MBA in één dag®                                                                        Interview                          ...
CV Eli Goldratt                          •      Eliyahu M. Goldratt werd geboren in 1948 in Israël.                       ...
Dr. Eli Goldratt –                                                                                                        ...
books and our own consulting is huge. One         Since they control the entire system, they are                          ...
Interview                          Gilmore: It seems to me that originally             or three. We haven’t done a thing. ...
Dr. Eli Goldratt –                                                                                                        ...
It doesn’t matter to me that in                                 Goldratt: Let me give you the truth. In order       the in...
whether the manufacturing economics              override smart business decisions. Think         software. You’ll get kil...
Interview    Does the VP of Supply Chain have                                       Goldratt: They are open right now. Fin...
An interview with Eli Goldratt                                                                                            ...
Interview                          door at the same time. Eventually they will       How do you respond to those who      ...
as a whole. They see fragments. Because of this, you                                                     get localized opt...
MBA in één dag®                                             Eli Goldratt                                             Op MB...
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Mba Miniboekje Eli Goldratt Hr

  1. 1. MBA in één dag® Interview Eli Goldratt In dit miniboekje vindt u meer informatie over Eli Goldratt. 1 Kijk voor meer tips, foto’s en videomateriaal op www.mbain1dag.nl MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 1 04-05-10 09:28
  2. 2. CV Eli Goldratt • Eliyahu M. Goldratt werd geboren in 1948 in Israël. • Hij studeerde natuurkunde en filosofie aan de universiteiten van Tel Aviv en Bar-Ilan. • Daarna werkte hij een paar jaar in de VS, waar hij ondermeer een bedrijf leidde dat software ontwikkelde voor productieplanning. • Sinds Eli Goldratt in 1984 het boek Het Doel schreef, is hij internationaal vermaard als bedrijfsadviseur en managementgoeroe. In Het Doel introduceerde hij zijn Theory of Constraints die hij in de jaren daarna in verschillende boeken uitwerkte naar allerlei vakgebieden, onder andere ICT, Eli Goldratt MBA in projectmanagement en marketing. • Goldratt verkocht inmiddels meer dan vijf miljoen boeken in meer dan 20 talen. • • Een van Goldratts hobby’s is het provoceren van managers. Hij schept er een groot genoegen in om de bestaande ideeën over bedrijfskunde en management op de hak te nemen. Inmiddels is Goldratt al enkele jaren met pensioen. Hij verlaat zijn één dag® woonplaats, een dorpje onder de rook van Tel Aviv, nu alleen nog voor de dingen die hij écht leuk vindt. In Goldratts geval betekent dat het verzorgen van ruim twintig seminars per jaar. 2 3 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 2-3 04-05-10 09:28
  3. 3. Dr. Eli Goldratt – Interview Unplugged This is part one of SCDigest editor Dan Gilmore’s interview with Gilmore: What are the key concepts Gilmore: Yes, or they lack enough behind the Theory of Constraints? information to know. Dr. Eli Goldratt, father of the Theory of Constraints, and author of “The Goldratt: There are two pillars to the Theory of Goldratt: No – they believe the change is Constraints. One is the starting assumption likely to hurt them. Goal” and several other influential books on business and supply chain of all the hard sciences, which is that in all real-life systems there is inherent simplicity. Sometimes they are wrong because of a lack topics. “The Goal,” first published in 1984, is a novel that tells the tale of If you can just find that inherent simplicity, of information, but usually they are right! you can manage, control and improve the Most changes might be right for the company, plant manager Alex Rogo, who factory is a disaster and on the verge of system. but are not right for the majority of people from whom they are asking for collaboration. being shut. With the help of a Goldratt-like consultant named Jonah, he The other pillar is “that people are not stupid.” So no wonder there is a lot of resistance. turns things around by focusing on eliminating a series of bottlenecks Gilmore: (after a pause): I was waiting for Gilmore: There is a certain logic there, no some further explanation of that second question. (constraints) that are barriers to efficiency and service. point (laughter). Goldratt: Because of that, it means the Goldratt: Have you ever heard the concept emphasis of change must be on win-win- “people resist change?” And that the bigger win for all of the parties which you need the change, the more the resistance? Doesn’t to collaborate. this in essence say that people are stupid? Gilmore: Well, that sounds great in Let’s do a “for instance.” If someone comes theory, but for example if you have to do a up and suggests a change that is good for restructuring… you, do you automatically resist it? Goldratt: What you are saying is that you don’t So, if I say you will resist the change just think it’s feasible, and what I have tried to because it is change, I am actually saying demonstrate in my books and hundreds of you are not very bright. People certainly projects is that it is always possible – always. do, however, resist change that they have a reason to believe will hurt them. Let’s take your restructuring example, where a lot of people will get hurt. This means the 4 5 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 4-5 04-05-10 09:28
