Eliyahu M. Goldratt Quotes
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I write down the three measurements which Lou and I agreed are central to knowing if the company is making money: net profit, ROI and cash flow.
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What you’re saying is that making an employee work and profiting from that work are two different things.
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You know what, it really highlights another problem. Changing the measurements’ scale of importance, moving from one world into another, is without a doubt a culture change. Let’s face it, that is exactly what we had to go through, a culture change. But how are we going to take the division through such a change?
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So the way to express the goal is this? Increase throughput while simultaneously reducing both inventory and operating expense.
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Whenever we think we have final answers progress, science, and better understanding ceases.
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I reach for my briefcase, take out a yellow legal pad and take a pen from my coat pocket. Then I make a list of all the items people think of as being goals: cost-effective purchasing, employing good people, high technology, producing products, producing quality products, selling quality products, capturing market share. I even add some others like communications and customer satisfaction. All of those are essential to running the business successfully. What do they all do? They enable the company to make money. But they are not the goals themselves; they’re just the means of achieving the goal.
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What is the real goal? Nobody here has even asked anything that basic.
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Can I assume that making people work and making money are the same thing?
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Science is simply the method we use to try and postulate a minimum set of assumptions that can explain, through a straightforward logical derivation, the existence of many phenomena of nature.
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You see, whenever there’s a hole in a buffer—and I’m not talking about just the work that’s supposed to be done on a given day, but the work for two or three days down the road—we go and check in which work center the materials are stuck.
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More importantly, our software worked. I don't just mean that it didn't bump, or that it performed according to the written specifications, or that it was efficient in producing reports. It really worked.
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Every organization was built for a purpose. We haven’t built any organization just for the sake of its mere existence.
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Open-minded people will not necessarily agree with me, not when my arguments don't make sense to them. But open-minded people do listen, and if I explain and when it is important, they are willing to invest in reevaluating their cause-and-effect connections.
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The minute you supply a person with the answers, by that very action you block them, once and for all, from the opportunity of inventing those same answers for themselves. If you want to go on an ego trip, to show how smart you are, give the answers. But if what you want is action to be taken, then you must refrain from giving the answers.
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A balanced plant is essentially what every manufacturing manager in the whole western world has struggled to achieve. It’s a plant where the capacity of each and every resource is balanced exactly with demand from the market.
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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.
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Everyone is silent.
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Tell me how you measure me and I’ll tell you how I will behave.
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But as you said, the complexity of our organizations almost guarantees that there are not many of them.