Average download-rate improvement; in environments with large available. Current P2P implementations, however, are oblivious to the. Goals is to demonstrate that our approach indeed locates peers. To facilitate this process, our.
Understanding THE GOAL: The best-seller by Eli Goldratt and Jeff Cox. 1. ColeManaging PartnerAvraham Y. Goldratt Institute, LPASEM Member Benefit – www.asem.org/Understanding THE GOAL:The best-seller by Eli Goldratt and Jeff CoxCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved.
HOUSEKEEPING. Presentation will last 45 minutes.
There will be time at the end for questions. Save all questions until the end. Please turn your phone on muteCopyright © 1995-2013. Goldratt Institute, LP.
All Rights Reserved. 33. Over 3 Million copies sold. Translated into more than 21languagesCopyright © 1995-2013. Goldratt Institute, LP.
All Rights Reserved. Alex Rogo Jonah“To ask, inquire” “Seeks truth”UniCoCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Alex Rogo.
Late orders. High cost.
Low efficiencies. Two rounds of layoffs. 20% cutback. Plant is losing moneyMeeting with the boss (Bill Peach)“You have 3 MONTHS!”Copyright © 1995-2013.
Goldratt Institute, LP. All Rights Reserved. Alex Rogo. Technology. Computers. Good people.
All materials needed. Have a market!“Something is wrong”Why can’t we make money?Copyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Alex Rogo JonahChance meeting at the airportRobots - Productivity Improvement - What is productivity?Not equations!
- Can only be measured in terms of your Goal!So”what is the Goal of your manufacturing organization?”Hint: “There is only one Goal, no matter what the company”Copyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Alex Rogo. Produce products as efficientlyas we can.
Buy raw materials in the mostcost-effective manner. Be a good employer. Produce quality products.
Produce quality productsefficiently. Stay on the leading edge oftechnology. Meet sales requirements. MAKE MONEY!“What is the Goal?”“What do we try to do?”UniCoCopyright © 1995-2013. Goldratt Institute, LP.
All Rights Reserved. Alex RogoActually make more money todayand in the future!Why is that important to know?. It enables us to answer the question “what isproductivity?”. An action that moves us toward making moneyis productive. An action that takes us away from makingmoney is non-productive.But how to measure? There is no shortage of measurements!. Hours worked vs.
Hours paid to work. Output per hour compared to standard. Cost of products. Direct labor variancesProblem: “they don’t tell me if I made money!”Copyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved.
Throughput(T)Investment ($I)Inventory ($I)$OperatingExpense($OE)$BudgetJonah1. Throughput (T)2. Investment (I)3. Operating Expense (OE)Measurements??SystemCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Throughput(T)Investment ($I)Inventory ($I)$OperatingExpense($OE)$BudgetJonah1.
Throughput (T)2. Investment (I)3. Operating Expense (OE)Throughput = Sales - TVCNet Profit = T - OESystemCopyright © 1995-2013. Goldratt Institute, LP.
All Rights Reserved. Alex Rogo JonahBreakfast meetingAlex: “Let’s talk about my Robots”Jonah: “Forget about the Robots - you’ve got much more fundamentalthings to concern yourself with.”Alex: “But what about my efficiencies?”Jonah: “Most of the time your struggle for high efficiencies is takingyou in the opposite direction of your Goal!”Copyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. “Two phenomena are found in every plant”1. Dependent Events2.
Statistical FluctuationsCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. A B C. C cannot accomplish more than what B provides to it. B cannot work until it receives parts from A. A cannot do its job until it receives Raw Material.1. Dependent EventsRawMaterialCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved.
Statistical FluctuationsThe output of any resource fluctuates over time.15105On average, this resource will produce 10 units per hourOn average, this resource will deliver in 10 hoursOn average, this customer will require 10 units per dayorProbability Distribution10TimeUnitsCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. A B CRawMaterialD E FCombine Dependent Events15105or1015105or1015105or1015105or1015105or1015105or10Jonah: “Alex, call me when you can tell me what thecombination of the two phenomena mean to your plant.”with Statistical FluctuationsCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Boy Scout HikeSpreading troops mean high inventory.Closely packed troops mean lower inventory.How can we prevent the troops from spreading withoutlosing speed/throughput?Raw MaterialFG Work-in-ProcessHerbieCopyright © 1995-2013.
