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The Goal (Goldratt E M)

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But I wonder how Jonah knew? He seemed to know right away that productivity hadn't increased. There were those ques- tions he asked.

One of them, I remember as I'm driving, was whether we had been able to sell any more products as a result of having the robots. Another one was whether we had reduced the number of people on the payroll. Then he had wanted to know if inventories had gone down. Three basic questions.

When I get home, Julie's car is gone. She's out some place, which is just as well. She's probably furious at me. And I simply do not have time to explain right now.

After I'm inside, I open my briefcase to make a note of those questions, and I see the list of measurements Jonah gave me last night. From the second I glance at those definitions again, it's obvious. The questions match the measurements.

That's how Jonah knew. He was using the measurements in the crude form of simple questions to see if his hunch about the robots was correct: did we sell any more products (i.e., did our throughput go up?); did we lay off anybody (did our operational expense go down?); and the last, exactly what he said: did our inventories go down?

With that observation, it doesn't take me long to see how to express the goal through Jonah's measurements. I'm still a little puzzled by the way he worded the definitions. But aside from that, it's clear that every company would want to have its throughput go up. Every company would also want the other two, inventory and operational expense, to go down, if at all pos- sible. And certainly it's best if they all occur simultaneously-just as with the trio that Lou and I found.

So the way to express the goal is this?

Increase throughput while simultaneously reducing both in- ventory and operating expense.

That means if the robots have made throughput go up and the other two go down, they've made money for the system. But what's really happened since they started working?

I don't know what effect, if any, they've had on throughput. But off the top of my head, I know inventories have generally increased over the past six or seven months, although I can't say for sure if the robots are to blame. The robots have increased our depreciation, because they're new equipment, but they haven't directly taken away any jobs from the plant; we simply shifted

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people around. Which means the robots had to increase opera- tional expense.

Okay, but efficiencies have gone up because of the robots. So maybe that's been our salvation. When efficiencies go up, the cost-per-part has to come down.

But did the cost really come down? How could the cost-per- part go down if operational expense went up?

By the time I make it to the plant, it's one o'clock, and I still haven't thought of a satisfactory answer. I'm still thinking about it as I walk through the office doors. The first thing I do is stop by Lou's office.

"Have you got a couple minutes?" I ask.

"Are you kidding?" he says. "I've been looking for you all morning."

He reaches for a pile of paper on the corner of his desk. I know it's got to be the report he has to send up to division.

"No, I don't want to talk about that right now," I tell him. "I've got something more important on my mind."

I watch his eyebrows go up.

"More important than this report for Peach?"

"Infinitely more important than that," I tell him.

Lou shakes his head as he leans back in his swivel chair and gestures for me to have a seat.

"What can I do for you?"

"After those robots out on the floor came on line, and we got most of the bugs out and all that," I say, "what happened to our sales?"

Lou's eyebrows come back down again; he's leaning forward and squinting at me over his bifocals.

"What kind of question is that?" he asks.

"A smart one, I hope," I say. "I need to know if the robots had any impact on our sales. And specifically if there was any increase after they came on line."

"Increase? Just about all of our sales have been level or in a downhill slide since last year."

I'm a little irritated.

"Well, would you mind just checking?" I ask.

He holds up his hands in surrender.

"Not at all. Got all the time in the world."

Lou turns to his computer, and after looking through some

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files, starts printing out handfuls of reports, charts, and graphs. We both start leafing through. But we find that in every case where a robot came on line, there was no increase in sales for any product for which they made parts, not even the slightest blip in the curve. For the heck of it, we also check the shipments made from the plant, but there was no increase there either. In fact, the only increase is in overdue shipments-they've grown rapidly over the last nine months.

Lou looks up at me from the graphs.

"Al, I don't know what you're trying to prove," he says. "But if you want to broadcast some success story on how the robots are going to save the plant with increased sales, the evidence just doesn't exist. The data practically say the opposite."

"That's exactly what I was afraid of," I say.

"What do you mean?"

"I'll explain it in a minute. Let's look at inventories," I tell him. "I want to find out what happened to our work-in-process on parts produced by the robots."

Lou gives up.

"I can't help you there," he says. "I don't have anything on inventories by part number."

"Okay, let's get Stacey in on this."

Stacey Potazenik manages inventory control for the plant. Lou makes a call and pulls her out of another meeting.

Stacey is a woman in her early 40's. She's tall, thin, and brisk in her manner. Her hair is black with strands of gray and she wears big, round glasses. She is always dressed in jackets and skirts; never have I seen her in a blouse with any kind of lace, ribbon or frill. I know almost nothing about her personal life. She wears a ring, but she's never mentioned a husband. She rarely mentions anything about her life outside the plant. I do know she works hard.

When she comes in to see us, I ask her about work-in-process on those parts passing through the robot areas.

"Do you want exact numbers?" she asks.

"No, we just need to know the trends," I say.

"Well, I can tell you without looking that inventories went up on those parts," Stacey says.

"Recently?"

"No, it's been happening since late last summer, around the

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end of the third quarter," she says . "And you can't blame me for it-even though everyone always does-because I fought it every step of the way."

"What do you mean?"

"You remember, don't you? Or maybe you weren't here then. But when the reports came in, we found the robots in weld- ing were only running at something like thirty percent efficiency. And the other robots weren't much better. Nobody would stand for that."

I look over at Lou.

"We had to do something," he says. "Frost would have had my head if I hadn't spoken up. Those things were brand new and very expensive. They'd never pay for themselves in the projected time if we kept them at thirty percent."

"Okay, hold on a minute," I tell him. I turn back to Stacey. "What did you do then?"

She says, "What could I do? I had to release more materials to the floor in all the areas feeding the robots. Giving the robots more to produce increased their efficiencies. But ever since then, we've been ending each month with a surplus of those parts."

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