Elle

The Sandle vs. The Work Boot

92 posts in this topic

Rose, I only agree to "win-win" stiuations as that is what capitalism is about, mutual benefit to both parties.

An example from my own company might help to concretize how I build long term relationships. I am sure most of you know through my writings that the workouts that I put my clients though are extremly intense, short and efficient as they take less than 15 minutes. Although the actual workout takes less than 15 minutes I still schedule 30 minutes with each client. I use the extra 15 minutes for many positive reasons. One of those reasons is that the client physically needs the time to recuperate before leaving my office. I allow them to sit or lie down, which ever one they prefer, while recuperating. While they are recuperating I answer any of the questions that they might have, as my ideas are radical and totally new for most people. I give them a bottle of water (which I do not charge them for), if they desire, while I walk them out to their vehicle. And, while I walk them out to their vehicle it allows even more question time.

I could easily get four people through my workouts within an hour but I choose not to because it does not work out to either one of our benefits. The reason it does not workout for me is because for the 15 minutes that they are working out I do not talk to them as it distracts from their concentration and progress. Another reason is because I need the time afterwards to explain my ideas to them, so that they can understand all the fundamentals that they need to apply. One of the reasons the extra 15 minutes works out in my benefit is that once I convince these people that my ideas work, either through reason or their physical changes they refer more clients to me, they become my best ads.

The 30 minutes works in the benefit of my clients for some of the sames reasons I mentioned earlier along with others. Some of those others include the fact that they are not always on time and the extra time still allows them to get in a workout although they might not be able to ask questions that session. The free water brings to their conscious thought one of my fundamentals of losing weight which is drinking water to keep hydrated. I could go on about the benefits but I think you get the point. The point being that I do not agree to work with anyone where there is not a mutual benefit.

Why have I decided to give up the possible extra clients so that I could spend more time with my clients? I made this decision with the big picture in mind. That being what my vision was, and what it was going to take to accomplish this vision, a strategy. If I had decided to train my clients every 15 minutes I would not have been able to explain my ideas as indepth as I have. The client would not have thoroughly understood my ideas and would not have applied them in an improper manner which would have most likely led to them failing on their goals. Which means they would have never recommended all the clients that they have. I actually have one client that has directly referred over 20 people to my office.

Could I have gotten more clients in my doors and made more money short term? Yes, I think I could have made money in the short term which would have ended as soon as my clients noticed they were not making progress and then I would have went out of business. But, I decided to build a company that will be around as long as I am alive, and I am planning for much longer. But, I did not constrain myself, I decided on a path that would lead me toward my vision while utilizing all my skills in the most productive, and long term profitable manner. And none of this would have even been able to have been laid out (strategy), if I did not have a long term vision to route my decisions and then execute.

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How can you possibly accuse me of proposing a short-/long-term dichotomy when in your quote above I correct Ray on exactly that error?

By my reading you admitted to Ray that you've only recognized the importance of action which is consciously planned/directed at the short-term. So I don't know why you are objecting, unless you just don't like the words I assigned to what you already admitted to.

As for your other accusations, would you mind either providing the basis for these or retracting them?

I didn't see an accusation, so you'll have to be more specific.

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Please focus on whether the factual content of your respective positions is true or false and provide evidence of same.

Issues of personal epistemological or ethical worthiness are off-topic and, if I see so much as an inappropriate adjective, I will delete the post.

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Ray,

Which do you think is better: a road network where all lanes of all roads are always at full capacity, so that adding a single car would result in a traffic jam--or a road network where there is some excess capacity, so that additional vehicles can join the traffic without causing congestion? The former kind of system would require all roads to have the same bandwidth and all drivers to drive at the same speed--something that is as impossible as the analogous situation would be in a typical manufacturing plant or other productive organization.

If there are multiple resources involved in producing some output and their individual rates of output are non-constant, then one of them will happen to be the slowest one at any given moment. If one resource consistently tends to be the slowest one, then you have a bottleneck and it would be inefficient for the other resources to work faster than it. If the constraint keeps shifting from one resource to the other in an unpredictable way, then what Justin says is that you will benefit from increasing the capacity of all of your resources but one, so that you have a fixed constraint to make the pace, and sufficient free capacity everywhere else to accommodate the fluctuations in the output of the constraint resource.