  4. 4. books and our own consulting is huge. One Since they control the entire system, they are Interview solution is wrong! There must be a better way that will get you what you want, but will time a top executive from a U.S. company the constraints of the system, and therefore be a win-win. wrote to me and said, “Dr. Goldratt, your also the levers. If you can figure out what book is no longer a novel any more, it is a they key constraints of the system are, and Gilmore: That would be great, if it is true. documentary! Because I’ve done what you what are the cause and effect relationships Goldratt: Have you read any of my books? propose in the books, and I’ve achieved all between these constraints and the rest of the results. The only difference between the system, now you have the key! Gilmore: Just “The Goal” what’s in “The Goal” and our story is that my wife didn’t come back yet!” [The main However, what you have to be able to do in Goldratt: Did what was said in that book character in the novel, Alex Rogo, also has order to successfully change the system is seem true, even simple? Common sense? some marital issues.] to look to the other pillar and recognize that only a win-win solution can be implemented. Gilmore: Yes… Everyone who attempts it achieves the results. And in terms of all the options that exist, Every one. It’s amazing. there is always at least one win-win solution. Goldratt: Do you want a bigger proof that it is The key is described in my second book, possible? Let’s say there is a manufacturing Gilmore: “The Goal” is really plant/ which in most places is called “The Goal II.” plant, where everything is against it. It’s on manufacturing focused, and many people Now, Alex isn’t a plant manager but a vice the verge of collapse, it looks impossible to associate the Theory of Constraints as president, involved not just in production do anything in the time of three months, dealing largely with production issues. but supply chain, marketing, sales, etc. Still, which is all the time there is to fix it. How do we tie this all together, both the the same concepts are demonstrated. How factory and the larger company issues and do you find the controlling factors, and Nevertheless, it is so possible, providing opportunities? create winwin? How do you unearth the false you find the simplicity, and be careful to assumptions that lead you to believe that look for win-win solutions. Goldratt: Bottlenecks are just a prime example the only way out is a compromise, which of inherent simplicity. If you are looking at a means someone will lose? The problem is that the win-win solution is system, what makes it complex is that if you usually blocked by erroneous assumptions, are touching one place, it has a ramification Then, usually there is so much resistance and that’s why it’s hard to find it. But when in other places. that even if you can implement what you you find it, it’s obvious, because your own intended, it will be so diluted that most of reaction and that of everyone else is “Isn’t In other words, it is the cause and effect the results will be lost. that obvious. Why didn’t we see it before?” relationships that make it seem so complicated. This means that if you realize that the fewer Gilmore: The results of many company Gilmore: I’d still like a more concrete the number of points you have to touch to initiatives and strategies illustrate that example… impact the whole system, it actually has point. fewer degrees of freedom. Goldratt: “The Goal” is an example, my Goldratt: Illustrate it beautifully. other books are examples, because each The more complex the system is, the less the one of them are based on things that really degrees of freedom, which means that if you happened. can find the few elements that if you touch them then they impact the whole system, The real-life validation we have had from the you’ve found the key elements of the system. 6 7 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 6-7 04-05-10 09:28
  5. 5. Interview Gilmore: It seems to me that originally or three. We haven’t done a thing. of effort to reduce the development time. this. As a result, you see top companies the Theory of Constraints had a theme But it hasn’t worked very well. So they think with great technology losing their pants! that for any system at a given point in But there is another definition of complexity, there is only one way out - if we can’t shrink All because the supply chain time exceeds time, there was a single constraint. Is that which is the degrees of freedom of the the development time, than you have to the market cycle time. notion evolving? system. If the system has even five degrees have more than one wave of development of freedom, that is very complex to manage. on-going. But that’s very difficult to do. First, So everyone is also trying to shrink the time Goldratt: It depends on how you define a If we have only one degree of freedom, that it’s very expensive. Then companies have to of the supply chain. But the joke is they are system. For me, in most companies a system is so easy. learn how to build cement walls between the always trying to do it in production, when is a one-directional flow, and therefore in most teams, because if they talk with each other, they don’t realize that 80% of supply chain companies you have only one constraint. In The problem is that people look at simplifying nothing will ever be finished. But there are time for many is in the wholesalers and the conglomerates, there can be more than one the system not by reducing its degrees of a few companies that have managed it. retailers. And they aren’t doing a thing about constraint but this is because there is more freedom, but by the first definition, which that. In PCs of course, Dell is an exception. than one system. is a total waste of time. Many haven’t. The best example is probably Digital Computer. It was ultimately killed by So, we aren’t looking at what the constraint But the fact that in a system there is one this problem. But still today, most companies