I stop and look at him. “What are we asking for? For the ability to answer three simple questions: ‘what to change?’, ‘what to change to?’, and ‘how to cause the change?’ Basically what we are asking for is the most fundamental abilities one would expect from a manager. Think about it. If a manager doesn’t know how to answer those three questions,

IDENTIFY the system’s constraint(s). 2. Decide how to EXPLOIT the system’s constraint(s). 3. SUBORDINATE everything else to the above decision. 4. ELEVATE the system’s constraint(s). 5. WARNING!!!! If in the previous steps a constraint has been broken, go back to step 1, but do not allow INERTIA to cause a system’s constraint.

STEP 1. Identify the system’s bottlenecks. (After all it wasn’t too difficult to identify the oven and the NCX10 as the bottlenecks of the plant.) STEP 2. Decide how to exploit the bottlenecks. (That was fun. Realizing that those machines should not take a lunch break, etc.) STEP 3. Subordinate everything else to the above decision. (Making sure th

“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 differen

With a smile he says, “This is trivial. If the goal of our company 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?”

“And the implication of these rules is that we must not seek to optimize every resource in the system,” says Jonah. “A system of local optimums is not an optimum system at all; it is a very inefficient system.”

“The numbers are wrong, not because you have made a calculating error, but because the costs were determined as if these work centers existed in isolation,” says Jonah. “Let me explain: when I was a physicist, people would come to me from time to time with problems in mathematics they couldn’t solve. They wanted me to check their numbers for them.

“A bottleneck,” Jonah continues, “is any resource whose capacity is equal to or less than the demand placed upon it. And a non-bottleneck is any resource whose capacity is greater than the demand placed on it. Got that?”

“Throughput is the money coming in. Inventory is the money currently inside the system. And operational expense is the money we have to pay out to make throughput happen. One measurement for the incoming money, one for the money still stuck inside, and one for the money going out.”