Goldratt Institute, LP. All Rights Reserved. Put Herbie in the lead.Made sure that those behind could close any gaps.What did Alex do?But the ‘troops became frustrated because it was too slow!HerbieCopyright © 1995-2013. Goldratt Institute, LP.
All Rights Reserved. What did Alex do next?HerbieCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Lightened Herbie’s load to enable him to speed up.Made sure that those behind could close any gaps.What did Alex do next?HerbieCopyright © 1995-2013.
Goldratt Institute, LP. All Rights Reserved. “The maximum deviation of a preceding operation willbecome the starting point of a subsequent operation”.What did Alex learn about Statistical Fluctuations andDependent Events?Copyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. UniCoHow could Alex apply this learning to UniCo?Copyright © 1995-2013.
Goldratt Institute, LP. All Rights Reserved. UniCoAlex’s “system” (Big Picture)Raw MaterialsConversion(Production)FGInventoryDiscreetOrdersThe Goal: Make more money now and in the future.The Metrics: Throughput, Investment, Operating ExpenseBut how does the system achieve the Goal? (Details)Copyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Material ReleaseRawMaterialsResources / Routing / BOMFGInventoryOrdersHow Alex’s System achieves its Goal(Details)FlowCopyright © 1995-2013.
Goldratt Institute, LP. All Rights Reserved. Resources / Routing / BOM“What you have to do next, Alex, is todistinguish between two types ofresources in your plant. One type iswhat I call a bottleneck resource. Theother is, very simply, a non-bottleneckresource.”“Bottleneck: Any resource whose capacity is equal to orless than the demand placed on it.”RawMaterialsFGInventoryOrdersCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved.
Resources / Routing / BOM“Bottleneck: Any resource whose capacity is equal to orless than the demand placed on it.”NCX-10“What you have to do next, Alex, is todistinguish between two types ofresources in your plant. One type iswhat I call a bottleneck resource. Theother is, very simply, a non-bottleneckresource.”RawMaterialsFGInventoryOrdersCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. FGInventoryResources / Routing / BOM“Bottleneck: Any resource whose capacity is equal to orless than the demand placed on it.”NCX-10Heat Treat“What you have to do next, Alex, is todistinguish between two types ofresources in your plant.
One type iswhat I call a bottleneck resource. Theother is, very simply, a non-bottleneckresource.”RawMaterialsOrdersCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Resources / Routing / BOMNCX-10Yes, it is possible to have two bottlenecks, but firstmake sure they are really bottlenecks.RawMaterialsFGInventoryHeat TreatOrdersCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved.
Resources / Routing / BOMNCX-10In the case of the furnaces, they were bottlenecksbecause of the way they were operated - and Alexlearned that they did not need to heat treat someparts that they processed.RawMaterialsFGInventoryHeat TreatYes, it is possible to have two bottlenecks, but firstmake sure they are really bottlenecks.OrdersCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Resources / Routing / BOMNCX-10In the case of the furnaces, they were bottlenecksbecause of the way they were operated - and Alexlearned that they did not need to heat treat someparts that they processed.RawMaterialsFGInventoryYes, it is possible to have two bottlenecks, but firstmake sure they are really bottlenecks.OrdersCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. So he had to take another approachUnlike the Boy Scout hike, Alex’s slowestresource was not first in line!Applying the Boy Scout Hike to UniCoCopyright © 1995-2013.
Goldratt Institute, LP. All Rights Reserved. Applying the Boy Scout Hike to UniCoAlex “tied a rope” from the first operation to the constrainingoperation, limiting the “distance” (time) between them, andlimiting the work-in-process.Raw MaterialFG Work-in-ProcessHe also exploited the use of Herbie by changing certain policies.Copyright © 1995-2013.