I think the distinction you might be missing is the one between capacity and utilization. Capacity is always a good thing to have, but it is a mistake to insist on constantly utilizing 100% of the capacity of all your resources.

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By my reading you admitted to Ray that you've only recognized the importance of action which is consciously planned/directed at the short-term. So I don't know why you are objecting, unless you just don't like the words I assigned to what you already admitted to.

Not at all. My position is that, in order to get to the long-term, you must manage your current constraint. But this hardly needs to be said, in my opinion. 'Constraint' pre-supposes a goal.

As far as your accusation of "hedonism (as it would apply to business)": I guess this would have to mean 'the pursuit of short-term earnings, at the expense of longer-term earnings'. I have not suggested this. In fact, I've made it clear that you should use your goal (the long term) to determine the ideal location for the constrained resource, and then subordinate all other resources to this one.

The result, is that every action, in the short term, is subordinated to the goal.

I see no hedonism, no empirism and no deep conflict with Objectivism, as you suggested earlier.

Justin

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To everyone,

I am not saying that there will not be a part of a project, part of a company or a single individual that will not be a weak-link. What I am saying is that you set people in motion to overcome the problem once it is defined, not by constraining it, but by enhancing the specific output.

This is where the row-boat situation has no relationship to business. In business you are always trying to create a better product through constantly striving to build something better, cheaper, more efficiently. If I ran into the weak-link as a project manager my goal would be to overcome it by enhancing the product or person that was the weak-link. The nature of business is that you will constantly run into these types of problems and have to overcome them if you are going to stay in business. In real life scenarios by the time the manager figures out what was causing the slow down he should quickly be figuring out how to over come it. Whether that means training a person, firing a person, enhancing a machine or replacing a machine is up to the manager(s).

Let us use a real life scenario. If I was a seamstress with my own line of clothing that I make by sewing, of course. I start out by making high quality clothes that are affordable by most people. As the quality of my clothing line draws a lagre demand I become overloaded with orders. I decide to overcome the weak-link of my own sewing capacity by buying this new item called a sewing-machine which I have been told can raise my capacity to a new higher level. Now I am able to generate ten times(?) the amount of clothing that I could before within a smaller amount of time. Again, my clothing line begins to come under an even larger demand than before. I decide at this point to buy more sewing-machines and then hire personnel to do the sewing, after I train them of course. Because of our high quality and affordable price the demand rises again. I decide at this point that hiring more people is not the most cost effective way to proceed so I buy this new mechanical sewing maching that sews 10 times as fast as the human with their single sewing machine and it only requires one human to operate properly.

Another part of the sewing/clothing business is the packaging of the product which I first did myself, then I hired people to do and now I have mechanical baggers for the product as the personnel could not keep up with the mechanical sewing machine. I have reduced my total overhead and increased my profit by being able to constantly move forward into automation and what ever comes next. Even if I am fully automatized, there will always be ways to enhance a products output (read my example about NUCOR). Yes, there is the law of ever dimishing returns, but if I am going to stay in business I will need to create something that allows me to do more with less. And, if one studies history they will see that the people and companies that constantly push the limits are the ones that achieve the most.

Good day to you all.

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Let us use a real life scenario. If I was a seamstress with my own line of clothing that I make by sewing, of course. I start out by making high quality clothes that are affordable by most people. As the quality of my clothing line draws a lagre demand I become overloaded with orders. I decide to overcome the weak-link of my own sewing capacity by buying this new item called a sewing-machine which I have been told can raise my capacity to a new higher level. Now I am able to generate ten times(?) the amount of clothing that I could before within a smaller amount of time. Again, my clothing line begins to come under an even larger demand than before. I decide at this point to buy more sewing-machines and then hire personnel to do the sewing, after I train them of course. Because of our high quality and affordable price the demand rises again. I decide at this point that hiring more people is not the most cost effective way to proceed so I buy this new mechanical sewing maching that sews 10 times as fast as the human with their single sewing machine and it only requires one human to operate properly.

