Eliyahu M. Goldratt Quotes
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And it became even more interesting when we realized that we were visiting the same six or seven work centers every time. They’re not bottlenecks, but the sequence in which they perform their jobs became very important. We call them ‘capacity constraint resources,’ CCR for short.
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His best-selling book, The Goal, has sold over 6 million copies and has been translated into 35 languages. It continues to be required reading in major business schools.
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If you don't manufacture a quality product all you've got at the end is a bunch of expensive mistakes.
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Since the strength of the chain is determined by the weakest link, then the first step to improve an organization must be to identify the weakest link.
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Kanban system directs each work center when and what to produce but, more importantly, it directs when not to produce. No card—no production.
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If Ralph can determine a schedule for releasing red-tag materials based on the bottlenecks, he can also determine a schedule for final assembly. Once he knows when the bottleneck parts will reach final assembly, he can calculate backwards and determine the release of the non-bottleneck materials along each of their routes. In this way, the bottlenecks will be determining the release of all the materials in the plant.
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I say an hour lost at a bottleneck is an hour out of the entire system. I say an hour saved at a non-bottleneck is worthless. Bottlenecks govern both throughput and inventory.
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The improvement efforts of other companies are misguided since they are aimed at achieving cost savings rather than being totally focused on improving the flow.
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To efficiently produce quality products sounds like a good goal. But can that goal keep the plant working? I’m bothered by some of the examples that come to mind. If the goal is to produce a quality product efficiently, then how come Volkswagen isn’t still making Bugs?
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That’s how Jonah knew. He was using the measurements in the crude form of simple questions to see if his hunch about the robots was correct: did we sell any more products (i.e., did our throughput go up?); did we lay off anybody (did our operational expense go down?); and the last, exactly what he said: did our inventories go down?
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Cost Accounting is enemy number one of productivity.
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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.
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Okay, so why was the plant built in the first place? It was built to produce products. Why can’t that be the goal? Jonah said it wasn’t. But I don’t see why it isn’t the goal. We’re a manufacturing company. That means we have to manufacture something, doesn’t it? Isn’t that the whole point, to produce products? Why else are we here?
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Inventory is all the money that the system has invested in purchasing things which it intends to sell.
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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.
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I still claim that there are only few constraints. Our division is too complex to have more than a very few independent chains. Lou, don’t you realize that everything we mentioned so far is closely connected? The lack of sensible long-term strategy, the measurement issues, the lag in product design, the long lead times in production, the general attitude of passing the ball, of apathy, are all connected. We must put our finger on the core problem, on the root that causes them all. That is what actually is meant by identify the constraint. It’s not prioritizing the bad effects, it’s identifying what causes them all.
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If any organization was built for a purpose and any organization is composed of more than one person, then we must conclude that the purpose of the organization requires the synchronized efforts of more than one person.
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The key is in the hands of production. These techniques to manage the buffers should not be used just to track missing parts while there is still time, they should be used mainly to focus our local improvement efforts. We must guarantee that the improvements on the CCRs will always be sufficient to prevent them from becoming bottlenecks.
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We want to make production a dominant force in getting good sales. Sales which will fit both the client’s needs and the plant’s capabilities like a glove.
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Why not make the work easier and more interesting so that people do not have to sweat? The Toyota style is not to create results by working hard. It is a system that says there is no limit to people’s creativity. People don’t go to Toyota to ‘work’ they go there to ‘think’.
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Eli Goldratt passed away at his home in Israel on June 11th, 2011, in the company of his family and close friends.
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The entire bottleneck concept is not geared to decrease operating expense, it’s focused on increasing throughput.
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What my people and I have done is to examine daily the queues in front of the assembly and in front of the bottlenecks— we call them ‘buffers.’ We check just to be sure that everything that’s scheduled to be worked on is there—that there are no ‘holes.’ We thought that if a new bottleneck pops up it would immediately show up as a hole in at least one of these buffers.
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What are we asking for? 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. Think about it. If a manager doesn’t know how to answer those three questions, is he or she entitled to be called manager?