by E M Goldratt
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"Very nice, but as I suspected it's nothing more than child's play. What are the practical implications?" Down-to-earth Bob.
"There were practical ramifications," Ralph answers. "You see, when Mendeleev constructed his table, not all the elements were already found. This caused some holes in his table that he reacted to by 'inventing' the appropriate missing elements. His classification gave him the ability to predict their weight and other properties. You must agree that's a real achievement."
"How was it accepted by the other scientists of his time?" I ask, curious. "Inventing new elements must have been received with some skepticism."
"Skepticism is an understatement. Mendeleev became the laughing stock of the entire community. Especially when his table was not as neatly arranged as I described it to you. Hydrogen was floating there above the table, not actually in any column, and some rows didn't have one element in their seventh column, but a hodgepodge of several elements crowded into one spot."
"So what happened at the end?" Stacey impatiently asks. "Did his predictions come true?"
"Yes," says Ralph, "and with surprising accuracy. It took some years, but while he was still alive all the elements that Mendeleev predicted were found. The last of the elements that he 'invented' was found sixteen years later. He had predicted it would be a dark gray metal. It was. He predicted that its atomic weight would be about 72; in reality it was 72.32. Its specific gravity he thought would be about 5.5, and it was 5.47."
"I bet nobody laughed at him then."
"Certainly not. The attitude switched to admiration and his periodic table is regarded by students of chemistry today as basic as the ten commandments."
"I'm still not impressed," my stubborn replacement says.
I feel obliged to remark, "The biggest benefit was probably the fact that due to Mendeleev's table people didn't have to waste time looking for more elements." And turning to Bob I say "You see, the classification helped in determining, once and for all, how many elements do exist. Putting any new element in the table would have upset the clear order."
Ralph coughs in embarrassment, "Sorry Alex but that's not the case. Only ten years after the table was fully accepted, several new elements were discovered, the noble gases. It turned out that
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the table should have been constructed to have eight columns, not seven."
"Just as I've said," Bob jumps in a triumphant voice. "Even when it works you still can't trust it."
"Calm down, Bob. You must admit that Ralph's story has a lot of merit for us. I suggest that we ask ourselves what's the difference between Mendeleev's classification of the chemical ele- ments and our many attempts to arrange the colored shapes in order? Why was his so powerful and ours so arbitrary?"
"That's just it," says Ralph, "Ours were arbitrary, and his was..."
"Was what? Not arbitrary?" Lou completes his sentence.
"Forget it." Ralph agrees. "That's not a serious answer. I'm just playing with words."
"What exactly do we mean by arbitrary, and not arbitrary?" I raise the question.
Since nobody answers I continue, "Actually, what are we looking for? We're looking to arrange the facts in some order. What type of order are we seeking? An arbitrary order that we superimpose externally on the facts, or are we trying to reveal an intrinsic order, an order that already exists there?"
"You're absolutely right," Ralph is getting excited, "Mende- leev definitely revealed an intrinsic order. He didn't reveal the reason for that order, that had to wait for another fifty years, when the internal structure of the atoms was found, but he defi- nitely revealed the intrinsic order. That's why his classification was so powerful. Any other classification that just tries to super- impose some order, any order, on the given facts is useful in only one sense-it gives the ability to present the facts in a sequence, tables, or graphs. In other words, helpful in preparing useless, thick reports.
"You see," he continues enthusiastically, "we, in our attempts to arrange the colored shapes, didn't reveal any intrinsic order. Simply because in that arbitrary collection there was no intrinsic order to be revealed. That's why all our attempts were arbitrary, all futile to the same extent."
"Yes, Ralph," Lou says in a cold tone, "But that doesn't mean that in other cases, where intrinsic order does exist, like in man- aging a division, we can't fool ourselves in the same way. We can always procrastinate by wasting our time playing with some artifi- cial, external order. Let's face it, what do you think Alex and I
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would have done with the pile of facts that we suggested he gather. Judging by what we've done for so long here in the plant, probably just that-playing a lot of games with numbers and words. The question is what are we going to do differently now? Anybody got an answer?"
Looking at Ralph sunk in his chair I say, "If we could reveal the intrinsic order of the events in the division, that would cer- tainly be of tremendous help."
"Yes," Lou says, "But how does one go about revealing the intrinsic order?"
"How can one identify an intrinsic order even when he stum- bles on it?" Bob adds.
After a while Lou says, "Probably in order to answer this question we should ask a more basic one: What provides the in- trinsic order among various facts? Looking at the elements that Mendeleev had to deal with, they all seemed different. Some were metals and some gases, some yellow and some black, no two were identical. Yes, there were some that exhibited similarities, but that's also the case for the arbitrary shapes that Alex drew on the board."
They continue to argue but I'm not listening any more. I'm stuck on Lou's question, "How does one go about revealing the intrinsic order?" He asked it as if it were a rhetorical question, as if the obvious answer is that it is impossible. But scientists do reveal the intrinsic order of things... and Jonah is a scientist.
