The Goal

by E M Goldratt

  "You may feel you have the time now to relax," said Jonah, "but I have to catch a plane for Chicago in thirty-five minutes."

  "Oh, shit," I muttered, automatically glancing at my watch. "I guess we'd better move."

  It was not a graceful parting. Jonah and I ran out of the building, and I broke numerous speed limits-without incident- getting him to the airport.

  "I have, shall we say, a special interest in plants like yours," said Jonah. "So I'd appreciate it if you'd keep me informed of what happens."

  "Sure," I told him. "No problem. In fact, I'd planned on it."

  "Good," said Jonah. "I'll be talking to you."

  And with that he was out of the car and, with a wave, was

  sprinting through the terminal doors. I didn't get a call, so I

  suppose he made it.

  When I go to work the next morning, we have a meeting about how to implement this approach. But before we can get down to talking about it, Bob Donovan starts waving a red flag at us.

  "You know, we could be walking into a big problem," says Bob.

  "What's that?" I ask.

  "What happens if efficiencies all over the plant go down?" he asks.

  I say, "Well, I think that's a risk we'll have to take."

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  "Yeah, but it sounds like we're going to have a lot of people idle around here if we do this," says Bob .

  "Yeah, we might have some people idle from time to time," I admit.

  "So are we just supposed to let everyone stand around out there?" asks Bob.

  "Why not?" asks Stacey. "Once the somebody is already on the payroll, it doesn't cost us any more to have him be idle. Whether somebody produces parts or waits a few minutes doesn't increase our operating expense. But excess inventory... now that ties up a lot of money."

  "Okay," says Bob, "but what about the reporting system? Seems to me that at the end of the month, when old Bill Peach is ready to decide if we stay open or if we close down, he's not going to be awfully positive about us if he sees our efficiencies have taken a dive. I hear they do tend to frown upon that at headquar- ters."

  There is quiet in the room. Then Lou says, "He does have a point, Al."

  I listen to the hum of the air conditioning for a moment.

  "All right, look," I say finally. "If we don't go ahead with a system to withhold inventory and release it according to the bot- tlenecks, we'll be missing a major opportunity to improve perfor- mance and save the plant. And I'm not about to stand by and let that happen just to maintain a standard that obviously has more impact on middle management politics than it does on the bot- tom line. I say we go ahead with this. And if efficiencies drop, let them."

  After those brave words, so reminiscent of Admiral Farragut and his Damn-the-Torpedoes speech, the others are a little misty- eyed.

  "And, ah, Bob," I tell Donovan, "if there is a lot of idle time out there, don't hassle anybody-just make damn sure it doesn't show up in the efficiency reports next month, okay?"

  "Gotcha, boss."

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  27

  "... Let me say in conclusion that had it not been for the in- crease in revenue generated last month by the Bearington plant and its products, the UniWare Division's losses would have con- tinued for the seventh consecutive month. All of the other manu- facturing operations in the division reported only marginal gains in performance or sustained losses. Despite the improvement at Bearington and the fact that as a result the division recorded its first operating profit of this year, we have a long way to go before we are back on solid financial footing."

  Having said that, Ethan Frost gets the nod from Bill Peach and sits down. I'm sitting halfway down a long table where all the plant managers are gathered. On Peach's right is Hilton Smyth, who happens to be glowering at me in the aftermath of Frost's tribute to my plant. I relax in my chair and for a moment allow myself to contemplate the view through the broad plateglass win- dow, a sunny city on an early summer day.

  May has ended. Aside from the problem with the shortages of non-bottleneck parts, which have now gone away, it's been an excellent month. We're now timing the release of all materials according to a new system Ralph Nakamura developed, which is keyed to the speed of the bottlenecks. He's got a data terminal now at both of the bottlenecks, so as inventory is processed, the latest information can be fed directly into the plant data base. With the new system we're beginning to see excellent results.

  Ralph did a little experimenting with the system and soon discovered we can predict within a day, more or less, when a shipment will leave the plant. Based on this, we've been able to put together a report to marketing listing all customer orders and dates when they will be shipped. (I don't know if anybody in marketing really believes that report, but so far it's been highly accurate.)

  "Rogo," says Peach, "because you seem to be the only one among us who has improved to any degree, we'll let you start the round of reports."

  I open up the cover of my report and launch into a presenta- tion of the highlights. By almost every standard, we've had a

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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

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  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?"

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  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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  scheduled for the first week or two of July and ship them in June instead.

  But what am I going to do after that? I'm going to be putting us into a huge hole in which we have nothing else to do. We need more business.

  I wonder where Jonah is these days.

  Glancing down at the speedometer, I find to my surprise that I'm zipping along at eighty. I slow down. I loosen my tie. No sense killing myself trying to get back to the plant. It occurs to me, in fact, that by the time I get back to the plant it'll be time to go home.

