Flow means that inventories in the operation are moving. When inventory is not moving, inventory accumulates. Accumulation of inventory takes up spac… - Eliyahu M. Goldratt

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Flow means that inventories in the operation are moving. When inventory is not moving, inventory accumulates. Accumulation of inventory takes up space. Therefore, an intuitive way to achieve better flow is to limit the space allowed for inventory to accumulate. To achieve better flow, Ford limited the space allotted for work-in-process between each two work centers.

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About Eliyahu M. Goldratt

Eliyahu Moshe Goldratt (March 31, 1947 – June 11, 2011) was an Israeli physicist who became a business management guru

Biography information from Wikiquote

Also Known As

Native Name: אליהו גולדרט
Alternative Names: Eliyahu Goldratt Eliyahu Moshe Goldratt
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"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.

STEP 1. Identify the system’s bottlenecks. (After all it wasn’t too difficult to identify the oven and the NCX10 as the bottlenecks of the plant.)
STEP 2. Decide how to exploit the bottlenecks. (That was fun. Realizing that those machines should not take a lunch break, etc.)
STEP 3. Subordinate everything else to the above decision. (Making sure that everything marches to the tune of the constraints. The red and green tags.)
STEP 4. Elevate the system’s bottlenecks. (Bringing back the old Zmegma, switching back to old, less “effective” routings. . . .)
STEP 5. If, in a previous step, a bottleneck has been broken go back to step 1.

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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.

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