The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt
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Pursue knowledge, not for its own sake, but to make our world better and to make life more fulfilling
Seek how things work in reality and why it works that way
Being a scientist means looking at reality and thinking logically and precisely about what we see
Have the courage to face inconsistencies between what we see and deduce and the way things are done
The challenging of basic assumptions is essential to breakthroughs
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
Productivity is meaningless unless you know what your goal is
The goal of a manufacturing organization is to make money
You may be doing something, but is it going to help you make money?
Make money by increasing net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow
I am all I have
Throughput, inventory, and operational expense
Throughput is the rate at which the system generates money through sales
If you produce something but don’t sell it, it’s not throughput
A measurement not clearly defined is worse than useless
Inventory is all the money that the system has invested in purchasing things that it intends to sell
Operational expense is all the money that the system spends in order to turn inventory into throughput
A plant in which everyone is working all the time is very inefficient
The only way to create excess inventories is by having excess manpower
A balanced plant is a plant where the capacity of each and every resource is balanced exactly with demand from the market
The goal is to reduce operational expense and reduce inventory while simultaneously increasing throughput
Dependency limits the opportunities for higher fluctuations
Dependent events mean that an event, or a series of events, must take place before another can begin… the subsequent event depends upon the one prior to it
Statistical fluctuations are information that varies from one instance to the next
Distinguish between bottleneck resources and nonbottleneck resources
A bottleneck is any resource whose capacity is equal to or less than the demand placed upon it
A non bottleneck resource is any resource whose capacity is greater than the demand placed on it
You should not balance capacity with demand
Balance the flow of products through the plant with demand from the market
The bottleneck flow should be on par with demand
As you climb the ladder and your responsibilities grow, you should learn to rely more and more on yourself
First, you should find out exactly what it is you want to learn
Don’t give the answers, just ask the questions
Throughput inventory operating expenses
In order to improve the strength of the chain, you must find the weakest link
Step 1: identify the bottlenecks of the system
Step 2: Decide how to exploit the bottlenecks
Step 3: subordinate everything else to the above decision
Step 4: elevate the bottlenecks of the system
Step 5: if, in a previous step, a bottleneck has been broken go back to step 1
- Identify the constraints of the system
- Decide how to exploit the system's constraint
- Subordinate everything else to the above decision
- Elevate the constraints of the system
- Warning! If I’m the previous steps a constraint has been broken, go back to step 1, but do not allow inertia to cause a systems constraint
Identify the core problem
What to change? What to change to? And how to cause the change?
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