Eliyahu M. Goldratt > Quotes

“STEP 1. Identify the system’s bottlenecks. (After all it wasn’t too difficult to identify the oven and the NCX10 as the bottlenecks of the plant.)
STEP 2. Decide how to exploit the bottlenecks. (That was fun. Realizing that those machines should not take a lunch break, etc.)
STEP 3. Subordinate everything else to the above decision. (Making sure that everything marches to the tune of the constraints. The red and green tags.)
STEP 4. Elevate the system’s bottlenecks. (Bringing back the old Zmegma, switching back to old, less “effective” routings. . . .)
STEP 5. If, in a previous step, a bottleneck has been broken go back to step 1.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“What you have learned is that the capacity of the plant is equal to the capacity of its bottlenecks,” says Jonah.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“So this is the goal: To make money by increasing net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“I smile and start to count on my fingers: One, people are good. Two, every conflict can be removed. Three, every situation, no matter how complex it initially looks, is exceedingly simple. Four, every situation can be substantially improved; even the sky is not the limit. Five, every person can reach a full life. Six, there is always a win-win solution. Shall I continue to count?”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“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.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“Tell me how you measure me and I’ll tell you how I will behave.”
― Eliyahu M. Goldratt, Critical Chain

“utilizing” a resource means making use of the resource in a way that moves the system toward the goal. “Activating” a resource is like pressing the ON switch of a machine; it runs whether or not there is any benefit to be derived from the work it’s doing.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“The entire bottleneck concept is not geared to decrease operating expense, it’s focused on increasing throughput.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“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.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“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.”
― Eliyahu M. Goldratt, Theory of Constraints

“What I’m telling you is, productivity is meaningless unless you know what your goal is,” he says.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“Putting it precisely, activating a resource and utilizing a resource are not synonymous.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“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”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“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.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“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.”
― Eliyahu M. Goldratt

“What is the real goal? Nobody here has even asked anything that basic.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“They’re measurements which express the goal of making money perfectly well, but which also permit you to develop operational rules for running your plant,” he says. “There are three of them. Their names are throughput, inventory and operational expense.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“Alex, the goal is not to reduce operational expense by itself. The goal is not to improve one measurement in isolation. The goal is to reduce operational expense and reduce inventory while simultaneously increasing throughput,” says Jonah.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“I’m talking about a production employee who is idle because there is no product to be worked on.” “Yes, that’s always bad,” I say. “Why?” I chuckle. “Isn’t it obvious? Because it’s a waste of money! What are we supposed to do, pay people to do nothing? We can’t afford to have idle time. Our costs are too high to tolerate it. It’s inefficiency, it’s low productivity—no matter how you measure it.” He leans forward as if he’s going to whisper a big secret to me. “Let me tell you something,” he says. “A plant in which everyone is working all the time is very inefficient.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“Four: Too many wasteful ‘synchronization' meetings interrupted the actual work.”
― Eliyahu M. Goldratt, Critical Chain: A Business Novel

“In summary, both Ford and Ohno followed four concepts (from now on we’ll refer to them as the concepts of flow): Improving flow (or equivalently lead time) is a primary objective of operations. This primary objective should be translated into a practical mechanism that guides the operation when not to produce (preventsoverproduction). Ford used space; Ohno used inventory. Local efficiencies must be abolished. A focusing process to balance flow must be in place. Ford used direct observation. Ohno used the gradual reduction of the number of containers and then gradual reduction of parts per container. The”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“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.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“In order to significantly increase sales we have to increase the perception of value of the market for our products.”
― Eliyahu M. Goldratt, It's Not Luck

“While they go get the others, I figure out the details. The system I’ve set up is intended to "process’’ matches. It does this by moving a quantity of match sticks out of their box, and through each of the bowls in succession. The dice determine how many matches can be moved from one bowl to the next. The dice represent the capacity of each resource, each bowl; the set of bowls are my dependent events, my stages of production. Each has exactly the same capacity as the others, but its actual yield will fluctuate somewhat.”
― Eliyahu M. Goldratt

“When a proto-type—a new initiative—doesn't work, we face two alternatives: one is to bitch about reality and the other is to harvest the gift it just gave us, the knowledge of what has to be corrected.”
― Eliyahu M. Goldratt, The Choice

“Bob comes into the office with a smear of grease on his white shirt over the bulge of his beer gut, and he’s talking nonstop about what’s going on with the breakdown of the automatic testing machines. “Bob,” I tell him, “forget about that for now.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“Eli Goldratt passed away at his home in Israel on June 11th, 2011, in the company of his family and close friends.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“With the bottlenecks more productive now, our throughput has gone up and our backlog is declining. But making the bottlenecks more productive has put more demand on the other work centers. If the demand on another work center has gone above one hundred percent, then we’ve created a new bottleneck.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“Deciding that the company is wasting too much money on duplicated efforts and thus moving to a more centralized mode. Ten years later, we want to encourage entrepreneurship and we move back to decentralization.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement

“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.”
― Eliyahu M. Goldratt, The Goal: A Process of Ongoing Improvement