of the system really is, which in this case may constraint that makes it simple. Gilmore: Let’s get back to a supply chain in this situation have more than one team be how inventory flows thru the channel. We example. developing the same types of products, have to look at how we exploit and subordinate Gilmore: I talk with lots of supply chain because that is the only way to effectively shrink that. Instead, we get all this mumbo jumbo executives, and right now for many Goldratt: In the past decade, all we hear the lead time of new product introduction. about “simplicity” here, “simplicity” there. of them there is a strong focus on about is supply chain, supply chain, supply simplifying their supply chains… chain. Before that, there wasn’t a peep Gilmore: There are supply chain factors Gilmore: OK, we started out with one about it. So let’s analyze this for a second. as well. of the two pillars being “people are not Goldratt: Good grief! OK, there are two Consider that product lifecycles are shrinking stupid.” But this makes it sounds like different definitions of complexity. The rapidly in almost every area, but especially Goldratt: Yes, in the electronics and other maybe we don’t have especially bright mere fact that both exist serve to confuse electronics. As product lifecycles shrink, we markets, as the product lifecycles keep people out there, when we know there everything. hit the first huge barrier, because the lifecycle shrinking, they are often now also equal are. of products in the market is shorter than the or shorter than the supply chain lead time. One definition is that the more data elements time to develop the product. Goldratt: We all act according to patterns needed to define the system, the more complex If you make electronics and need a custom and inertia. And it’s very hard to get out it is. So, if you can describe the system in five Gilmore: This is true often in the apparel chip built, it will take 6, 7 or 8 months from from under that, because it seems we have pages, that’s a simple system. If you have industry as well, and I suspect an the time you order to the time the first unit to recalculate everything. When you show to take a hundred pages, that’s complex. In increasing number of others. goes out the door with that chip in it. Longer them how it can be done, the reaction is this regard every company and process is than the product lifecycle. Now I order this usually “That’s not realistic,” or “But we’re amazingly complex. Even in a small company, Goldratt: Correct! Suppose I have an excellent component, and before I can even ship the different.” how many pages would it take to describe company and a winning product. If your product, there is a newer, better version of how to make every part, how to work with development time is longer than the lifetime the component. So what do I have to do? I But I’ll tell you, most companies if they follow suppliers, manage channels, etc.? of the product, it means there will always be have to reduce the price or I can’t sell it at all. these principles in four years can have net a window of time when the competition has profits equal to their current sales. So, if it is enormously complex and we try a better product than you. So, you will lose. So now if I am in the channel I will eventually to simplify it, there’s not much point. It demand higher margins, or maybe even Bron: SupplyChainDigest 2006 would be a million complexities minus two As a result companies spend an awful lot consignment inventory to protect against 8 9 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 8-9 04-05-10 09:28
  6. 6. Dr. Eli Goldratt – So, we have things that are good in the If Jonah would have told Interview normal course of things, patterns and inertia, in the case of paradigm shift, is killing us. Alex in “The Goal” what the performance of the factory really Unplugged part 2 Gilmore: It seems to me that the Theory of Constraints has some strong parallels should be a year or so down the to concepts like Lean and Six Sigma. road, Alex would have fainted. Right or wrong? Goldratt: Let’s put it this way. In almost every step down the path, almost by the nose. I implementation of the Theory of Constraints, am actually sick of that approach. This is part 2 of SCDigest editor Dan Gilmore’s interview with Dr. Eli we also force in the concepts of Lean and Six Sigma. The techniques themselves are That book focused at the plant level. My Goldratt, father of the Theory of Constraints, and author of “The Goal” beautiful. What is lacking is the mechanism assumption was that if I showed top to use them. In other words, Lean and Six management the whole thing up front, and several other influential books on business and supply chain topics. Sigma will never force you to examine the they’d say “It’s unrealistic,” We’re different,” policies of top management. all the usual things, and they will not move. “The Goal,” first published in 1984, is a novel that tells the tale of plant And that’s why they have a limited effect. Even at a more local level, it can be hard. If manager Alex Rogo, whose factory is a disaster and on the verge of Once you have used Theory of Constraints at Jonah would have told Alex in “The Goal” a higher level to really understand what you what the performance of the factory really being shut. With the help of a Goldratt-like consultant named Jonah, he need to do, at a lower level these techniques should be a year or so down the road, Alex are fantastic. But you need to know where would have fainted. turns things around by focusing on eliminating a series of bottlenecks to use them and where not. And this is the problem. You go into a (constraints) that are barriers to efficiency and service. For example, the U.S. Navy has an RFP company, you use Theory of Constraints to last year for all its logistics operations, a make progress, move someone one step huge undertaking. In the RFP, they said