The Goal Is To Make Money

Continuous learning leads to smarter work. Working smarter leads to making more money.

By focusing on the bottleneck, you will reach your goal faster. Only when you do something that is important to you will you work smarter and more productively.

This philosophy is best explained in the management classic The Purpose by Eliyahu M. Goldratt.

It is an absolute must-read for every entrepreneur in the manufacturing industry. Why: It helps us gain a fundamental understanding of designing productive systems.

Consider these 3 sentences from the book:

  • Productivity is the action that brings a company closer to its goal . Any action that brings a company closer to its goal is productive. Any action that does not bring a company closer to its goal is not productive. The goal is to make money.
  • You should not balance capacity with demand. What you need to do instead is balance the flow of products through the plant with market demand. (Luke: improve flow, only then add more capacity.)
  • Throughput is most important, then inventory, because of its impact on throughput, and only then, at the end, comes operating costs.

Powerful points, don’t you think?

Tomorrow I’ll also show you the 5-step process for finding process bottlenecks and applying the Theory of Constraints. This is fundamental to determining where process improvement should be applied.

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