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The Goal (Goldratt E M)

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good month. Inventory levels have fallen and are continuing to fall rapidly. Withholding some materials has meant we're no longer choking on work-in-process. Parts are reaching the bottle- necks when they're supposed to, and the flow through the plant is much smoother than before.

And what happened to efficiencies? Well, they did fall ini- tially as we began to withhold raw material from the floor, but not as much as we had been afraid they would-it turns out we were consuming excess inventory. But with the rate of shipments up dramatically, that excess has melted quickly. And now that we're beginning to resume releases of materials to non-bottlenecks again, efficiencies are on their way back up. Donovan has even told me confidentially he thinks the real numbers in the future will be almost the same as before.

The best news is we've wiped out our backlog of overdue orders. Amazing as it seems, we're completely caught up. So cus- tomer service has improved. Throughput is up. We're on our way back. It's too bad the standard report we've prepared can't begin to tell the full story of what's really going on.

When I've finished, I look up the table and see Hilton Smyth whispering something to Bill Peach. There is quiet around the table for a moment. Then Bill nods to Hilton and talks to me.

"Good job, Al," Bill says stiffly.

Through with me, Bill asks another manager to deliver his report. I sit back, irritated slightly that Peach wasn't more posi- tive, that he didn't put more praise on me the way Frost had indicated he should. I came in here feeling as though we'd really turned the plant around. And I guess I expected a little more than a "good job," a pat on the head.

But then I have to remind myself that Peach doesn't know the extent of the change. Should he know? Should we be telling him? Lou has asked me about this. And I've told him, no; let's hold off for a while.

We could go to Bill Peach and make a presentation to him, put all our cards on the table and let him decide. In fact, that's exactly what we will do eventually. But not yet. And I think I have a good reason.

I've worked with Bill Peach for a lot of years; I know him pretty well. He's a smart man-but he is not an innovator. A couple of years ago, he might have let us run with this for a while. Not today. I have a feeling if we go to him now, he'll put on his


hard nose and tell me to run the plant by the cost accounting methods he believes in.

I have to bide my time until I can go to him with a solid case that my way (Jonah's way, really) is the one that truly works. It's too early for that. We've broken too many rules to tell him the full story now.

But will we have the time? That's what I keep asking myself. Peach hasn't voluntarily lifted the threat to close the plant. I thought he might say something (publicly or privately) after this report, but he hasn't. I look at him at the end of the table. He seems distracted, not like himself. The others talk and he seems only half interested. Hilton seems to cue him on what to say. What's with him?

The meeting breaks up about an hour after lunch, and by then I've decided to have a private talk with Peach if I can get it. I follow him out into the corridor from the conference room and ask him. He invites me into his office.

"So when are you going to let us off the hook?" I ask him after the door is closed.

Bill sits down in a big upholstered chair and I take the one opposite him. Without the desk between us, it's a nice little inti- mate chat.

Bill looks straight at me and says, "What makes you think I'm going to?"

"Bearington is on its way back," I tell him. "We can make that plant make money for the division."

"Can you?" he asks. "Look, Al, you've had a good month. That's a step in the right direction. But can you give us a second good month? And a third and fourth? That's what I'm waiting to see."

"We'll give them to you," I say to him.

"I'm going to be frank," says Peach. "I'm not yet convinced this hasn't been just a flash in the pan, so to speak. You had a huge overdue backlog. It was inevitable you'd ship it eventually. What have you done to reduce costs? Nothing that I can see. It's going to take a ten or fifteen percent reduction in operating ex- pense to make the plant profitable for the long term."

I feel my heart sink. Finally, I say, "Bill, if next month we turn in another improvement, will you at least delay the recom- mendation to close the plant?"


He shakes his head. "It'll have to be a bigger improvement than what you gave us in this past period."

"How big?"

"Just give me fifteen percent more on the bottom line than you did this month," he says.

I nod. "I think we can do that," I say-and note the split second of shock blink into Peach's face.

Then he says, "Fine. If you can deliver that, and keep deliv- ering it, we'll keep Bearington open."

I smile. If I do this for you, I'm thinking, you'd be an idiot to close us.

Peach stands, our chat concluded.

I fly the Mazda up the entrance ramp to the Interstate with the accelerator floored and the radio turned up loud. The adren- alin is pumping. The thoughts in my head are racing faster than the car.

Two months ago I figured I might be sending out my resume by now. But Peach just said if we turned in another good month he'd let the plant stay open. We're almost there. We just might be able to pull this off. Just one more month.

But fifteen percent?

We've been eating up our backlog of orders at a terrific rate. And by doing so we've been able to ship a tremendous volume of product-tremendous by any comparison: last month, last quar- ter, last year. It's given us a big surge of income, and it's looked fantastic on the books. But now that we've shipped all the overdues, and we're putting out new orders much faster than before...

The thought creeps up on me that I'm in really big trouble. Where the hell am I going to get the orders that will give me an extra fifteen percent?

Peach isn't just asking for another good month; he's de- manding an incredible month. He hasn't promised anything; I have-and probably too much. I'm trying to remember the or- ders scheduled for the coming weeks and attempting to calculate in my head if we're going to have the volume of business neces- sary for the bottom-line increase Peach wants to see. I have a scary feeling it won't be enough.

Okay, I can ship ahead of schedule. I can take the orders

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