the then another, they get fat and happy again, umbrella for the operator must be Theory and then they just want to stop. But you’ve Gilmore: You’ve said “inertia” is a big How do you know what assumptions you of Constraints, and underneath that Lean. just started! problem in many companies. What do have to re-examine when you are facing an That’s exactly what I am saying. you mean? intolerable compromise? So – this is the marketing part – I’ve started Gilmore: When you are working with with a new thing called “Viable Vision,” where Goldratt: Inertia is related to the patterns of But most companies just accept the companies, what is typically the “Aha” I am showing company execs the whole thing how a company does business or executes a compromise, rather than realizing they just moment, when the light bulb finally goes for the first four years. And again, I tell most function like supply chain. But when there is got the gift that can point to us the wrong off ? of them that in four years they can have a paradigm shift, or the need for significant assumptions and the wrong patterns. Instead net profit equal to their current total sales. change, these patterns are what kill you. of working to find the correct pattern that will Goldratt: If you really want an answer to remove the conflict, and by that generating that, I am going to have to market myself. Of course, the first reaction is “This is totally So you have to go back and re-examine the a win-win solution, we still compromise. Let’s look at “The Goal.’ In that book, the unrealistic,” but then we say back, “Give us basic assumptions. The tough question is: That’s a huge mistake. consultant, Jonah, leads Alex Rogo step by the data, and we’ll show you how to do it.” 10 11 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 10-11 04-05-10 09:28
  7. 7. It doesn’t matter to me that in Goldratt: Let me give you the truth. In order the inventory, with almost no unavailability. Interview to minimize risk and best enable my people to Do you understand once you are doing that general they order from you once execute this, I have eight generic solutions. If you are taking the market? a week. What I want to know is it fits one of these eight, we take the project. If it doesn’t, we don’t. A retailer or wholesaler’s key metric is inventory for each specific product how turns, and its main concern unavailability. frequently they order. And if the Those eight templates cover 80% of the If you solve both these problems, that’s it, physical products companies, including the customer is yours. answer is they order once in two manufacturers, retailers, wholesalers, etc. weeks or more than two weeks, Gilmore: Ok, I think the basic issue is well that’s it - I have the solution. Gilmore: Can you describe a common understood. We’ve been trying to solve template? that with many things, from collaborative planning to RFID and lots of other Goldratt: Well, to do this in half a page technologies and strategies. or whatever this will be will probably be We show them how to do it, and then we mumbojumbo, but fine. Goldratt: These are all hard. This solution take on the implementation plan. is so damn simple. Suppose that we are producing manufactured Gilmore: Net profit in four years equal to products that are sold through distribution, Do you know that I have put in the public current sales? wholesale and retail, ok? domain computer courses? Because I found that in a manager wants to get buy-in from Goldratt: That’s right. Not every company. Then the question the question I am really his people, a computer course is far more Right now, I know how to do it with about interested in is “How frequently those channels effective than a book. Exactly what I have 80% of them. are ordering from you the same SKU?” It told you about how to do that solution is doesn’t matter to me that in general they in one of the computer courses. Gilmore: What’s the barrier at the other order from you once a week. What I want 20%? to know is for each specific product how Gilmore: Procter & Gamble is among the So save two cents there so frequently they order. And if the answer is companies trying to solve this, and is you can pay 20 cents over Goldratt: I’m stupid – I don’t know enough they order once in two weeks or more than doing so in part by trying to make their here. Very smart. Let small yet. I am restricting myself now, for example, two weeks, that’s it - I have the solution. factories more flexible to shorten the to physical products. Not hospitals, banks, length of production runs and enable warehouse concerns override etc., even though we know in general Theory Because what happens is that if say they are more SKUs to be made each day…. smart business decisions. of Constraints works beautifully there, but ordering the same product once a month, we have less data and don’t want to take on that means the total order lead time – from Goldratt: First, so you know, the Procter Think about what you’ve just too big a risk because all of our contracts are when the sell a unit to when they order a unit & Gamble soap and detergents division said. Rather than pick a carton based almost totally on realizing the results. – is one month. This is enough to kill them. implemented my distribution solution in 1989! But it as just that division, as far as I know. or two instead of a full pallet Gilmore: When you look at the issues and It will typically create big problems with excess and have a few more pennies plans across companies after you do this inventory, along with frequent problems with Gilmore: Procter & Gamble is of course of warehouse cost, I need to analysis, what are common themes or unavailability. So now, the standard solution better than most, but they are committed opportunities? shows them how to do this with less than half to this further improvement, though invest in flexible plants? 12 13 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 12-13 04-05-10 09:28
