by E M Goldratt
As he approaches, I'm thinking that Eddie has probably never done anything improper in his entire life-unless it was expected of him. Call him Mr. Regularity.
We talk about some of the orders going through. As usual, everything is out of control. Eddie, of course, doesn't realize this. To him, everything is normal. And if it's normal, it must be right.
He's telling me-in elaborate detail-about what is running tonight. Just for the hell of it, I feel like asking Eddie to define what he's doing tonight in terms of something like net profit.
I want to ask him, "Say, Eddie, how's our impact on ROI been in the last hour? By the way, what's your shift done to im- prove cash flow? Are we making money?"
It's not that Eddie hasn't heard of those terms. It's just that those concerns are not part of his world. His world is one mea- sured in terms of parts per hour, man-hours worked, numbers of orders filled. He knows labor standards, he knows scrap factors, he knows run times, he knows shipping dates. Net profit, ROI, cash flow-that's just headquarters talk to Eddie. It's absurd to think I could measure Eddie's world by those three. For Eddie, there is only a vague association between what happens on his shift and how much money the company makes. Even if I could open Eddie's mind to the greater universe, it would still be very difficult to draw a clear connection between the values here on
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the plant floor and the values on the many floors of UniCo head- quarters. They're too different.
In the middle of a sentence, Eddie notices I'm looking at him funny.
"Something wrong?" asks Eddie.
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7
When I get home, the house is dark except for one light. I try to keep it quiet as I come in. True to her word, Julie has left me some dinner in the microwave. As I open the door to see what delectable treat awaits me (it seems to be some variety of mystery meat) I hear a rustling behind me. I turn around, and there stands my little girl, Sharon, at the edge of the kitchen.
"Well! If it isn't Miz Muffet!" I exclaim. "How is the tuffet these days?"
She smiles. "Oh... not bad."
"How come you're up so late?" I ask.
She comes forward holding a manila envelope. I sit down at the kitchen table and put her on my knee. She hands the enve- lope to me to open.
"It's my report card," she says.
"No kidding?"
"You have to look at it," she tells me.
And I do.
"You got all A's!" I say.
I give her a squeeze and big kiss.
"That's terrific!" I tell her. "That's very good, Sharon. I'm really proud of you. And Til bet you were the only kid in your class to do this well."
She nods. Then she has to tell me everything. I let her go on, and half an hour later, she's barely able to keep her eyes open. I carry her up to her bed.
But tired as I am, I can't sleep. It's past midnight now. I sit in the kitchen, brooding and picking at dinner. My kid is getting A's in the second grade while Tin flunking out in business.
Maybe I should just give up, use what time I've got to try to land another job. According to what Selwin said, that's what ev- eryone at headquarters is doing. Why should I be different?
For a while, I try to convince myself that a call to a head- hunter is the smart thing to do. But, in the end, I can't. A job with another company would get Julie and me out of town, and maybe fortune would bring me an even better position than I've got now although I doubt it; my track record as a plant manager hasn't
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exactly been stellar.) What turns me against the idea of looking for another job is I'd feel I were running away. And I just can't do that.
It's not that I feel I owe my life to the plant or the town or the company, but I do feel some responsibility. And aside from that, I've invested a big chunk of my life in UniCo. I want that investment to pay off. Three months is better than nothing for a last chance.
My decision is, I'm going to do everything I can for the three months.
But that decided, the big question arises: what the hell can I really do? I've already done the best I can with what I know. More of the same is not going to do any good.
Unfortunately, I don't have a year to go back to school and re-study a lot of theory. I don't even have the time to read the magazines, papers, and reports piling up in my office. I don't have the time or the budget to screw around with consultants, making studies and all that crap. And anyway, even if I did have the time and money, I'm not sure any of those would give me a much better insight than what I've got now.
I have the feeling there are some things I'm not taking into account. If I'm ever going to get us out of this hole, I can't take anything for granted; Tm going to have to watch closely and think carefully about what is basically going on... take it one step at a time.
I slowly realize that the only tools I have-limited as they may be-are my own eyes and ears, my own hands, my own voice, my own mind. That's about it. I am all I have. And the thought keeps coming to me: I don't know if that's enough.
When I finally crawl into bed, Julie is a lump under the sheets. She is exactly the way I left her twenty-one hours ago. She's sleeping. Lying beside her on the mattress, still unable to sleep, I stare at the dark ceiling.
That's when I decide to try to find Jonah again.
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8
Two steps after rolling out of bed in the morning, I don't like moving at all. But in the midst of a morning shower, memory of my predicament returns. When you've only got three months to work with, you don't have much time to waste feeling tired. I rush past Julie-who doesn't have much to say to me-and the kids, who already seem to sense that something is wrong, and head for the plant.
The whole way there I'm thinking about how to get in touch with Jonah. That's the problem. Before I can ask for his help, I've got to find him.