  Just about then, I pass a sign saying I'm two miles from the interchange that would put me on the highway to Forest Grove. Well, why not? I haven't seen Julie or the kids in a couple of days. Since the end of school, the kids have been staying with Julie and her parents.

  I take the interchange and get off at the next exit. At a gas station on the corner, I make a call to the office. Fran answers and I tell her two things: First, pass the word to Bob, Stacey, Ralph, and Lou that the meeting went well for us. And, second, I tell her not to expect me to come in this afternoon.

  When I get to the Barnett's house, I get a nice welcome. I spend quite a while just talking to Sharon and Dave. Then Julie suggests we go for a walk together. It's a fine summer afternoon outside.

  As I'm hugging Sharon to say goodbye, she whispers in my ear, "Daddy, when are we all going to go home together?"

  "Real soon, I hope," I tell her.

  Despite the assurance I gave her, Sharon's question doesn't go away. I've been wondering the same thing myself.

  Julie and I go to the park, and after walking for awhile, we sit down on a bench by the river. We sit without saying anything for a while. She asks me if something is wrong. I tell her about Sharon's question.

  "She asks me that all the time," says Julie.

  "She does? What do you tell her?"

  Julie says, "I tell her we'll be going home real soon."

  I laugh. "That's what I said to her. Do you really mean that?"

  She's quiet for a second. Finally, she smiles at me and says

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  sincerely, "You've been a lot of fun to be around in the last few weeks."

  "Thanks. The feeling is mutual," I say.

  She takes my hand and says, "But... I'm sorry, Al. I'm still worried about coming home."

  "Why? We're getting along a lot better now," I say, "What's the problem?"

  "Look, we've had some good times for a change. And that's fine. I've really needed this time with you," she says. "But if we go back to living together, you know what's going to happen don't you? Everything will be fine for about two days. But a week from now we'll be having the same arguments. And a month later, or six months, or a year from now... well, you know what I mean."

  I sigh. "Julie, was it that bad living with me?"

  "Al, it wasn't bad ," she says. "It was just... I don't know. You weren't paying any attention to me."

  "But I was having all kinds of problems in my job. I was really in over my head for awhile. What did you expect from me?"

  "More than what I was getting," Julie says. "You know, when I was growing up, my father always came home from work at the same time. The whole family always ate together. He spent the evenings at home. With you, I never know what's going on."

  "You can't compare me to your father," I say. "He's a den- tist. After the last tooth of the day is filled, he can lock up and go home. My business isn't like that."

  "Alex, the problem is you are not like that," she says. "Other people go to work and come home at regular times."

  "Yes, you're partially right. I am not like other people," I admit. "When I get involved in something, I really get involved. And maybe that has to do with the way 7 was brought up. Look at my family-we hardly ever ate together. Somebody always had to be minding the store. It was my father's rule: the business was what fed us, so it came first. We all understood that and we all worked together."

  "So what does that prove except our families were differ- ent?" she asks. "I'm telling you about something that bothered me so much and for so long that I wasn't even sure if I loved you anymore."

  "So what makes you sure you love me now?"

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  "Do you want another fight?" she asks.

  I look the other way.

  "No, I don't want to fight," I tell her.

  I hear her sigh. Then she says, "You see? Nothing has changed... has it."

  Neither of us says a word for quite awhile. Julie gets up and walks over to the river. It looks for a second as if sh
e might run away. She doesn't. She comes back again and sits down on the bench.

  She says to me, "When I was eighteen, I had everything planned-college, a teaching degree, marriage, a house, chil- dren. In that order. All the decisions were made. I knew what china pattern I wanted. I knew the names I wanted for the kids. I knew what the house should look like and what color the rug should be. Everything was certain. And it was so important that I have it all. But now... I have it all, only it's different somehow. None of it seems to matter."

  "Julie, why does your life have to conform to this... this perfect image you have in your head?" I ask her. "Do you even know why you want the things you do?"

  "Because that's how I grew up," she says. "And what about you? Why do you have to have this big career? Why do you feel compelled to work twenty-four hours a day?"

  Silence.

  Then she says, "I'm sorry. I'm just very confused."

  "No, that's okay," I say. "It was a good question. I have no idea why I wouldn't be satisfied being a grocer, or a nine-to-five office worker."

  "Al, why don't we just try to forget all this," she suggests.

  "No, I don't think so," I tell her. "I think we should do the opposite. We ought to start asking a few more questions."

  Julie gives me a skeptical look and asks, "Like what?"

  "Like what is our marriage supposed to do for us?" I ask her. "My idea of the goal of a marriage is not living in a perfect house where everything happens according to a clock. Is that the goal for you?"

  "All I'm asking for is a little dependability from my hus- band," she says. "And what's all this about a goal? When you're married, you're just married. There is no goal."

  "Then why be married?" I ask.

  "You get married because of commitment... because of