Click here for a pdf of the full interview, part 1

This is part one of SCDigest editor Dan Gilmore’s interview with Dr. Eli Goldratt, father of the Theory of Constraints, and author of “The Goal” and several other influential books on business and supply chain topics. “The Goal,” first published in 1984, is a novel that tells the tale of plant manager Alex Rogo, whose factory is a disaster and on the verge of being shut. With the help of a Goldratt-like consultant named Jonah, he turns things around by focusing on eliminating a series of bottlenecks (constraints) that are barriers to efficiency and service.

Gilmore: What are the key concepts behind the Theory of Constraints?

Goldratt: There are two pillars to the Theory of Constraints. One is the starting assumption of all the hard sciences, which is that in all real-life systems there is inherent simplicity. If you can just find that inherent simplicity, you can manage, control and improve the system.

The other pillar is “that people are not stupid.”

Dr. Eli Goldratt

Gilmore: (after a pause): I was waiting for some further explanation of that second point (laughter).

Goldratt:  Have you ever heard the concept “people resist change?” And that the bigger the change, the more the resistance? Doesn’t this in essence say that people are stupid?

Let’s do a “for instance.” If someone comes up and suggests a change that is good for you, do you automatically resist it?

So, if I say you will resist the change just because it is change, I am actually saying you are not very bright. People certainly do, however, resist change that they have a reason to believe will hurt them.

Gilmore: Yes, or they lack enough information to know.

Goldratt:  No – they believe the change is likely to hurt them.

Sometimes they are wrong because of a lack of information, but usually they are right!

Most changes might be right for the company, but are not right for the majority of people from whom they are asking for collaboration. So no wonder there is a lot of resistance.

Gilmore: There is a certain logic there, no question.

Goldratt: Because of that, it means the emphasis of change must be on win-win-win for all of the parties which you need to collaborate.

Gilmore: Well, that sounds great in theory, but for example if you have to do a restructuring…

Goldratt: What you are saying is that you don’t think it’s feasible, and what I have tried to demonstrate in my books and hundreds of projects is that it is always possible – always!

Let’s take your restructuring example, where a lot of people will get hurt. This means the solution is wrong! There must be a better way that will get you what you want, but will be a win-win.

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Article key words: Theory of Constraints, supply chain strategy, supply chain excellence