Goldratt’s personal lesson

Goldratt’s book “The Goal” has been long on the wish list. The book is about the Theory of Constraints (ToC). Recently I bought the book and started reading it.

Essentially you asked the questions; what is the flow of money into the system, what is the flow of money out of the system, and how much is kept in the system?  These 3 measures are called Throughput, Inventory, and Operating Expense.

  • Throughput is the rate at which the system generates money through sales.
  • Inventory is all the money that the system invests in purchasing things which it intends to sell.
  • Operating expense is all the money the system spends in order to turn inventory into throughput.

I read the first 50 pages, got excited, went to www.amazon.co.uk, and found out that Critical Chain and It’s not Luck had a very low price (I always order second hand books). A few moments those books were mine.

I kept reading and then suddenly I understood what I just had done….I increased my inventory and did nothing about my throughput and operational expense.

Hmmmmm……good lesson, which cost me €20, which is actually a very cheap price to understand the Theory of Constraints.

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Impossible is nothing

Let’s start 2014 with inspiration:

“Impossible is just a big word thrown
around by small men who find it easier
to live in the world they’ve been given
than to explore the power they have
to change it. Impossible is not a fact.
It’s an opinion. Impossible is not a
declaration. It’s a dare. Impossible is
potential. Impossible is temporary.

Impossible is nothing.”

— Muhammad Ali