"Suppose that it is possible," I break into the conversation, "suppose that a technique to reveal the intrinsic order does exist? Wouldn't such a technique be a powerful management tool?"
"Without a doubt," says Lou. "But what's the point in day- dreaming?"
"And what happened to you today?" I ask Julie, after I've told her the day's events in detail.
"I spent some time in the library. Do you know that Socrates didn't write anything? Socrates' dialogues actually were written by his pupil, Plato. The librarian here is a very pleasant woman, I like her a lot. Anyhow, she recommended some of the dialogues and I've started to read them."
I can't hold my surprise, "You read philosophy! What for, isn't it boring?"
She grins at me, "You were talking about the Socratic
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method as a method to persuade other people. I wouldn't touch philosophy with a ten foot pole, but to learn a method to per- suade my stubborn husband and kids-for that I'm willing to sweat."
"So you started to read philosophy," I'm still trying to digest it.
"You make it sound like a punishment," she laughs. "Alex, did you ever read the dialogues of Socrates?"
"No."
"They're not too bad. They're actually written like stories. They're quite interesting."
"How many have you read so far?" I ask,
"I'm still slaving on the first one, Protagoras."
"It'll be interesting to hear your opinion tomorrow." I say skeptically. "If it's still positive, maybe I'll read it, too."
"Yeah, when pigs fly," she says. Before I can answer, she stands up, "Let's hit the sack."
I yawn and join her. ^
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36
We're getting started a little late since Stacey and Bob have to deal with some problematic orders. I wonder what's really hap- pening; are we drifting back into trouble? Is Stacey's warning about her Capacity Constraint Resources starting to materialize? She was concerned about any increase in sales and, for sure, sales are slowly but constantly on the rise. I dismiss these thoughts; it's just the natural friction that should be expected wh
en your mate- rial manager moves her responsibilities to her replacement. I de- cided not to interfere; if it evolves into something serious they won't hesitate to tell me.
This is not going to be easy. We all are action-oriented and searching for basic procedures is almost against our nature, no matter how much Bob tells me that he's been transformed.
So when, at last, they all take seats I remind them about the issue on the table. If we want the same movement that we've succeeded in starting here to happen in the entire division, we have to clarify for ourselves what we actually have done-in a generic sense. Repeating the specific actions won't work. Not only are the plants very different from each other; how can one fight local efficiencies in sales, or cut batches in product design?
Stacey is the only one who has something to offer and her idea is simple. If Jonah forced us to start by asking, 'what is the goal of the company', Stacey suggests that we start by asking, 'what is our goal'-not as individuals, but as managers.
We don't like it. It's too theoretical. Bob yawns, looks bored. Lou responds to my unspoken request and volunteers to play the game.
With a smile he says, "This is trivial. If the goal of our com- pany is 'to make more money now as well as in the future,' then our job is to try and move our division to achieve that goal."
"Can you do it?" Stacey asks. "If the goal includes the word 'more', can we achieve the goal?"
"I see what you mean," Lou responds, still smiling. "No, of course we can't achieve a goal that is open-ended. What we'll have to do is to try and move the division toward that goal. And you are right, Stacey, it's not a one-shot effort, we have to con-
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stantly strive toward it. Let me rephrase my initial answer." And in his punctuating voice, emphasizing each word, he concludes, "A good job will be to start our division on a process of on-going improvement."
Turning to me, Stacey says, "You asked for an idea of how to tackle the subject? I think that we should proceed from here."
"How?" Donovan echoes the question that everybody is thinking.
"I don't know," is Stacey's answer. When she sees Bob's ex- pression she says defensively, "I didn't claim to have a break- through, just an idea."
"Thank you Stacey," I say, and turning to the rest I point to the white board that nobody has bothered to erase yet. "We must admit that it is a different angle from the one we had so far."
We are stuck. Donovan's question is certainly in place. So I try to gain some momentum by cleaning the board and writing in big letters "A process of on-going improvement."
It doesn't help much. We sit in silence for a while staring at the board.
"Comments?" I ask at last. And, as expected, it's Bob who voices everybody's feeling.
"I'm sick and tired of these big words. Everywhere I go, I hear the same thing." He stands up, goes to the board, and mim- icking a first grade teacher he intones "A process... of... on-going... improvement."
Sitting back down he adds, "Even if I wanted to forget it I can't. Hilton Smyth's memos are all spotted with this phrase. By the way Alex, these memos keep on coming, and more often than before. In the name of savings, at least saving paper, can't you do something to stop it?"
"In due time. But let's keep at it. If nothing comes out of these discussions, then the only useful thing that I will be able to do as the division manager will be to stop some memos. Come on Bob, spit out your frustrations."
It doesn't take much to encourage Bob to voice his true opin- ion. "Every plant in our company, has already launched at least four or five of those pain-in-the-neck improvement projects. If you ask me, they lead only to indigestion problems. You go down there, to the floor, and mention a new improvement project and you'll see the response. People have already developed allergies to the phrase."
