The Goal

by E M Goldratt

  He nods slowly, but then he asks, "So what do we do the next time this happens?"

  I smile.

  "Probably the same damn thing," I tell him. Then I turn and say, "Maxine, give us two more here, please. No, on second thought, we're going to save you a lot of walking. Make it a pitcher."

  So we made it through today's crisis. We won. Just barely. And now that Donovan is gone and the effects of the alcohol are wearing off, I can't see what there was to celebrate. We managed to ship one very late order today. Whoopee.

  The real issue is I've got a manufacturing plant on the criti- cal list. Peach has given it three months to live before he pulls the plug.

  That means I have two, maybe three more monthly reports in which to change his mind. After that, the sequence of events will be that he'll go to corporate management and present the numbers. Everybody around the table will look at Granby. Granby will ask a couple of questions, look at the numbers one more time, and nod his head. And that will be it. Once the execu- tive decision has been made, there will be no changing it.

  They'll give us time to finish our backlog. And then 600 peo- ple will head for the unemployment lines-where they will join their friends and former co-workers, the other 600 people whom we have already laid off.

  And so the UniWare Division will drop out of yet another market in which it can't compete. Which means the world will no longer be able to buy any more of the fine products we can't make cheap enough or fast enough or good enough or some- thing enough to beat the Japanese. Or most anybody else out there for that matter. That's what makes us another fine division in the UniCo "family" of businesses (which has a record of earn- ings growth that looks like Kansas), and that's why we'll be just

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  another fine company in the Who-Knows-What Corporation af- ter the big boys at headquarters put together some merger with some other loser. That seems to be the essence of the company's strategic plan these days.

  What's the matter with us?

  Every six months it seems like some group from corporate is coming out with some new program that's the latest panacea to all our problems. Some of them seem to work, but none of them does any good. We limp along month after month, and it never gets any better. Mostly it gets worse.

  Okay. Enough of the bitching, Rogo. Try to calm down. Try to think about this rationally. There's nobody around. It's late. I am alone finally... here in the coveted corner office, throne room of my empire, such as it is. No interruptions. The phone is not ringing. So let's try to analyze the situation. Why can't we consistently get a quality product out the door on time at the cost that can beat the competition?

  Something is wrong. I don't know what it is, but something basic is very wrong. I must be missing something.

  I'm running what should be a good plant. Hell, it is a good plant. We've got the technology. We've got some of the best n/c machines money can buy. We've got robots. We've got a com- puter system that's supposed to do everything but make coffee.

  We've got good people. For the most part we do. Okay, we're short in a couple of areas, but the people we have are good for the most part, even though we sure could use more of them. And I don't have too many problems with the union. They're a pain in the ass sometimes, but the competition has unions too. And, hell, the workers made some concessions last time-not as many as we'd have liked, but we have a livable contract.

  I've got the machines. I've got the people. I've got all the materials I need. I know there's a market out there, because the competitors' stuff is selling. So what the hell is it?

  It's the damn competition. That's what's killing us. Ever since the Japanese entered our markets, the competition has been incredible. Three years ago, they were beating us on quality and product design. We've just about matched them on those. But now they're beating us on price and deliveries. I wish I knew their secret.

  What can I possibly do to be more competitive?

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  I've done cost reduction. No other manager in this division has cut costs to the degree I have. There is nothing left to trim.

  And, despite what Peach says, my efficiencies are pretty damn good. He's got other plants with worse, I know that. But the better ones don't have the competition I do. Maybe I could push efficiencies some more, but... I don't know. It's like whipping a horse that's already running as fast as it can.

  We've just got to do something about late orders. Nothing in this plant ships until it's expedited. We've got stacks and stacks of inventory out there. We release the materials on schedule, but nothing comes out the far end when it's supposed to.

  That's not uncommon. Just about every plant I know of has expeditors. And you walk through just about any plant in Amer- ica about our size and you'll find work-in-process inventory on the same scale as what we have. I don't know what it is. On the one hand, this plant is no worse than most of the ones I've seen- and, in fact, it's better than many. But we're losing money.

  If we could just get our backlog out the door. Sometimes it's like little gremlins out there. Every time we start to get it right, they sneak around between shifts when nobody is looking and they change things just enough so everything gets screwed up. I swear it's got to be gremlins.

  Or maybe I just don't know enough. But, hell, I've got an engineering degree. I've got an MBA. Peach wouldn't have named me to the job if he hadn't thought I was qualified. So it can't be me. Can it?

  Man, how long has it been since I started out down there in industrial engineering as a smart kid who knew everything- fourteen, fifteen years? How many long days have there been since then?

