speeds of those in front of us in the line.

So I’ve got limits on how fast I can go — both my own (I can only go so fast for so long before I fall over and pant to death) and those of the others on the hike. However, there is no limit on my ability to slow down. Or on anyone else’s ability to slow down. Or stop. And if any of us did, the line would extend indefinitely. What’s happening isn’t an averaging out of the fluctuations in our various speeds, but an accumulation of the fluctuations. And mostly it’s an accumulation of slowness — because dependency limits the opportunities for higher fluctuations. And that’s why the line is spreading. We can make the line shrink only by having everyone in the back of the line move much faster than Ron’s average over some distance.

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.

Look, we give sales a rigid lead time for each product. So if it’s not in finished goods, those are the numbers they should use to promise to clients. Yeah, they deviate from it, but not by much. Maybe there should be another way. Maybe the quoted lead times should be done case by case, according to the load on the bottlenecks. And maybe we shouldn’t regard the quantities required as if we have to supply them in one shot.

The more complicated the situation seems to be, the simpler solution must be. .. People believe that reality is complex, and therefore they are looking for sophisticated explanations for complicated solutions. .. Reality it is actually simple.

What is needed is just the courage to face inconsistencies and to avoid running away from them just because “that’s the way it was always done”.