  8. 8. whether the manufacturing economics override smart business decisions. Think software. You’ll get killed trying to do it on Interview will allow them to make tubes of Crest or about what you’ve just said. Rather than pick spreadsheets. You also need software for whatever in much shorter runs, as even a carton or two instead of a full pallet and big project management activities. they have said, remains to be seen. have a few more pennies of warehouse cost, I need to invest in flexible plants? Gilmore: Let’s talk about manufacturing Goldratt: But at the same time I think you’d in Europe and North America. There find the P&G or at least most consumer Gilmore: Well, part of the issue of course is a lot of general concern and political goods manufacturers give big discounts is that most companies in the end are heat around “saving” manufacturing in to retailers and wholesalers for ordering still siloed, and the distribution director the west, amidst low costs and pressure in large quantities. That’s part of what kills is in fact primarily concerned with DC from China and other low cost countries. them all. If they would refrain from that, operational efficiency, and transportation Can adoption of Theory of Constraints then they probably wouldn’t need to make managers their metrics, etc. principles help revitalize those their plants more flexible. manufacturing companies? Goldratt: No you understand why in the Let’s consider an example. You are a shop. Theory of Constraints that the number one Goldratt: I think that question doesn’t consider And let’s say I say to you, you have to buy thing we attack all the time is called “Local what is really going on. What is this “save minimum of 100. And you are selling two Optima.” Someone tries to optimize a piece western manufacturing?” Let me talk about per day, on average. So immediately I have of the system, and you kill the system. That’s China and India – these are the two you are elongated your cycle by 50 days. Because why again we now focus up front on viewing afraid or, right? now you will wait to order until you have run the whole picture. Goldratt Interview Part down the first 100 and then order another 2 Ó 2006. All Rights Reserved. 5 I work a lot in China. You know the biggest 100. I have put into the replenishment problem in China is right now? Getting time 50 days. Gilmore: People and companies have people – for the 2nd shift. Can you imagine taken the Theory of Constraints and not enough people in China? Salaries are Gilmore: The response, I would think, taken it in all kinds of different directions. now skyrocketing. Statistics say that in 2004 is that there are trade-offs between Are they doing this well, or is it being salaries rose by 24%. When they are finalized inventory and transportation, and my misapplied? in 2005, it will be much higher. costs of shipping the two I sold that day are way too high. Goldratt: I would say most of them are valid. Have you been in Shanghai, for example? You may have had images like I had of rickshaws Goldratt: Since when are we allowed to put Gilmore: Some software vendors have and bicycles – No! This is a western town. only one type of product in a truck? So, where adopted at least in part a Theory of With the best cars everywhere, and fewer is this argument coming from? Constraints orientation, especially in bicycles than in Holland. I sent an assistant “optimization” products. What is the role to go and look in some shops for bargains. Gilmore: Let’s take it back further then. It of software in TOC? She said, “Sorry Eli, the prices are the same costs a lot more per unit to pick and ship as in Amsterdam.” say two items than a pallet of them. Goldratt: It depends. There are in fact cases where I don’t know how to solve a company’s So, China is not only becoming a big producer, Goldratt: Your right – so save two cents issues without the software. For example, but a huge consumer. If what we see now there so you can pay 20 cents over here. if you are dealing with large distribution continues another 5-6 years, China will be by Very smart. Let small warehouse concerns networks of course you have to have the then the largest consumer market in the world. 14 15 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 14-15 04-05-10 09:28
  9. 9. Interview Does the VP of Supply Chain have Goldratt: They are open right now. Fine, it and say “Let’s do this right.” have to lay a bunch of you off? That’s the still takes 3-4 months of bureaucracy – what’s problem, and why you eventually need a influence on marketing strategies the big deal? As if there is no bureaucracy Think about it. Does the VP of Supply Chain more comprehensive view. and policies? If that answer is No, to overcome in Europe or the U.S. have influence on marketing strategies and then immediately you are working policies? If that answer is No, then immediately Gilmore: You are talking about radical, China and India shouldn’t be looked on as a you are working with one of your hands tied almost unbelievable performance with one of your hands tied behind threat but as a fantastic opportunity. behind your back. improvements. Most companies are your back. happy with and struggle just to achieve Gilmore: Our audience is a supply chain For example, in the consumer goods example continuous, incremental improvement. audience. How do they best understand we had, if I was the VO of Supply Chain and and get started with these concepts? I was making these improvements, but the Goldratt: Incremental improvement is What’s happening in India is even more And from what you’ve said earlier, is this policy was to still give big reductions for nothing. This is exactly what I am crying fascinating. I can say without blinking an eye something that really only makes sense to ordering in large quantities, rather than about. Incremental improvement generally that in India they have the best