Goldratt Institute, LP. All Rights Reserved. Resources / Routing / BOMIn the plant, the “tied Ropes” looked like this.NCX-10He also changed work rules for breaks, QA, and maintenance.They controlled entry points for material release ofroutings that led to the NCX-10. The ropeseffectively choked off release of materials to the rateand quantity required by the NCX-10 to makedemands for both inventory and discreet orders.RawMaterialsFGInventoryOrdersCopyright © 1995-2013. Goldratt Institute, LP.
All Rights Reserved. Resources / Routing / BOMNCX-10He also changed work rules for breaks, QA, and maintenance.Operating in this manner. WIP decreased. FG inventory decreased. Lead time decreased. Due date performance improved. Operating Expense Decreased.
Plant began “making money”!RawMaterialsFGInventoryOrdersCopyright © 1995-2013. Goldratt Institute, LP.
All Rights Reserved. Resources / Routing / BOMNCX-10Alex followed what is known as the Five Focusing Steps of TOCUntil the CONSTRAINT moved toAt which time Alex used his new-foundcapacity and decreased lead-time to acquiresignificantly more business!The MARKET!RawMaterialsFGInventoryOrdersCopyright © 1995-2013. Goldratt Institute, LP. All Rights Reserved. Identify the system’s constraint(s).2. Decide how to Exploit the system’s constraint(s).3. Subordinate/Synchronize everything else to theabove decision.4.
Elevate the system’s constraint(s).5. If in the previous steps a constraint has beenbroken, go back to Step 1.Do not allow inertia to become the system’s constraint!WARNINGThe Five Focusing Steps of TOCCopyright © 1995-2013. Goldratt Institute, LP.
All Rights Reserved. QUESTIONS?Hugh E. ColeAGI-Goldratt [email protected] © 1995-2013. Goldratt Institute, LP.
All Rights Reserved.
Written in a fast-paced thriller style, The Goal is the gripping novel which is transforming management thinking throughout the Western world. Alex Rogo is a harried plant manager working ever more desperately to try and improve performance. His factory is rapidly heading for disaster. So is his marriage. He has ninety days to save his plant—or it will be closed by corporat Written in a fast-paced thriller style, The Goal is the gripping novel which is transforming management thinking throughout the Western world.
Alex Rogo is a harried plant manager working ever more desperately to try and improve performance. His factory is rapidly heading for disaster. So is his marriage. He has ninety days to save his plant—or it will be closed by corporate HQ, with hundreds of job losses.
It takes a chance meeting with a colleague from student days—Jonah—to help him break out of conventional ways of thinking to see what needs to be done. The story of Alex's fight to save his plant is more than compulsive reading. It contains a serious message for all managers in industry and explains the ideas which underline the Theory of Constraints (TOC) developed by Eli Goldratt.
The primary reason for It was written at a point of time when manufacturers were taken by the competitive priorities of Cost- providing low-cost The primary reason for It was written at a point of time when manufacturers were taken by the competitive priorities of Cost- providing low-cost products, Quality - providing high-quality products, Delivery - providing products quickly, Flexibility - wide range of product/customization and Services - Delivery of product and how it is supported. This book was written before lean came into picture as a concept that can be applied and reaped by larger audience and TOC was established in mid 60's but it was not put up in easy to understand perspective and was in form of journals and papers but this book made it common sense for common man and was pushed by American Manufacturers to their employees, which helped them to define new way of cost measuring and defining the competitive priorities in context to their strategic goals. Secondly the advancement of SPC (Statically Process Control) and Lean puts greater emphasis on TOC, and till now this book has been prescribed by many academia to students for understanding of Lean, Six Sigma, Agile etc. It is hard for me to find the right tone to review this book, perhaps I'll open by saying that of all the business books I've read this remains the most approachable, and possibly also the best value for money once the case studies in the interview with the author at the end of the book are taken into account. Really it is built around a very simple insight - that the speed of a convoy is determined by the slowest ship, what the book does is demonstrate the effect of consistently applying this in It is hard for me to find the right tone to review this book, perhaps I'll open by saying that of all the business books I've read this remains the most approachable, and possibly also the best value for money once the case studies in the interview with the author at the end of the book are taken into account. Really it is built around a very simple insight - that the speed of a convoy is determined by the slowest ship, what the book does is demonstrate the effect of consistently applying this insight to the workings of a business.