Another part of the sewing/clothing business is the packaging of the product which I first did myself, then I hired people to do and now I have mechanical baggers for the product as the personnel could not keep up with the mechanical sewing machine. I have reduced my total overhead and increased my profit by being able to constantly move forward into automation and what ever comes next. Even if I am fully automatized, there will always be ways to enhance a products output (read my example about NUCOR). Yes, there is the law of ever dimishing returns, but if I am going to stay in business I will need to create something that allows me to do more with less. And, if one studies history they will see that the people and companies that constantly push the limits are the ones that achieve the most.

You have just described what Eli Goldratt calls the Process of Continuous Improvement. You're agreeing with us! :P

Now, suppose that you have ordered your sewing machine and they say they're going to deliver it in two months. (This may be a stretch for a sewing machine, but it is quite typical to have to wait months or even years for large-scale industrial equipment.) How should you run your business during those two months ? Should you be taking orders as if you already had the machine? You clearly shouldn't; you won't be able to deliver and your customers will leave you for someone else. You should be aware that, until you get the machine, you can only make so many clothes a day, and only accept so many orders. Once you have received the sewing machine, you can forget about being so constrained, but this does not mean that you can both produce and sell an unlimited number of clothes per day. The constraint will now be elsewhere--say, your existing suppliers can only ship so much cloth per week, so you will need to look for additional suppliers, arrange transportation, etc. And while you do that, you will need to keep in mind that this is your current constraint; you shouldn't berate yourself, like a manager would berate an idle worker, for not using your sewing machine after you have run out of supplies.

The point is that eliminating constraints takes time, and during that time, you have to adjust the output of all your resources to the output of the constraint resource. And then you should identify your next constraint, adjust your output to it, and try to eliminate it ... and so on. This is how you achieve continuous improvement. I really don't think we're disagreeing, only you emphasize the improvement, while the Theory of Constraints also stresses the need to take into account the output of whatever is your current constraint.

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CF,

Who came first, great wealth creators or Eli Goldratt? I think you can come up with who I have defined my business principles from and who I agree with.

If in your scenario my machines did not come in as of yet, I would hire a company short term to do the sewing for me to fill the orders I was taking or some other scenario that allows me to overcome your scenario. In the real world if you do not fill your orders, a lot of times the company or the individual person does not come back to you. Also in the real world you would most likely have orders before you spent money on building a product that no one wants. I would not spend a large amount of my resources buying machines and making clothes that I did not at least have a good idea their was a demand for. Henry Ford did not build a lot of cars first, he built a prototype and then he tried to sell it, which he did of course.

My major disagreement with the TOC is not that their will never be challenges (which you call contraints), to be overcome. But I do not look at the challenge and say "let me constrain everthing else." I would and do say "how can I bring that up to everything else, how can I overcome." I do not and will not look at something as constraining me, which litterlly means to restrain or to prevent from doing. I look, and will always look at things as challenges to see if I have what it takes to figure out how to overcome.

Challenge is defined as; a stimulating or interesting task or problem. Constraint is defined as; restraining or to prevent from doing. What is your "Metaphysical Value Judgement" of reality? Is it going to be that that world stinks and it is always throwing these constraints in front of me? Or, is it going to be that life is good and full of challenges for me to accept and overcome?

Your Eli Goldratt has not created anything new. Capitalist have been creating wealth for years by applying business principles to their concrete challenges. All I see is a theory that has taken one idea out of context and tried to elevate it to the extreme principle of business, which it is not. Companies are faced with challenges everday and the ones that can overcome them move forward, and the ones that can overcome where others were stopped are the ones that reach greatness.

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Who came first, great wealth creators or Eli Goldratt?

I would believe that Eli Goldratt's principles have helped a great many businesses increase their profits, so I would count him among the great wealth creators. But, as Betsy said, we should focus on the factual content of our respective positions, so I don't think we should start a sub-discussion on this.