management start at the CXO level with? selling in big quantities, then I will fail in does not lead to more and more but to a of companies in the world. Better on average achieving results. crash, because one of your competitors is than I have seen in Europe of the United Goldratt: When I start with a company, yes not taking an incremental approach but States. There problem was that they had put I start from the CEO down, because from a Do you understand what that last sentence a breakthrough one, and eventually they chains on themselves, in terms of regulations, business perspective, “grass roots” is just means? It’s fine to say that as long as you crush you. tariffs, etc. This is gone. usually too hard. sell 500 a month, you get the reduction in price, but it does not mean you have to Gilmore: There really are companies Because of it, the biggest boom is happening. It’s also because if you start in one function, order 500 at a time. Because if I still have achieving these kinds of results. India is also growing at 8-10 percent per you improve that, but then immediately the to order 500, I can kiss away much chance year, and salaries are also rising rapidly. So constraint just moves to another function. of improving my supply chain. Goldratt: Yes! again, in just a few years you will see a huge consumption market. Gilmore: But in “The Goal,” Alex was a Gilmore: Can the principles not be applied Gilmore: When you present this, do CXOs plant manager. There was something in within a function? want detailed, specific examples? Do you understand what together this the TOC constraints for him. means? In a few years, we will triple the Goldratt: Let’s take R&D or new product Goldratt: Sometimes, but not usually. It’s world consumption in 5 to 6 years. You will Goldratt: He was quite lucky. If you remember, development. Let’s say you have used TOC like reading “The Goal.” Does not that make see supply chain bottlenecks everywhere in if he hadn’t have had the VP of Marketing to radically reduce development time. But simple, logical sense that you are convinced the world. The best thing that ever happened on his side because of the problems he if the other strategies of the company have contains truth? It’s the same way when we to us is what is happening now in China and was also facing, Alex would have crashed not changed, you will not know how to explain the principles to a CEO, with their India. It is time to stop complaining about into the wall. effectively use this stream of new products data. Usually the first reaction is “Let’s do it!” Chinese producers and focus on how to you can develop, and because of that the end Sometimes at an enterprise level, it’s even enter the Chinese market or export to China Gilmore: So does TOC work for the VP of result will be you have too many engineers simpler than it was for Alex Rogo. and India. What huge, beautiful markets. Supply Chain or not? and you will have to lay some of them off. How would you like to be in the situation Bron: SupplyChainDigest 2006 Gilmore: Yes, if they continue to open Goldratt: Absolutely yes, because you have to where you get buy-in from the engineers to their markets…. assume his or her boss is not an idiot. They do this in a much better way, and then come should drag the CEO to one of our seminars back and say as a reward for this effort, we 16 17 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 16-17 04-05-10 09:28
  10. 10. An interview with Eli Goldratt Interview What led you to turn from manufacturing I said, ‘No, what we call irrational behavior to product development? is simply the person behaving according “If you look at my work as a whole, you’ll to another set of assumptions. But within On Saddam Hussein, see that I started in production, then went to finance and accounting, then to marketing and sales, then to distribution, and, finally, that he is very logical.’ So we took as an experiment the most illogical person you can imagine—Saddam Hussein—and we milestones, and how with Critical Chain, to projects. In Theory built the future scenario of his actions. And of Constraints you start to believe more he was behaving so logically that we knew and more that there is one constraint that what he was doing before he is limiting the leap of the company. But did. Many times we claim that people are the theory of constraints when you open that constraint, of course, performance does not jump to infinity. Some other constraint jumps to the center behaving irrationally because we put them into a conflict and we are looking at only one side of the conflict. So of course it looks to applies to project for performance improvement. us as though they are behaving irrationally.” “Many times, it is simply moving from one function to another. The problem is, when it You seem to say that a key part of moves to another function you don’t know planning is to really focus on a few key management how to handle the new constraint. Then constraints. One of these is resources. you start to stagnate. Unfortunately, what How does an organization get the kind happens is not really stagnation because after of internal collaboration needed to move awhile the stagnation turns into common resources where they are needed, when practice. Then you may ruin the company. they are needed? With his latest novel, Critical Chain, Theory of Constraints pioneer So if you improve production what happens “You must always go for a win/win solution. many times is that the constraint moves to What we usually do is act out of a culture Eli Goldratt tries to do for project management what he did for distribution or sales. Then you improve that that teaches us to think the cake is finite. and it moves to engineering. And then what? Then you have lose/lose: if I win, you must manufacturing in his 80s best seller The Goal. In a largely favorable That’s what led me to product development lose. You can always find resources, if