This is the basis of Goldratt's theory of constraints. On the whole human life exists within the triple constraints of time, cost and quality I'm too lazy to think up any exceptions, but I've left the claim neutral in case any crop up - cost understood broadly ie there was a labour cost to building the pyramids even though that society had no money. For example if a house is built quickly at low cost the quality will be low, if you want a high quality house built quickly you have to be prepared to pay for it, or compromise on the time it will take. Goldratt has the idea of focusing on a constraint and redesigning the business around it. The Goal is a novel, a groanworthy and terrible and didactic novel, a combination which makes it a success because it doesn't take itself entirely seriously unlike the worthy, but painful, or methodological rubbish like. I cannot recommend reading this book highly enough as an opener to thinking about the flow of work through organisations, how organisations succeed or become dysfunctional. It's intended as a gentle introduction to the Theory of Constraints, but also opens the door to systems thinking.
Editions with the extra interviews with how different businesses have applied Theory of Constraints are particularly enlightening and worth getting hold of. The one message of the book that I found especially interesting was that eventually the greatest constraint on the fictional business in the novel is not its potential productivity but the capacity of the market to absorb its products. What I find interesting is that this is a message about the limits of the market in a business book. Maybe the boosters are correct and the ability of capitalism to invent products is near unlimited, maybe potential economic expansion could be extremely great however all that is irrelevant. The determining factor will be the size of the market. Or the inventiveness of advertisers to persuade us to want more junk. There is a sequel: which I don't find as successful a novel, partly because it is less groan-inducing and more worthy in tone but also because it doesn't go through the steps of the characters problem solving efforts in the same level of detail.
I suppose one reason why I am enthusiastic about The Goal is the part it plays in my thinking about the Industrial Revolution. There was nothing new in principle about the technologies of steam power, what changed was the ability of the market to consume - producing more is a high road to insolvency unless you can find the customers to buy your product. There maybe is the key, the world of The Goal, like our own, operates in a particular historical and sociological context, rather than a fantasy in which economic growth 'to infinity and beyond', in the immortal words of Buzz Lightyear, is the solid basis in which all assumptions are rooted. An example of the realism of the thinking at least from my own point of view in The Goal is that at one point the protagonist is faced with the possibility of a price war - competing with other manufacturers on the basis of price alone - but this is something that he doesn't want to do. By contrast I notice from time to time the adverts for a UK furniture store which promise the purchaser that they will have nothing to pay for a year, four years free credit, or even both.
A market strategy predicated on a loving relationship with their funders. Then again it strikes me from time to time just how fantastical real life is. On the other hand there's a more basic reason why I like it. I was never any good at Maths in school and so it was from this book that I learnt that when looking at figures if the answer looks wrong, what you need to do is think about the assumptions rather than just check the calculation. It is impressive where adding up the wrong figures in the right way will get you, individually or as a society.
Great explanation of the theory of constraints and operations management. It's a business classic- first published in 1984 - but still relevant as it gets at the fundamentals. I almost removed a star for trying to create a fictional story to tell the book in that was badly told/edited. Did we really need the side story about the protagonists marital issues?
One of the biggest takeaways from this book is that it's incredibly important to set the right goals to manage a complex operation. This soun Great explanation of the theory of constraints and operations management. It's a business classic- first published in 1984 - but still relevant as it gets at the fundamentals.
I almost removed a star for trying to create a fictional story to tell the book in that was badly told/edited. Did we really need the side story about the protagonists marital issues? One of the biggest takeaways from this book is that it's incredibly important to set the right goals to manage a complex operation. This sounds obvious and intuitive, however it's actually much harder than most people think, and easy to get wrong.
It gets down to the question of: is everyone working on the 'right things'. The things that will lead to the business making the most money. It's too easy to find a things that are easily measurable and saying 'this thing is correlated with our success, so let's focus on it'. It sounds like 'cost accounting' fit into that bucket.
