Copyright: 1992

Publisher: North River Press, Inc.

ISBN: 0-88427-061-0

Wanting to have a better understanding of Theory of Constraints thinking, I decided to go back and read this novel that Goldratt wrote in the early 80's.  The novel is about a production plant manager who is facing a crisis in his career.  His plant is going to be shut down in 3 months if he and his team can't show better results.  While Goldratt does introduce a "personal" story to go along with the business story, this is a novel you wouldn't want to read just for the "story".  Like most business novels the story is just a wrapper around the ideas and thoughts that the author wants to convey.  So at times the dialogue and story are contrived but the principles come across very well in the end. 

What is science?

In the introduction to the revised version, Goldratt explores what it means to engage in the scientific method.  Goldratt's background as a physicist qualifies him to address this issue and he has a unique perspective.   He defines science as "not [being] about the secrets of nature or even about truths.  Science is simply the method we use to try and postulate a minimum set of assumptions that can explain, through a straighforward logical derivation, the existence of many phenomena of nature." 

What I found interesting about this was that many times when we try to incorporate the "scientific method" into our business processes, we are looking for "the one right way" to do something.  It is interesting to note that throughout his book he truly DOES use this method to describe why he thinks that certain things take place in production management. 

Gremlins in the plant

Early in the book when he is setting up the turmoil and struggle that the main character is facing, Goldratt gives us a peak into the mind of Alex Rogo, the plant manager.  He is thinking about why the plant can't seem to get rid of its backlog of orders.  He muses that "it's like little Gremlins out there" that go around messing everything up right after they get it right!

This reminded me of something Alan Shalloway said recently at a free seminar I attended.  He mentioned that software developers talk about "finding bugs" as though someone else put them there.  As though Gremlins come around messing up our code after we get it working right.  One of the main premises of the book is that if you keep doing the same things  you are doing, you will keep getting the same results.  So in order to get different results either A) the circumstances need to change or B) the process needs to change.  The big question (the one that resulted in the title of the book) is... what results do you want?  Or, stated better, what is The Goal?

If you don't know where you are going....

The Goal is the central idea around which the book revolves but it really isn't the focus of the book.  In the course of the story, the plant manager Alex runs into an old physics professor of his (remember Goldratt is a physicist by trade so he worked himself into the story!) and he commiserates with his old teacher about his troubles at the plant.  The professor asked him some very interesting questions that showed quite a bit of insight into the troubles of the plant... without ever having visted the plant. 

It is about this time that the professor asks the all important question "What is the goal of your plant?"  Far too often when we are trying to solve a problem, we forget to ask that basic question, "What is our goal?"  If you don't know where you are trying to go, there is little chance that even the best problem solving minds in the world aren't going to get you there. 

For the purpose of the book, the stated goal of the plant was to make money.  There is little discussion in the book about whether this is a valid or noble goal, thus side-stepping an issue that has become more relevant in today's business landscape.  So if you are looking for insight and thoughtful introspection on what the Goal of a business ought to be, you wil be disappointed by this book.  The importance of The Goal in this book is that you HAVE a goal and that you RECOGNIZE that goal and how your day to day actions impact that goal.

How do you know how close you are to getting there?

Anyone who has spent time working for a Fortune 500 company will read portions of the book and think "Yeah... we do / did that."  For me the memories of my time working for FedEx came back when the plant manager talked about "keeping up efficiencies" and other tracking metrics that governed the day to day workings of the plant.  Most large organizations, in an attempt to understand what is going on in the field, have developed metrics to measure performance at every level.  The problem is that too often, these metrics are designed to optimize locally rather than optimizing the whole. 

For example when I was at FedEx we were often required to "meet our numbers" which were governed by an intricate set of formulae, daily statistics, insightful conversations with the managers and a healthy dose of office politics.  As a general rule, these numbers were designed to "cut costs" at a local level rather than optimize the system to meet the needs of the customer.  This leads to some situations in which, when you take a step back, you think "why on earth are we doing that?"

For example, at one point I worked at a location that actually scheduled my start time at 5:36am.  That is not a typo... it was not 5:30am, it was not 5:35 or 5:40am ... it was 5:36am.  The reason for this was very plain to my managers... they needed the efficiencies on the morning sort to work our appropriately and the only way was if you scheduled start times to the very minute.  Believe me, I was not the only person who thought it was ridiculous to schedule somebody at 5:36 but it made perfect sense to all the managers who ran the reports. 

Truthfully, that sort of nonsense is an example of why I decided to leave FedEx and move on to other fields.  I understand that companies need to control costs and that a single extra minute per day per employee can cost a company like FedEx millions of dollars per year... but I also understand the impact that these policies had on morale and I have a hunch it cost them far more than that.  Having a metric that forces you to those kinds of policies is indicative that the metrics aren't focused on the true goal of the company. 

Statistical fluctuations and dependent events

One of the keys to understanding the problems faced by the plant was understanding the notion of statistical fluctuations. Regardless of the process you have, whether it is run by a machine or a human, there will be fluctuations in the output of that process.  By themselves, these fluctuations don't seem to be show stoppers but when combined with dependent events they can have significant impacts on operations.  When one process is dependent on the process before it, the throughput of that process is never greater than the throughput of the previous process... regardless of what its potential throughput might be. 

Said another way, if a welding robot can weld 25 widgets in an hour and the process previous to it can deliver 25 widgets per hour, then throughput is 25 widgets per hour.  But what if the process prior to welding gets bottled up for a few minutes one hour and only delivers 21 widgets.  Now, even though the robot COULD weld 25 widgets in the hour, it will only be able to deliver 21 widgets.

Understanding this concept you can see that the weakest link in the plant is the one that determines your throughput... not your strongest link.  This is true in any organizations.  This means that in order to maximize throughput the best strategy is to reduce fluctuations and keep your bottlenecks producing at maximum efficiency. 

Conclusion

This book is a fairly light read... you won't burn out any brain cells reading this book.  At the same time however the insight is phenomenal when you consider that Goldratt is a physicist and not a business person.  Anyone familiar with Lean concepts will recognize some of the underlying themes that run throughout this book.  Avoiding local optimizations in favor of optimizing the system, valuing flow efficiency over individual efficiency and smoothing fluctuations are a few concepts that came to mind as I read through this book.  I am looking forward to reading more of Goldratt's work in the near future!