Operations and constraints

The Goal

Eliyahu M. Goldratt (1984)

A factory novel that teaches the Theory of Constraints: a system’s output is set by its bottleneck, so improve the constraint, not everything.

Key concepts

  • The goal of a business is to make money, measured by throughput, inventory and operating expense
  • Every system has one constraint that limits output; an hour lost at the bottleneck is an hour lost for the whole system
  • Five focusing steps: identify, exploit, subordinate, elevate, repeat
  • Local efficiencies everywhere else often make the system worse (excess inventory)
  • Drum-buffer-rope: pace the system to the constraint

How I use it

I read The Goal in 2020 and finished it in two weeks. It didn’t teach me something new so much as name what I’d been doing my whole career: finding the one constraint, then fixing it so I never have to deal with it again. A spreadsheet, a rule, a hire, a team set-up, my own finances: the question is always the same.

The clearest case for me was at Babylon. My analytics team had become the bottleneck: every question in the business queued up behind us. The fix wasn’t more analysts. It was a stack that let people serve themselves, and then teaching them to work with us as collaborators instead of as clients. Once that constraint went, the whole system sped up.

Connected books