So how do you set the right goals? Focus on making money! One of the drivers of making money in any business that creates a product is throughput, or how fast a product can be made.
The others are costs/operating expenses, and inventory. One of the key concepts of the book is that focusing on throughput rather than costs will yield much better results. The bottleneck theory, or the theory of constraints, was very useful to think about. My company produces software and not physical products, but each feature we develop definitely has steps it has to go through: creating the concept, research, spec, design, implementation (backend and client), testing, QA, measure results, analyze them, iterate, etc. Focusing on where the bottlenecks are with that process can help us move faster. And every startup needs to be moving fast - and not just at building - we need to be doing as fast as we can. A consequence of the bottleneck theory that is useful to keep in mind is that in any system only the bottlenecks should be 100% utilized.
Every manager will have a natural tendency to want to utilize all their resources to 100% because that just seems. Wasteful if you don't. People should be working full time right? But a system can only run at the speed of the slowest bottleneck, so non-bottlenecks will by definition have spare cycles, and it's important to keep them open for the important work and not fill it up with unimportant stuff that will bog them down when you actually need them on the important stuff. I've seen this happen many times in software. An engineer finishes a project, and the big important project coming from the design team isn't done yet, so he picks up something small in the meantime.
The next day that big important project is ready to go, but the engineer only needs 'one more day' to finish this thing he started. And then that day becomes two and then three (because we didn't count QA). And then we've lost 3 days on our most important project for another project that doesn't matter at all. Add that up across a large number of developers, and you've lost a lot of time. The theory of constraints is not limited to manufacturing, as the author shows. In the end, he is advocating it as a method or process of learning.
The best process improvement novel I've seen, this classic work explains the all-important Theory of Constraints through real life examples and a surprisingly good story. Most books of this nature are exceptionally unrealistic, but this one manages to keep the reader engaged, which is key for an instructional text like this. The book's lessons have some practicality in normal, everyday life, but its greatest utility is for those involved in process improvement in industries such as manufacturing, The best process improvement novel I've seen, this classic work explains the all-important Theory of Constraints through real life examples and a surprisingly good story. Most books of this nature are exceptionally unrealistic, but this one manages to keep the reader engaged, which is key for an instructional text like this. The book's lessons have some practicality in normal, everyday life, but its greatest utility is for those involved in process improvement in industries such as manufacturing, distribution, services, and retail.
All industrial and systems engineers need to read this book, as do all managers of processes. This is to Systems Thinking what The Five Dysfunctions is to management: A peachy piece of fiction, packed with applicable lessons in the most enjoyable format you can imagine. While other systems thinking books are somewhat dry, this one is filled with life, even romance, and well-grounded in reality. While five stars normally for me would mean 'life-changing,' in this case I can't resist because of a rare and wonderful balance between enjoyment, levity, and insight. This type of book, to me, i This is to Systems Thinking what The Five Dysfunctions is to management: A peachy piece of fiction, packed with applicable lessons in the most enjoyable format you can imagine. While other systems thinking books are somewhat dry, this one is filled with life, even romance, and well-grounded in reality.
While five stars normally for me would mean 'life-changing,' in this case I can't resist because of a rare and wonderful balance between enjoyment, levity, and insight. This type of book, to me, is way better than crime fiction or fantasy. I wish business fiction was a genre with endless options.
In The Goal, a dysfunctional manufacturing plant is transformed after the protagonist has a chance encounter with his physics professor in an airport lounge. Through an unlikely rekindling of the relationship, the professor shows him simple systems thinking principles that are gradually incorporated at the plant. These principles completely transform the site. Through continued improvement, it turns traditional accounting and productivity practices upside down and soon outperforms all other plants in its industry. If you're bought into the whole idea of learning to think in mental models, as Dalio describes in Principles or Munger in his Almanack, you'll love this book to see how it's applied in action. If not, perhaps this story will show you the usefulness of it in an entertaining, light-hearted fashion. The book will give you some hope that a hopeless situation can be turned around with a little ingenuity.
