Isn't It Obvious? Revised Edition

by Eliyahu M. Goldratt

chains should not hold the inventories at the worst forecast level;

use the flexibility provided by the relatively short replenishment time to direct the merchandise to where reality is showing it is needed.”

“Many different SKUs are produced from the same dyed fabric. On average, about ten different SKUs are made from the same fabric.”

hold the inventories at the most accurate forecast point; at the dyed fabric stage.

“If I demand penalties there’s no chance I can persuade them to work with us in the new way.”

treasure waiting at the top of the mountain

pain entailed in climbing the mountain.

plus and minus effects of no...

crocodile that will snip off your toes if yo...

mermaid they could lose if they try ...

Let’s enlarge their pot of gold rather than increase their pain by asking for penalties. Let’s give them bonuses for meeting the preset schedules, and that way protect our interest.”

“Their bonus should be in proportion to our inventory turns on their products.”

to be entitled to the bonus, their due date performance can’t drop below ninety-five percent for the previous three months.

Real business smarts means capitalizing on your competitive edge while it lasts.”

These individuals measure themselves according to the inherent potential of the situation they are in.”

mezzanine finance?”

you always have to think bigger, better, that more can be done, even when you’re at the top, even if it seems almost unthinkable at the time.

many TOC followers still equate a constraint with a bottleneck—a resource that’s capacity is the limiting factor of the system’s ability to generate more throughput.

Identify the system’s constraint.

Decide how to exploit the system’s constraint.

retail is blind to the magnitude and impact of shortages

they are also not fully aware of the devastating impact that surpluses have on proper exploitation—on the indirect impact surpluses have due to cash and space being restricted

Subordinate everything else to the ab...

Retail, like production, is spell-bound by local optima that drives the supply chain to be efficient rather than effective.

In production it manifests itself in the push to produce ahead of time, in retail it manifests itself in the push of merchandize downstream (see Ch. 18 and Ch 23). And this mentality of seeking local optima opens both environments to be dominated by cost mentality. Rather than guiding the supply chain to operate in a way that will minimize shortages and surpluses, the overwhelming desire to save cost in purchasing and in transportation leads to large batches that cause ten times bigger damages to throughput downstream (contrast

Elevate the system’s constraint.

Warning!

constraint of retail always stays ‘the number of people who enter the shop’.