Isn't It Obvious?

Eli Goldratt book about retail - ISBN:0884271943 ASIN:B00408ALES

Chapter 11

That is the missing element—the plus in not changing.”

I should have paid more attention to the fact that judging a suggested change has not one, not two, but four, very different aspects

Chapter 24

The point is that people consider both the pluses and minuses of the change and of not changing, and weigh the risks involved in each of the four elements involved in the change.

if you had started this conversation by announcing a bonus plan for our vendors, I would have thought you were out of your mind. But now that you have shown me the cause and effect links which led you to this understanding, I must say it’s quite ingenious.”

Chapter 26 - The 5 Focusing Steps for Retail

Due to the production plant setting in “The Goal”, 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. This erroneous perception blocks the proper identification of the constraint in most non-production environments.

Step 1 - Identify the system’s constraint

The constraint of retail is: the number of people that enter the shop.

Step 2- Decide how to exploit the system’s constraint

retail is almost blind to the dominant factor that demolishes all other efforts to improve exploitation of the 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

Step 3 - Subordinate everything else to the above decisions

the overwhelming desire to save cost in purchasing and in transportation leads to large batches that cause ten times bigger damages to throughput downstream

Step 4 - Elevate the system’s constraint

Reducing shortages increases customer satisfaction and considerably decreases customers’ dissatisfaction. Reducing surpluses enables much better display and a jump in product portfolio. The much faster replenishment enables adjusting the product mix to the actual taste of the local clientele

Step 5 - Warning! If in the previous steps a constraint has been broken go back to step 1.

This is the most difficult step for production-based environments.

This complexity does not exist for retail-based environments

This makes retail into one of the safest and easiest environments for major improvements in performance.

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