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"So, what are you suggesting should be done?" I pour some more fuel on his flames.
"To do what we have done here," he roars back. "We, here, have not done any of these. We have not launched even one formal improvement project. But look at what we have achieved. No talks, no big words, but if you ask me, what we've achieved here is the real thing."
"You're right," I try to calm the volcano that I have awak- ened. "But Bob, if we want to do the same in the entire division we must pinpoint what exactly the difference is between what we have done and what everyone else has tried to do."
"We haven't launched so many improvement projects," he says.
"That is not accurate," Stacey responds. "We have taken many initiatives: in shop floor procedures, in measurements, in quality, in local processes, not to mention the changes that we have made in the way we release material to production." Raising her hand to stop Bob from interrupting, she concludes: "True, we didn't call them improvement projects, but I don't believe the crucial difference is that we didn't bother to title them."
"So why do you think we have succeeded where so many have failed?" I ask her.
"Simple," Bob jumps in. "They talked, we did."
"Who is playing with words now," I shut him off.
"I think that the key," Stacey says in a thoughtful tone, "is in the different way we interpreted the word 'improvement'."
"What do you mean?" I ask her.
"She is absolutely right!" Lou beams. "It's all a matter of measurements."
"For an accountant," Bob speaks to the room, "Everything is a matter of measurements."
Lou stands up and starts to pace the room. I rarely see him so excited.
We wait.
At last he turns to the board and writes:
THROUGHPUT INVENTORY OPERATING EXPENSE
Then he turns back to us and says, "Everywhere, improve- ment was interpreted as almost synonymous to cost savings. Peo-
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pie are concentrating on reducing operating expenses as if it's the most important measurement."
"Not even that," Bob interrupts. "We were busy reducing costs that didn't have any impact on reducing operating ex- penses."
"Correct," Lou continues. "But the important thing is that we, in our plant, have switched to regard throughput as the most important measurement. Improvement for us is not so much to reduce costs but to increase throughput."
"You are right," Stacey agrees. "The entire bottleneck con- cept is not geared to decrease operating expense, it's focused on increasing throughput."
"What you are telling us," I say slowly, trying to digest it, "is that we have switched the scale of importance."
"That's precisely what it is," Lou says. "In the past, cost was the most important, throughput was second, and inventory was a remote third." Smiling at me he adds, "To the extent that we regarded it as assets. Our new scale is different. Throughput is most important, then inventory-due to its impact on throughput and only then, at the tail, comes operating expenses. And our numbers certainly confirm it," Lou provides the evi- dence. "Throughput and inventory had changed by several tens of percent while operating expenses went down by less than two percent."
"This is a very important lesson," I say. "What you claim is that we have moved from the 'cost world' into the 'throughput world'."
After a minute of silence I continue, "You know what, it re- ally highlights another problem. Changing the measurements' scale of importance, moving from one world into another, is with- out a doubt a culture change. Let's face it, that is exactly what we had to go through, a culture change. But how are we going to take the division through such a change?"
I go to pour myself another cup of coffee. Bob joins me. "You know, Alex, something is still missing. I have the feeling that the entire approach we took was different."
"In what way?" I ask.
"I don't know. But one thing I can tell you, we haven't de- clared any improvement project, they grow from the need. Some- how it was always obvious what the next step should be."
"I guess so."
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We spend good time. We bring up the actions we took and verify that
each one actually has been guided by our new scale. Bob is very quiet until he jumps to his feet.
"I nailed the bastard!" he shouts, "I have it!"
He goes to the board, grabs a marker and put a heavy circle around the word 'improvement.' "Process of on-going improve- ment," he booms. "Lou and his fixation on measurements forced us to concentrate on the last word. Don't you realize that the real sneaky SOB is the first one?" and he draws several circles around the word 'process.'
"If Lou has a fixation about measurements," I say somewhat irritated, "then you certainly have a fixation about processes. Let's hope your fixation will turn up to be as useful as his."
"Sure thing, boss. I knew that the way we handled it was different. That it wasn't just a matter of scales."
He returned to his seat still beaming.
"Do you care to elaborate?" Stacey inquires in a soft voice.
"You haven't got it?" Bob is surprised.
"Neither did we." We all looked perplexed.
He looks around and when he realizes that we are serious he asks, "What is a process? We all know. It's a sequence of steps to be followed. Correct?"
"Yes..."
"So, will anybody tell me what the process is that we should follow? What is the process mentioned in our 'process of on-go- ing improvement'? Do you think that launching several improve- ment projects is a process? We haven't done that, we have fol- lowed a process. That's what we have done."
"He's right," says Ralph in his quiet voice.
I stand up and shake Bob's hand. Everybody is smiling at him.
Then Lou asks, "What process have we followed?"
Bob doesn't hurry to answer. At last he says, "I don't know, but we definitely followed a process."
To save embarrassment I hurriedly say, "Let's find it. If we followed it, it shouldn't be too difficult to find. Let's think, what is the first thing we did?"