إلياهو قولدرات ، فيزيائي تحول إلى عالم إدارة الأعمال ، حصل على بكالوريوس العلوم من جامعة تل أبيب ، وعلى ماجستيرالعلوم و الدكتوراة في الفلسفة من جامعة بارإيلان ، و الجامعتان في إسرائيل. ويتضح من اعتماره الطاقية اليهودية دائما أنه متعصب ، و هو صاحب نظرية القيود التي سيأتي شرحها. طبعا لا تنخرشون ، صورته في الكتاب قبل خمسة و عشرين عاما!:^).
قصة الكتاب: بطل القصة هو Alex Rogo ، وهو مدير مصنع للإنتاج ضمن شركة ضخمة تسمى UniCo ، و يدفعك قولدرات في روايته هذه إلى التعاطف الشديد مع بطلها إل روقو ، و الذي د. إلياهو قولدرات ، فيزيائي تحول إلى عالم إدارة الأعمال ، حصل على بكالوريوس العلوم من جامعة تل أبيب ، وعلى ماجستيرالعلوم و الدكتوراة في الفلسفة من جامعة بارإيلان ، و الجامعتان في إسرائيل. ويتضح من اعتماره الطاقية اليهودية دائما أنه متعصب ، و هو صاحب نظرية القيود التي سيأتي شرحها. طبعا لا تنخرشون ، صورته في الكتاب قبل خمسة و عشرين عاما!:^). قصة الكتاب: بطل القصة هو Alex Rogo ، وهو مدير مصنع للإنتاج ضمن شركة ضخمة تسمى UniCo ، و يدفعك قولدرات في روايته هذه إلى التعاطف الشديد مع بطلها إل روقو ، و الذي يعاني من مشكلتين متزامنتين ، مصنعه المهدد بالإغلاق خلال ثلاثة أشهر ، و حياته العاطفية مع زوجته التي تزيد مشكلتها سوءا معها بسبب غيابه الطويل وانهماكه في حل مشكلة المصنع ، الأمر الذي جعله مقصراً معها ، و مع طفله و طفلته.
وأثناء إحدى سفريات روقو الكثيرة ، يلتقي بأستاذ يهودي درسه مادة الفيزياء سابقا في المطار، حيث يصر أستاذه بعد محادثة قصيرة مع روقو أن مصنعه غير فاعل و أن روقو نفسه مدير المصنع ضائع لا يعرف هدف مصنعه الأساسي ، وقد استنتج الاستاذ هذا من خلال حديثه مع روقو الذي بدا مزهوا بالروبوتات التي تملكها شركته للأنتاج ، و التي ملأت المخازن بالمنتجات! و الاستاذ اليهودي ليس إلا قولدرات نفسه ، وهو يلعب دور المرشد الذي يظهر و يختفي ، و يستمر روقو في متابعته و سؤاله ، و يحرص قولدرات هنا أو أستاذ روقو على تسريب مفاهيم نظريته الشهيرة نظرية القيود ضمن أحداث القصة ، ليدفعك للاقتناع بها تماما. وهذا هو الرائع في هذه الرواية ، حيث تدفعك بشدة إلى التفكير في مقولات الاستاذ اليهودي المقتضبة ، بدافع حب شخصية روقو الغارق في مشاكله ، و ذي الشخصية الطموحة ، عبر كثير من النقاشات بين الموظفين المختصين بالمخرزون و الإنتاج و المحاسبة في شركة روقو ، و عبر التجارب الشخصية التي يمر بها روقو كقيادته لفريق من الطلاب الكشافة اثناء إحدى الرحلات الاستكشافية في يوم إجازة بعد غياب قائد الكشافين لمرضه ، الكتاب مليء بكثير من التعبيرات الفلسفية العميقة التي حشى بها قولدرات كتابه على لسان الأستاذ اليهودي أو من انفعالات روقو أثناء نوبات التفكير. 2nd read-through: I still love this book. Primarily because of its collaborative solution finding process and its vocalness against local optima. Also from a didactic perspective I think this is something we (as people leading teams) should strive for: Enabling peers to make better decisions by themselves via good process. The references in 'The Phoenix Project' pushed me towards reading this one as well.
