Quotes from Eliyahu M. Goldratt

any doubt what goes on. I'm puzzling over how to do this when

The goal of a manufacturing organization is to make money," I say to him. "And everything else we do is a means to achieve the goal." But Jonah doesn't laugh at me. "Very good, Alex. Very good," he says quietly.

Throughput," he says, "is the rate at which the system generates money through sales.

Yes, there is. We've just been talking

If you produce something, but don't sell it, it's not throughput

Pero la realidad sigue siendo que estamos condicionados a acumular stock. Todas y cada una de nuestras tiendas están hasta la coronilla de existencias. Si nos dan más espacio, les aseguro que también lo llenamos.

Inventory is all the money that the system has invested in purchasing things which it intends to sell.

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?

First, make sure the bottlenecks' time is not wasted," he says. "How is the time of a bottleneck wasted? One way is for it to be sitting idle during a lunch break. Another is for it to be processing parts which are already defective—or which will become defective through a careless worker or poor process control. A third way to waste a bottleneck's time is to make it work on parts you don't need.

Just remember we are always talking about the organization as a whole—not about the manufacturing department, or about one plant, or about one department within the plant. We are not concerned with local optimums.

You're right," I say. And then, "It's a little odd to call the market or the system of material release a bottleneck. Why don't we change the word, to . . ." "Constraint?" Stacey suggests. We correct it on the board. Then we just sit there admiring our work.

But when the nature of the constraint has changed, one would expect to see a major change in the way we operate all non-constraints.

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?

So the way to express the goal is this? Increase throughput while simultaneously reducing both inventory and operating expense.

If we cut our batch sizes in half, then I guess that at any one time we'd have half the work-in-process on the floor. I guess that means we'd only need half the investment in work-in-process to keep the plant working. If we could work it out with our vendors, we could conceivably cut all our inventories in half, and by cutting our inventories in half, we reduce the amount of cash tied up at any one time, which eases the pressure on cash flow.

Once the somebody is already on the payroll, it doesn't cost us any more to have him be idle. Whether somebody produces parts or waits a few minutes doesn't increase our operating expense. But excess inventory . . . now that ties up a lot of money.

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.

a measurement not clearly defined is worse than useless.

IDENTIFY the system's constraint(s). 2. Decide how to EXPLOIT the system's constraint(s). 3. SUBORDINATE everything else to the above decision. 4. ELEVATE the system's constraint(s). 5. WARNING!!!! If in the previous steps a constraint has been broken, go back to step 1, but do not allow INERTIA to cause a system's constraint.

I say, "So the bottom line is this: to give the robots more to do, we released more materials." "Which, in turn, increased inventories," says Stacey. "Which has increased our costs," I add. "But the cost of those parts went down," says Lou. "Did it?" I ask. "What about the added carrying cost of inventory? That's operational expense. And if that went up, how could the cost of parts go down?

A major constraint here in your system is this machine," says Jonah. "When you make a non-bottleneck do more work than this machine, you are not increasing productivity. On the contrary, you are doing exactly the opposite. You are creating excess inventory, which is against the goal.

Whenever the constraint is broken it changes conditions to the extent that it is very dangerous to extrapolate from the past." "As a matter of fact," Stacey adds, "even the things that we put in place in order to elevate the constraint must be reexamined.

Throughput es el dinero que entra. Inventario es el dinero que está actualmente dentro del sistema. Y gasto operativo es el dinero que tenemos que pagar para que suceda el throughput. Un indicador para el dinero que entra, uno para el que está atrapado dentro y otro para el que sale.

By running non-bottlenecks for "efficiency," we've built inventories far in excess of demand.