The first thing I do when I get to the office is have Fran barricade the door against the hordes massing outside for frontal attack. Just as I reach my desk, Fran buzzes me; Bill Peach is on the line.
"Great," I mutter.
I pick up the phone.
"Yes, Bill."
"Don't you ever walk out of one of my meetings again," rum- bles Peach. "Do you understand me?"
"Yes, Bill."
"Now, because of your untimely absence yesterday, we've got some things to go over," he says.
A few minutes later, I've pulled Lou into the office to help me with the answers. Then Peach has dragged in Ethan Frost and we're having a four-way conversation.
And that's the last chance I have to think about Jonah for the rest of the day. After I'm done with Peach, half a dozen people come into my office for a meeting that has been postponed since last week.
The next thing I know, I look out the window and it's dark outside. The sun has set and I'm still in the middle of my sixth meeting of the day. After everyone has gone, I take care of some paperwork. It's past seven when I hop in the car to go home.
While waiting in traffic for a long light to turn green, I finally have the opportunity to remember how the day began. That's when I get back to thinking about Jonah. Two blocks later, I remember my old address book.
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I pull over at a gas station and use the pay phone to call Julie.
"Hello," she answers.
"Hi, it's me," I say. "Listen, I've got to go over to my mother's for something. I'm not sure how long I'll be, so why don't you go ahead and eat without me."
"The next time you want dinner-"
"Look, don't give me any grief, Julie; this is important."
There is a second of silence before I hear the click.
It's always a little strange going back to the old neighbor- hood, because everywhere I look is some kind of memory waiting just out of sight in my mind's eye. I pass the corner where I had the fight with Bruno Krebsky. I drive down the street where we played ball summer after summer. I see the alley where I made out for the first time with Angelina. I go
past the utility pole upon which I grazed the fender of my old man's Chevy (and subse- quently had to work two months in the store for free to pay for the repair). All that stuff. The closer I get to the house, the more memories come crowding in, and the more I get this feeling that's kind of warm and uncomfortably tense.
Julie hates to come here. When we first moved to town, we used to come down every Sunday to see my mother and Danny and his wife, Nicole. But there got to be too many fights about it, so we don't make the trip much anymore.
I park the Mazda by the curb in front of the steps to my mother's house. It's a narrow, brick row house, about the same as any other on the street. Down at the corner is my old man's store, the one my brother owns today. The lights are off down there; Danny closes at six. Getting out of my car, I feel conspicuous in my suit and tie.
My mother opens the door.
"Oh my god," she says. She clutches her hands over her heart. "Who's dead?"
"Nobody died, Mom," I say.
"It's Julie, isn't it," she says. "Did she leave you?"
"Not yet," I say.
"Oh," she says. "Well, let me see... it isn't Mothers' Day..."
"Mom, I'm just here to look for something."
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"Look for something? Look for what?" she asks, turning to let me in. "Come in, come in. You're letting all the cold inside. Boy, you gave me a scare. Here you are in town and you never come to see me anymore. What's the matter? You too important now for your old mother?"
"No, of course not, Mom. I've been very busy at the plant," I say.
"Busy, busy," she says leading the way to the kitchen. "You hungry?"
"No, listen, I don't want to put you to any trouble," I say.
She says, "Oh, it's no trouble. I got some ziti I can heat up. You want a salad too?"
"No, listen, a cup of coffee will be fine. I just need to find my old address book," I tell her. "It's the one I had when I was in college. Do you know where it might be?"
We step into the kitchen.
"Your old address book..." she muses as she pours a cup of coffee from the percolator. "How about some cake? Danny brought some day-old over last night from the store."
"No thanks, Mom. I'm fine," I say. "It's probably in with all my old notebooks and stuff from school."
She hands me the cup of coffee. "Notebooks..."
"Yeah, you know where they might be?"
Her eyes blink. She's thinking.
"Well... no. But I put all that stuff up in the attic," she says.
"Okay, I'll go look there," I say.
Coffee in hand, I head for the stairs leading to the second floor and up into the attic.
"Or it might all be in the basement," she says.
Three hours later-after dusting through the drawings I made in the first grade, my model airplanes, an assortment of musical instruments my brother once attempted to play in his quest to become a rock star, my yearbooks, four steamer trunks filled with receipts from my fatber's business, old love letters, old snapshots, old newspapers, old you-name-it-the address book is still at large. We give up on the attic. My mother prevails upon me to have some ziti. Then we try the basement.
"Oh, look!" says my mother.
"Did you find it?" I ask.
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"No, but here's a picture of your Uncle Paul before he was arrested for embezzlement. Did I ever tell you that story?"
After another hour, we've gone through everything, and I've had a refresher course in all there is to know about Uncle Paul. Where the hell could it be?
"Well, I don't know," says my mother. "Unless it could be in your old room."