  I used to think if I worked hard I could do anything. Since the day I turned twelve I've worked. I worked after school in my old man's grocery store. I worked through high school. When I was old enough, I spent my summers working in the mills around here. I was always told that if I worked hard enough it would pay off in the end. That's true, isn't it? Look at my brother; he took the easy way out by being the first born. Now he owns a grocery store in a bad neighborhood across town. But look at me. I worked hard. I sweated my way through engineering school. I got a job with a big company. I made myself a stranger to my wife and kids. I took all the crap that UniCo could give me and said,

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  "I can't get enough! Give me more!" Boy, am I glad I did! Here I am, thirty-eight years old, and I'm a crummy plant manager! Isn't that wonderful? I'm really having fun now.

  Time to get the hell out of here. I've had enough fun for one day.

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  3

  I wake up with Julie on top of me. Unfortunately, Julie is not being amorous- she is reaching for the night table where the digi- tal alarm clock says 6:03 A.M. The alarm buzzer has been droning for three minutes. Julie smashes the button to kill it. With a sigh, she rolls off of me. Moments later, I hear her breathing resume a steady pace; she is asleep again. Welcome to a brand new day.

  About forty-five minutes later, I'm backing the Mazda out of the garage. It's still dark outside. But a few miles down the road the sky lightens. Halfway to the city, the sun rises. By then, I'm too busy thinking to notice it at first. I glance to the side and it's floating out there beyond the trees. What makes me mad some- times is that I'm always running so hard that-like most other people, I guess-I don't have time to pay attention to all the daily miracles going on around me. Instead of letting me eyes drink in the dawn, I'm watching the road and worrying about Peach. He's called a meeting at headquarters for all the people who directly report to him-in essence, his plant managers and his staff. The meeting, we are told, is to begin promptly at 8:00 A.M. The funny thing is that Peach is not saying what the meeting is about. It's a big secret-you know: hush-hush, like maybe there's a war on or something. He has instructed us to be there at eight and to bring with us reports and other data that'll let us go through a thor- ough assessment of all the division's operations.

  Of course, all of us have found out what the meeting is about. At least we have a fairly g
ood idea. According to the grapevine, Peach is going to use the meeting to lay some news on us about how badly the division performed in the first quarter. Then he's going to hit us with a mandate for a new productivity drive, with targeted goals for each plant and commitments and all that great stuff. I suppose that's the reason for the commandment to be there at eight o'clock on the button with numbers in hand; Peach must've thought it would lend a proper note of discipline and urgency to the proceedings.

  The irony is that in order to be there at such an early hour, half the people attending will have had to fly in the night before. Which means hotel bills and extra meals. So in order to an-

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  nounce to us how badly the division is doing, Peach is going to pay out a couple of grand more than he would have had to pay if he'd begun the meeting an hour or two later.

  I think that Peach may be starting to lose it. Not that I sus- pect him of drifting toward a breakdown or anything. It's just that everything seems to be an over-reaction on his part these days. He's like a general who knows he is losing the battle, but forgets his strategy in his desperation to win.

  He was different a couple of years ago. He was confident. He wasn't afraid to delegate responsibility. He'd let you run your own show-as long as you brought in a respectable bottom line. He tried to be the "enlightened" manager. He wanted to be open to new ideas. If some consultant came in and said, "Employees have to feel good about their work in order to be productive," Peach would try to listen. But that was when sales were better and budgets were flush.

  What does he say now?

  "I don't give a damn if they feel good," he says. "If it costs an extra nickel, we're not paying for it."

  That was what he said to a manager who was trying to sell Peach on the idea of a physical fitness center where employees could work out, the premise being that everyone would do better work because healthy employees are happy employees, etc. Peach practically threw him out of his office.

  And now he's walking into my plant and wreaking havoc in the name of improving customer service. That wasn't even the first fight I've had with Peach. There have been a couple of oth- ers, although none as serious as yesterday's. What really bugs me is I used to get along very well with Peach. There was a time when I thought we were friends. Back when I was on his staff, we'd sit in his office at the end of the day sometimes and just talk for hours. Once in a while, we'd go out and get a couple of drinks together. Everybody thought I was brown-nosing the guy. But I think he liked me precisely because I wasn't. I just did good work for him. We hit it off together.

  Once upon a time, there was a crazy night in Atlanta at the annual sales meeting, when Peach and I and a bunch of wackos from marketing stole the piano from the hotel bar and had a sing-along in the elevator. Other hotel guests who were waiting for an elevator would see the doors open, and there we'd be, midway through the chorus of some Irish drinking song with

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  Peach sitting there at the keyboard tickling those ivories. (He's a pretty good piano player, too). After an hour, the hotel manager finally caught up with us. By then, the crowd had grown too big for the elevator, and we were up on the roof singing to the entire city. I had to pull Bill out of this fight with the two bouncers whorn the manager had enlisted to kill the party. What a night that was. Bill and I ended up toasting each other with orange juice at dawn in some greasy-spoon diner on the wrong end of town.

  Peach was the one who let me know that I really had a future with this company. He was the guy who pulled me into the pic- ture when I was just a project engineer, when all I knew was how to try hard. He was the one who picked me to go to headquarters. It was Peach who set it up so I could go back and get my MBA.