I really enjoyed listening to the audible 2nd read-through: I still love this book. Primarily because of its collaborative solution finding process and its vocalness against local optima. Also from a didactic perspective I think this is something we (as people leading teams) should strive for: Enabling peers to make better decisions by themselves via good process. The references in 'The Phoenix Project' pushed me towards reading this one as well. I really enjoyed listening to the audible version of this book and I would also argue that there's a lot to take from this book, even if you've already read 'The Phoenix Project'. In a world where so many people are talking about scaling Agile, this is one of the books that gave me a lot more insights in the underlying principles of lean.
The last chapters are especially great ammunition for folks that have to deal with By-The-Book advocates of certain methodologies. Separating the application of a principle (together with the assumptions) from the principle itself is a great way towards more insight and a more meaningful implementation of whatever methodology in the context of your environment/company.
Next stop is 'Beyond the Goal' P.S.: Started to listen to 'Beyond the Goal' and realized that Jonah (from the audible version) sounds exactly like Goldratt himself. I think not:-). NOTES Productivity: to accomplish something in terms of a goal “The future of our business depends upon our ability to increase productivity”.Peach What is the Goal?
Original thoughts Increase producitivity Produce products Power Market share / Sales Cost-effective purchasing Supplying jobs Quality Quality & Efficiency Technology / R&D Communications Customer satisfaction Make Money Three measurements essential to knowing whether company is making money Net Profit ROI Cash flow Make money by increasing net NOTES Productivity: to accomplish something in terms of a goal “The future of our business depends upon our ability to increase productivity”.Peach What is the Goal? Original thoughts Increase producitivity Produce products Power Market share / Sales Cost-effective purchasing Supplying jobs Quality Quality & Efficiency Technology / R&D Communications Customer satisfaction Make Money Three measurements essential to knowing whether company is making money Net Profit ROI Cash flow Make money by increasing net profit, while simultaneously increasing ROI, and simultaneously increasing cash flow But he realizes that at the plant level these measurements don’t mean much.
Only at the top level. More than one way to express the Goal - at the plant level Throughput - the rate at which the system generates money through sales (not production. If you produce something, but don’t sell it, it’s not throughput) Inventory - All the money that the system has invested in purchasing things which it intends to sell Operational expense - all the money the system spends in order to rurn inventory into throuput Questions to ask when adding a robot Did we sell any more products as a result? Did we reduce number of people on payroll? Did inventory levels go down? Goal: Increase throughput while simultaneously reducing both inventory and operating expense.
“Money” Throughput is the money coming in Inventory is the money currently inside the system Operational expense is the money we have to pay out to make throughput happen In manufacturing: An event, or a series of events, must take place before another can begin. The subsequent event depends upon the ones prior to it. The important thing occurs when dependent events are in combination with another phenomenon called statistical fluctuations Boy Scout hike The leader of the troop controls the pace of the line. If a gap forms and the line is lengthened all you can do is shorten it up to the distance of the person ahead of you - dependent events!
Dependency limits the opportunities for higher fluctuations.Whoever is moving the slowest in the troop is the one who will govern throughput Two types of resources Bottleneck resource - Any resource whose capacity is equal to or less than the demand placed upon it Non-bottleneck resource - Any resource whose capacity is greater than the demand placed on it Bottlenecks Do not balance capacity with demand, balance the flow of product through the plant with the demand from the market. To increase the capacity of the plant is to increase the capacity of only the bottlenecks Two principal themes on which you need to concentrate Make sure the bottlenecks’ time is not wasted Visual management in smooth work on manufacturing floor Using the bottlenecks to predict when the next order will be shipped There cannot be any idle time for bottleneck processes. Dedicate people full-time to those processes. Goldratt introduces the Theory of Constraints via this entertaining novel.
I think this book is excellent if you are new to Operations. And I think the approach of telling a story rather reading a traditional text book is a good format. It demonstrates why many traditional measurements and common intuition is wrong. The book revisits what the goal of a business should be and what is important to measure and control to achieve that goal.
