Gilmore: That would be great, if it is true.

Goldratt: Have you read any of my books?

Gilmore: Just “The Goal”

Goldratt: Did what was said in that book seem true, even simple? Common sense?

Gilmore: Yes…

Goldratt: Do you want a bigger proof that it is possible? Let’s say there is a manufacturing plant, where everything is against it. It’s on the verge of collapse, it looks impossible to do anything in the time of three months, which is all the time there is to fix it.

Nevertheless, it is so possible, providing you find the simplicity, and be careful to look for win-win solutions.

The problem is that the win-win solution is usually blocked by erroneous assumptions, and that’s why it’s hard to find it. But when you find it, it’s obvious, because your own reaction and that of everyone else is “Isn’t that obvious. Why didn’t we see it before?”

Gilmore: I’d still like a more concrete example…

Goldratt: “The Goal” is an example, my other books are examples, because each one of them are based on things that really happened.

The real-life validation we have had from the books and our own consulting is huge. One time a top executive from a U.S. company wrote me and said, “Dr. Goldratt, your book is no longer a novel any more, it is a documentary! Because I’ve done what you propose in the books, and I’ve achieved all the results. The only difference between what’s in “The Goal” and our story is that my wife didn’t come back yet!” [The main character in the novel, Alex Rogo, also has some marital issues.]

Everyone who attempts it achieves the results. Every one. It’s amazing.

Gilmore: “The Goal” is really plant/manufacturing focused, and many people associate the Theory of Constraints as dealing largely with production issues. How do we tie this all together, both the factory and the larger company issues and opportunities?

Goldratt: Bottlenecks are just a prime example of inherent simplicity. If you are looking at a system, what makes it complex is that if you are touching one place, it has a ramification in other places.

In other words, it is the cause and effect relationships that make it seem so complicated. This means that if you realize that the fewer the number of points you have to touch to impact the whole system, it actually has fewer degrees of freedom.

The more complex the system is, the less the degrees of freedom, which means that if you can find the few elements that if you touch them then they impact the whole system, you’ve found the key elements of the system.

Since they control the entire system, they are the constraints of the system, and therefore also the levers. If you can figure out what they key constraints of the system are, and what are the cause and effect relationships between these constraints and the rest of the system, now you have the key!

However, what you have to be able to do in order to successfully change the system is to look to the other pillar and recognize that only a win-win solution can be implemented. And in terms of all the options that exist, there is always at least one win-win solution. The key is described in my second book, which in most places is called “The Goal II.” Now, Alex isn’t a plant manager but a vice president, involved not just in production but supply chain, marketing, sales, etc. Still, the same concepts are demonstrated. How do you find the controlling factors, and create win-win? How do you unearth the false assumptions that lead you to believe that the only way out is a compromise, which means someone will lose?

Then, usually there is so much resistance that even if you can implement what you intended, it will be so diluted that most of the results will be lost.

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