We go upstairs to the room I used to share with Danny. Over in the corner is the old desk where I used to study when I was a kid. I open the top drawer. And, of course, there it is.
"Mom, I need to use your phone."
My mother's phone is located on the landing of the stairs between the floors of the house. It's the same phone that was installed in 1936 after my father began to make enough money from the store to afford one. I sit down on the steps, a pad of paper on my lap, briefcase at my feet. I pick up the receiver, which is heavy enough to bludgeon a burglar into submission. I dial the number, the first of many.
It's one o'clock by now. But I'm calling Israel, which happens to be on the other side of the world from us. And vice versa. Which roughly means their days are our nights, our nights are their mornings, and consequently, one in the morning is not such a bad time to call.
Before long, I've reached a friend I made at the university, someone who knows what's become of Jonah. He finds me an- other number to call. By two o'clock, I've got the tablet of paper on my lap covered with numbers I've scribbled down, and I'm talking to some people who work with Jonah. I convince one of them to give me the number where I can reach him. By three o'clock, I've found him. He's in London. After several transfers here and there across some office of some company, I'm told that he will call me when he gets in. I don't really believe that, but I doze by the phone. And forty-five minutes later, it rings.
"Alex?"
It's his voice.
"Yes, Jonah," I say.
"I got a message you had called."
"Right," I say. "You remember our meeting in O'Hare."
"Yes, of course I remember it," he says. "And I presume you have something to tell me now."
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I freeze for a moment. Then I realize he's referring to his question, what is the goal?
"Right," I say.
"Well?"
I hesitate. My answer seems so ludicrously simple I am sud- denly afraid that it must be wrong, that he will laugh at me. But I blurt it out.
"The goal of a manufacturing organization is to make money," I say to him. "And everything else we do is a means to achieve the goal."
But Jonah doesn't laugh at me.
"Very good, Alex. Very good," he says quietly.
"Thanks," I tell him. "But, see, the reason I called was to ask you a question that's kind of related to the discussion we had at O'Hare."
"What's the problem?" he asks.
"Well, in order to know if my plant is helping the company make money, I have to have some kind of measurements," I say. "Right?"
"That's correct," he says.
"And I know that up in the executive suite at company head- quarters, they've got measurements like net profit and return on investment and cash flow, which they apply to the overall organi- zation to check on progress toward the goal."
"Yes, go on," says Jonah.
"But where I am, down at the plant level, those measure- ments don't mean very much. And the measurements I use inside the plant... well, I'm not absolutely sure, but I don't think they're really telling the whole story," I say.
"Yes, I know exactly what you mean," says Jonah.
"So how can I know whether what's happening in my plant is truly productive or non-productive?" I ask.
For a second, it gets quiet on the other end of the line. Then I hear him say to somebody with him, "Tell him I'll be in as soon as I'm through with this call."
Then he speaks to me.
"Alex, you have hit upon something very important," he says. "I only have time to talk to you for a few minutes, but perhaps I can suggest a few things which might help you. You see, there is more than one way to express the goal. Do you understand? The goal stays the same, but we can state it in differ-
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ent ways, ways which mean the same thing as those two words, 'making money.' '
"Okay," I answer, "so I can say the goal is to increase net profit, while simultaneously increasing both ROI and cash flow, and that's the equivalent of saying the goal is to make money."
"Exactly," he says. "One expression is the equivalent of the other. But as you have discovered, those conventional measure- ments you use to express the goal do not lend themselves very well to the daily operations of the manufacturing organization. In fact, that's why I developed a different se
t of measurements."
"What kind of measurements are those?" I ask.
"They're measurements which express the goal of making money perfectly well, but which also permit you to develop oper- ational rules for running your plant," he says. "There are three of them. Their names are throughput, inventory and operational expense."
"Those all sound familiar," I say.
"Yes, but their definitions are not," says Jonah. "In fact, you will probably want to write them down,"
Pen in hand, I flip ahead to a clean sheet of paper on my tablet and tell him to go ahead.
"Throughput," he says, "is the rate at which the system gen- erates money through sal e s ."
I write it down word for word.
Then I ask, "But what about production? Wouldn't it be more correct to say-"
"No," he says. "Through sal e s -not production. If you pro- duce something, but don't sell it, it's not throughput. Got it?"
"Right. I thought maybe because I'm plant manager I could substitute-"
Jonah cuts me off.
"Alex, let me tell you something," he says. "These defini- tions, even though they may sound simple, are worded very pre- cisely. And they should be; a measurement not clearly defined is worse than useless. So I suggest you consider them carefully as a group. And remember that if you want to change one of them, you will have to change at least one of the others as well."
"Okay," I say warily.
"The next measurement is inventory," he says. "Inventory is all the money that the system has invested in purchasing things which it intends to sell."
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I write it down, but I'm wondering about it, because it's very different from the traditional definition of inventory.