  Now we're screaming at each other. I can't believe it.

  By 7:50, I'm parking my car in the garage under the UniCo Building. Peach and his division staff occupy three floors of the building. I get out of the car and get my briefcase from the trunk. It weighs about ten pounds today, because it's full of reports and computer printouts. I'm not expecting to have a nice day. With a frown on my face, I start to walk to the elevator.

  "Al!" I hear from behind me.

  I turn; it's Nathan Selwin coming toward me. I wait for him.

  "How's it going?" he asks.

  "Okay. Good to see you again," I tell him. We start walking together. "I saw the memo on your appointment to Peach's staff. Congratulations.''

  "Thanks," he says. "Of course, I don't know if it's the best place to be right now with everything that's going on."

  "How come? Bill keeping you working nights?"

  "No, it's not that," he says. Then he pauses and looks at me. 'Haven't you heard the news?"

  "What about?"

  He stops suddenly and looks around. There is nobody else around us.

  "About the division," he says in a low voice.

  I shrug; I don't know what he's talking about.

  "The whole division is going to go on the block," he says.

  Everybody on Fifteen is crapping in their pants. Peach got the

  word from Granby a week ago. He's got till the end of the year to

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  improve performance, or the whole division goes up for sale. And I don't know if it's true, but I heard Granby specifically say that if the division goes, Peach goes with it."

  "Are you sure?"

  Nathan nods and adds, "Apparently it's been in the making for quite a while."

  We start walking again.

  My first reaction is that it's no wonder Peach has been acting like a madman lately. Everything he's worked for is in jeopardy. If some other corporation buys the division, Peach won't even have a job. The new owners will want to clean house and they're sure to start at the top.

  And what about me; will I have a job? Good question, Rogo. Before hearing this, I was going on the assumption that Peach would probably offer me some kind of position if the plant is shut down. That's usually the way it goes. Of course, it may not be what I want. I know there aren't any UniWare plants out there in need of a manager. But I figured maybe Peach would give me my old staff job back-although I also know it's already been filled and I've heard that Peach is very satisfied with the guy. Come to think of it, he did kind of threaten yesterday with his opening remarks that I might not have a job.

  Shit, I could be on the street in three months!

  "Listen, Al, if anybody asks you, you didn't hear any of this from me," says Nat.

  And he's gone. I find myself standing alone in the corridor on the fifteenth floor. I don't even remember having gotten on the elevator, but here I am. I vaguely recall Nat talking to me on the way up, saying something about everybody putting out their resumes.

  I look around, feel stupid, wonder where I'm supposed to be now, and then I remember the meeting. I head down the hall where I see some others going into a conference room.

  I go in and take a seat. Peach is standing at the far end of the table. A slide projector sits in front of him. He's starting to talk. A clock on the wall indicates it's exactly eight o'clock.

  I look around at the others. There are about twenty of them, most of them looking at Peach. One of them, Hilton Smyth, is looking at me. He's a plant manager, too, and he's a guy I've never liked much. For one thing, I resent his style-he's always promoting some new thing he's doing, and most of the time what

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  he's doing isn't any different from the things everyone else is doing. Anyway, he's looking at me as if he's checking me out. Is it because I look a little shaken? I wonder what he knows. I stare back at him until he turns toward Peach.

  When I'm finally able to tune into what Peach is saying, I find he's turning the discussion over to the division controller, Ethan Frost, a thin and wrinkled old guy who, with a little makeup, could double for the Grim Reaper.

  The news this morning befits the messenger. The first quar- ter has just ended, and it's been a terrible one everywhere. The division is now in real danger of a
shortfall in cash. All belts must be tightened.

  When Frost is done, Peach stands and proceeds to deliver some stern talk about how we're going to meet this challenge. I try to listen, but after his first couple of sentences, my mind drops out. All I hear are fragments.

  "... imperative for us to minimize the downside risk..." "... acceptable to our current marketing posture..." "... without reducing strategic expense..."... required sacri- fices..." "... productivity improvements at all loca- tions..."

  Graphs from the slide projector begin to flash on the screen. A relentless exchange of measurements between Peach and the others goes on and on. I make an effort, but I just can't concen- trate.

  "... first quarter sales down twenty-two percent compared to a year ago..." "... total raw materials' costs in- creased..." "... direct labor ratios of hours applied to hours paid had a three-week high..." "... now if you look at num- bers of hours applied to production versus standard, we're off by over twelve percent on those efficiencies..."

  I'm telling myself that I've got to get hold of myself and pay attention. I reach into my jacket to get a pen to take some notes.

  "And the answer is clear," Peach is saying. "The future of our business depends upon our ability to increase productivity."

  But I can't find a pen. So I reach into my other pocket. And I pull out the cigar. I stare at it. I don't smoke anymore. For a few seconds I'm wondering where the hell this cigar came from.