Eliyahu M. Goldratt Quotes
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For most work centers every such switch necessitates spending time to do the required setup. Since the containers, by design, called for a relatively small number of parts the production batches that they dictated were, many times, ridiculously smaller relative to the setup required. Initially for many work centers the time required for setups was more than the time required for production, resulting in a significant drop in throughput. It is no wonder that Ohno faced enormous resistance—so much so that Ohno wrote that his system was referred to as the ‘abominable Ohno system’ from the late 1940’s to the early 1960’s.8 Ohno (and his superiors) certainly had an extraordinary determination and vision to continue to push for the implementation of a system, that for any person who looked at it from a local perspective, as most shop personnel must have, simply didn’t make sense.
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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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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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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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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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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’re dealing with the fact that we haven’t got any idea of what we’re doing. If we’re just looking for some arbitrary order, and we can choose among so many possibilities, then what’s the point in putting so much effort in collecting so much data? What do we gain from it, except the ability to impress people with some thick reports or to throw the company into another reorganization in order to hide from the fact that we don’t really understand what we’re doing? This avenue of first collecting data, getting familiar with the facts, seems to lead us nowhere. It’s nothing more than an exercise in futility. Come on, we need another way to attack the issue.
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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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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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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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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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Cost Accounting is enemy number one of productivity.
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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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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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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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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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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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The important thing is you’ve just proven that any organization should be viewed as a chain. I can take it from here. 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. “Or links,” I correct. “Remember, an organization may be comprised of several independent chains.”
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So this is the goal: To make money by increasing net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow.
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Ford’s starting point was that the key for effective production is to concentrate on improving the overall flow of products through the operations. His efforts to improve flow were so successful that, by 1926, the lead time from mining the iron ore to having a completed car composed of more than 5,000 parts, on the train ready for delivery, was 81 hours!3 Eighty years later, no car manufacturer in the world has been able to achieve, or even come close, to such a short lead time.
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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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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.