you and project management.” really want to. Look at the peace process Harvard Business Review critique, Jeffrey Elton and Justin Roe [Middle East]. They argued about three The ideas in Critical Chain sound great—if percent and then they found it in the Judean argue that Goldratt’s book presents powerful suggestions for only everyone was that rational! Desert. There is always a way the question “Everybody is rational. Unfortunately, not is do you want to do it? individual project management, but falls short when it comes to everybody starts from rational assumptions. I “It’s much easier in an organization. If you had this debate once with Israeli intelligence. look at my books, you’ll see that I show overall portfolio management and overlooks what they think may They wanted to use my methods. After four that the thing that needs to be sacrificed or five days, when we had analyzed many are some policies that nobody wants to be the greatest constraint: a shortage of skilled leaders. We spoke things, they said, ‘Wait a minute. We have here protect. Nobody. The size of the batch, for a preconception problem. We’re analyzing example. Everybody thinks it’s stupid, but it’s with him about these and other issues: everything logically. But some of our enemies convention. Or look at how we do projects are not logical. So whatever we do in terms of in a multi-project environment. It looks like predicting what they are doing is worthless.’ four people trying to rush through the same 18 19 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 18-19 04-05-10 09:28
  11. 11. Interview door at the same time. Eventually they will How do you respond to those who Is it a correct reading of your book that lot of education, particularly of managers. come out--a little bit crippled! say the biggest constraint in product you don’t favor formal milestones? After it’s done once, the whole environment “If they go one at a time, there is no problem. development is lack of executive decision- “I hate formal milestones! It’s one of the changes because everyone gains so much But there is a stupid assumption that says making discipline? diseases. It’s nobody’s intention to get control confidence.” the earlier you start, the earlier you finish. Of course! How can you make a decision in such a way that you definitely lengthen the That’s not always the case. And once you when the things on the table are so big and project, yet that’s what formal milestones What do you say to those who see the explain the whole cause and effect logic, you whoever you ask says, ‘I don’t know’? Even do. The problem with milestones: if you book as mostly suited to individual don’t have a problem. It’s not as though when you ask, ‘When are you going to finish, have a milestone two months from now projects? we are trying to sacrifice something holy.” in two months or four months?’ you get you immediately get the student syndrome. “Before I wrote the book, I knew I was dealing ‘I don’t know.’ And the same people who ‘There’s time, let’s waste it.’ You’ll get some with two distinct markets: the single-project GOLDRATT’S DISCIPLINE refuse to give the data complain about lack surprises and the safety’s gone. Then, when market and the multi-project environment. I “Part of the discipline Goldratt offers of decisions from the top. What happens if you achieve the milestone, it’s ‘Now we can told myself that it would take a long time for involves the proper use of measurements. you sort things differently, by sacrificing one relax.’ Then another week is gone. All in the the multi-project environment to move on He reminds managers of two criteria: of the assumptions, is that all of a sudden name of control! my ideas. The cultural change needed would measurements should induce the parts you can give reliable estimates and the same be tremendous--it would take longer than it to do what is good for the whole, and person can make a decision on the spot.” Buffers are a key element of your Critical took to change production. I wrote The Goal measurements should direct managers to Chain thinking. What about the tendency in 1984, for example, and only now are the those parts that need their attention. Many Jeffrey Elton and Justin Roe, writing to pad? ideas being widely implemented. managers rely on milestones to monitor about Critical Chain in Harvard Business “Today, we put a buffer in for each activity. “Because cultural change in product a project’s progress (and individuals’ Review, suggest that more often than not Everyone is protecting his own activity. development in a multi-task environment performance, but that practice violates the big constraint is a real shortage of His ‘realistic’ estimate means he has a 50 is so much bigger, I decided to focus on both of the above principles. Following leadership skills. percent chance of finishing, which means the single project. The person in charge is the maxim, How you measure people is “I disagree. I find that in most organizations, he’s already padded, he already has a buffer. a single manager. He’s already in trouble how they’ll behave, the book [The Critical when we are dealing with the more tangible The idea I’m proposing--and it’s known to so he’ll do anything to save his project. I Chain] points out that management by constraints, the constraint ends up usually every student of statistics--is that statistical was surprised by the intense interest in milestone motivates members of project being friction in human relationships.” deviations average out. the book that came from the multi-project teams and their managers to insert safety “Which means that if you strip the safety from environment. I immediately wrote another time before each milestone. Once safety How does the time it takes to implement individual tasks and put it at the end of the book called Project Management the TOC time has been added to each task, various Theory-of-Constraints thinking in product