Through examples in the main character's personal life and Goldratt introduces the Theory of Constraints via this entertaining novel. I think this book is excellent if you are new to Operations. And I think the approach of telling a story rather reading a traditional text book is a good format. It demonstrates why many traditional measurements and common intuition is wrong. The book revisits what the goal of a business should be and what is important to measure and control to achieve that goal.
Through examples in the main character's personal life and work life, Goldratt explains the weaknesses of traditional cost accounting systems and what's important to track. In short, to optimize money earned, increase throughput, decrease operating expense and decrease inventory. And an important corollary is that any change requires impact to all 3 (throughput, operating expense and inventory).
It is a fallacy that a change can impact only one of these metrics. A good follow on book to this novel is Synchronous Manufacturing: Principles for World Class Excellence by Umble and Srikanth.
(4.5) more interested in application to project development (vs repeatable manufacturing). I like the approach of 'discovering' the principles behind theory of constraints and how to optimize throughput through a repeatable manufacturing process. Seems quite practical and valuable in just that application. Trying to figure how this can apply beyond just manufacturing. The latter portion of the book ( after Alex is promoted to division head and can't optimize a single plant, but needs (4.5) more interested in application to project development (vs repeatable manufacturing). I like the approach of 'discovering' the principles behind theory of constraints and how to optimize throughput through a repeatable manufacturing process. Seems quite practical and valuable in just that application.
Trying to figure how this can apply beyond just manufacturing. The latter portion of the book ( after Alex is promoted to division head and can't optimize a single plant, but needs to figure out how to optimize as a manager ) starts to address how to apply Theory of Constraints beyond the operations of a plant to more generalized management. I kind of got lost there. Also interested in how Goldratt thought his theory could apply to relationships.
It seems as though Alex may have inadvertently used some of what he learned from Eliyahu-er, sorry, Jonah-with his wife. Goldratt was an educator, author, physicist, philosopher and business leader, but first and foremost, he was a thinker who provoked others to think. Often characterized as unconventional, stimulating, and “a slayer of sacred cows,” he urged his audience to examine and reassess their business practices with a fresh, new vision. Goldratt is best known as the father of the Theory of Con Eliyahu M. Goldratt was an educator, author, physicist, philosopher and business leader, but first and foremost, he was a thinker who provoked others to think. Often characterized as unconventional, stimulating, and “a slayer of sacred cows,” he urged his audience to examine and reassess their business practices with a fresh, new vision.
Goldratt is best known as the father of the Theory of Constraints (TOC), a process of ongoing improvement that identifies and leverages a system’s constraints in order to achieve the system’s goals. He introduced TOC’s underlying concepts in his business novel, The Goal: A Process of Ongoing Improvement, which has been recognized as one of the best-selling business books of all time.
First published in 1984, The Goal has been updated three times and sold more than 7 million copies worldwide. It has been translated into 35 languages. Heralded as a “guru to industry” by Fortune magazine and “a genius” by Business Week, Dr. Goldratt continued to advance the TOC body of knowledge throughout his life, building on the Five Focusing Steps (the process of ongoing improvement, known as POOGI) with TOC-derived tools such as Drum-Buffer-Rope, Critical Chain Project Management (CCPM) and the Thinking Processes. He authored ten other TOC-related books, including four business novels: It’s Not Luck (the sequel to The Goal), Critical Chain, Necessary but Not Sufficient and Isn’t It Obvious?
His last book, The Choice, was co-authored by his daughter Efrat Ashlang-Goldratt. Born in Israel on March 31, 1947, Dr. Goldratt earned a Bachelor of Science degree from Tel Aviv University and a Master of Science and Doctor of Philosophy from Bar-Ilan University. He is the founder of TOC for Education, a nonprofit organization dedicated to bringing TOC Thinking and TOC tools to teachers and their students, and Goldratt Consulting. In addition to his pioneering work in business management and education, Dr.
Goldratt holds patents in a number of areas ranging from medical devices to drip irrigation to temperature sensors. He died on June 11, 2011, at the age of 64.