path you need much less safety to handle Way in which I show exactly how to implement mechanisms arise that waste that time. development differ from production? the same amount of deviations. “You don’t in a multi-project environment.” So, Goldratt concludes, the fewer the What key behaviors change? Is it about really care if each task, on its own, will be milestones, the fewer the delays. We have eliminating waste? early or late. What you care is whether the Is it available? found such dysfunctional behavior occurring “It takes six weeks in production, six months project will be early or late. So the whole idea “I’ve distributed about 4,000 copies personally, when milestones are set as artificial review in product development. Behaviors that is to swap all the safety to the end. so the pressure’s off. Hopefully it will be points tied to the end of a development change? Better communication, increased “This is not so easy because you have to published by the end of the year, but it’s phase or task stream.” trust, greater pride, and people not running convince people to give up covering their not at the top of my current priority list.” around like chickens with their heads cut ass in order to protect the company. You’re Jeffrey Elton and Justin Roe off. You call it eliminating waste, I call it asking them to trust their managers not to What is at the top of your priority list? “Bringing Discipline to Project Management” eliminating ingrained stupidities!” crucify them and most people don’t trust “When I talk to managers, I find that one of the Harvard Business Review March-April 1998 their managers very much for that sort of biggest problems in most companies is that thing. So, to implement this idea means a most of their people don’t see the company 20 21 MBA in één dag | El i Goldratt MBA in één dag | Eli GoldrattMBA Miniboekje Eli Goldratt.indd 20-21 04-05-10 09:28
  12. 12. as a whole. They see fragments. Because of this, you get localized optimums, many wrong decisions, and much miscommunication. So the question I’m currently MBA in één dag: focused on is: can we educate the entire management of the company, in one shot, in a short time, and very ultrakort en tóch volledig effectively? I don’t know. “But next March I’m doing an eight-session satellite Wat verklaart het succes van MBA in één dag? Waarin zit de program starting from the same base and covering kracht? MBA in één dag biedt antwoord op twee fundamentele all functions. I’ll show exactly how to change each vragen van managers: function to common sense rather than the prevailing view. We’ll look at how everything ties together, hoping Vraag 1: Hoe blijf ik bij? that this will generate a common language, much better U heeft een méér dan volle werkweek. Het bijhouden van de management- communication, and a slew of correct initiatives that literatuur schiet er dan bij in. Dat is logisch, maar ook zonde. Want juist met de can lift the company.” inzichten uit managementboeken kunt u effectiever en slimmer werken. En dat bespaart weer veel tijd. Maar welke boeken zijn écht goed en relevant voor u als Will you share your thinking about this at MRT’s manager? Hoe scheidt u het kaf van het koren? Wat moet u lezen en wat niet? conference? Iemand moet een selectie maken. “Yes, yes, yes. Project management was the last piece of the puzzle. Now all the parts are covered by the Vraag 2: Hoe zat het ook alweer? same logic. You’ve seen how Critical Chain works with Tijdens uw opleiding heeft u de boeken van goeroes als Henry Mintzberg, the concept. Now I can show how everything is tied Philip Kotler of Michael Porter gelezen. Maar dat is alweer een hele tijd geleden. together and how every function can understand and Terwijl u juist nú deze kennis zou kunnen toepassen: hoe geef ik beter leiding? help the other functions.” Hoe organiseer ik mijn bedrijf het beste? Hoe communiceer ik de strategie van mijn organisatie? Eigenlijk zouden Mintzberg, Kotler, Porter en al die anderen Key Learnings: eens opnieuw voorbij moeten komen. • When you open one constraint, some other constraint is likely to take its place Bijblijven + opfrissen = MBA in één dag • Often constraints merely move from one function In ‘MBA in één dag’ smelten deze twee vragen samen in een wervelend to another seminarprogramma. Ben Tiggelaar behandelt de greatest hits in management. • The best way to get collaborative resource sharing Hij selecteerde de beste inzichten uit acht meter managementboeken met maar is always to go for win/win één criterium: wat kan een manager hier praktisch mee? Morgen al! Daarmee is • It’s about “eliminating ingrained stupidities” MBA in één dag uitgegroeid tot de snelste manier om managementkennis op te • When it comes to buffers, don’t focus on individual frissen en aan te scherpen. tasks; keep your eye on the end of the project • The big problem in most companies today is Een MBA-opleiding in één dag: dat kan toch niet? getting people to see the company as a whole Uiteraard is dit seminar geen volwaardige MBA opleiding. En u krijgt ook geen titel om achter uw naam te zetten. Maar toch: managen is een praktisch vak en MBA in één dag is ontdaan van alle fratsen die veel opleidingen zo onnodig Bron: Management Roundtable, 1998 hoogdravend maken. Méér dan de inzichten uit dit seminar heeft u niet nodig om effectief te zijn als manager. 22 MBA in één dag | El i GoldrattMBA Miniboekje Eli Goldratt.indd 22-23 04-05-10 09:28
  13. 13. MBA in één dag® Eli Goldratt Op MBA in één dag passeren vele goeroes de revue. In dit boekje vindt u bij wijze van ‘luxe knipselkrant’ een aantal geselecteerde artikelen van of over Eli Goldratt. Veel leesplezier! www.mbain1dag.nl Vormgeving: Adept vormgevers, Haarlem Productie: DenkProducties Ook op www.mbain1dag.nl: reacties van deelnemers, foto’s, meer tips en veel videomateriaalMBA Miniboekje Eli Goldratt.indd 24 04-05-10 09:28

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