Challenge is defined as; a stimulating or interesting task or problem. Constraint is defined as; restraining or to prevent from doing.

The two are nearly synonymous, aren't they? When you face a constraint, you have a problem, which gives you the task of solving it. Since solving it will improve your life, you will certainly be very interested in doing so, and stimulated by the prospect of improvement. Of course, "challenge" emphasizes the interest/stimulation aspect, while "constraint" merely states the fact of there being a limitation. This distinction might be of interest psychologically, but as for the scientific modeling of the operation of a productive enterprise, it does not make a difference.

But let's use the word "challenge" if you prefer. Now, if you face a challenge, then what you ought to do is think of ways of overcoming it. Do we agree so far? I'm pretty sure we do.

The next step in the logical chain is: It always takes some time to overcome a challenge. In some cases, it may be a nanosecond; in other cases, it will be weeks or months. While a rational person will try to overcome the challenge as soon as he can, the exact time it takes will depend on the nature of the concrete circumstances he faces. Do you agree with this as well?

I'll wait for you to state your agreement or disagreement with what I've written so far and continue from there.

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CF,

Please stop changing my question or discarding it to fit you answer. I specifically asked, in response to your question, who came first and who's principles do you think I agree with.

Challenge and constraint are not nearly the same. A constraint precludes that something is unobtainable or impossible. As a matter of fact the word preclude is defined as; impossible, to bar, to prevent. And let us not forget the definition of constraint; to restrain or prevent from doing. I would say that constrain and preclude are more similar or synonymus than challenge and constrain.

My genetic makeup constrains or precludes me from ever reaching the muscle mass levels of Arnold. But, I can challenge myself to obtain the best within my genectic makeup. If you state that something constrains you then you are done, there is no more action left to you as you have just precluded that it is unobtainable. You cannot say that something is impossible to overcome and then go and design ways around the constraint.

Lastly, you and others have missed one of my major points. That point being that no matter what you call the theory it is only one part of the whole that is needed to have a proper set of business principles which are supposedly going to appear out of the TOC. The TOC cannot tell a business owner anything until he or she knows what they want or need to accomplish within a certain context. And, that context comes from an integrated vision of what they want to achieve long term and then integrate every mid-term and short-term goal all the way back to today without contradictions. Unless you can grasp the full picture you will not know what short term solutions will produce you long term benefits. But, I am only re-writing what I have already written before that is not of interest, so I will stop.

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You might read my post and see that I already understood principles of business long before I ever heard of TOC.

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You might read my post and see that I already understood principles of business long before I ever heard of TOC.

I just thought of it, but of course you might disagree and think that I do not understand business priniciples at all.

I will end my discussion on this thread with a quote from one of my heros in business Ken Iverson.

"Many managers, I've found, struggle to accept the simplicity of Nucor.... But the truth is, simplicity is waht makes Nucor succesful. At least it is a big part of it... Mainly, we try to keep our focus on what really matters-bottom line performance and long-term survival. That's what we want our people thinking about."

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Ray

It's interesting that you invoke Heny Ford as an example of a great wealth creator (which, indeed he was). Ford's most notable innovation was the application of the production line to the assembly of automobiles.

Now ask youself: what is the benefit of the assembly line? There are two benefits. The first is that the assembly line increases the productivity of workers (the work comes to them, instead of the other way around). But the greatest benefit is that the assembly line synchronises the plant (and Ford acknowledged this benefit explicity).

Now what does 'syncronising the plant' mean in practice?

What it means is that the assembly line forces every worker to work at the same speed as the slowest resource. Just-in-time does exactly the same thing.

The problem here is that if you attempt to argue with the basic principles that underpin TOC your position is at odds with Henry Ford, Taiichi Ono (Toyota) and other great capitalists who you no doubt admire.

Your Eli Goldratt has not created anything new.

Actually, Ray, that is entirely untrue, and demonstrably so.

Continuing from the previous point, if you think of an assembly line as a (mechanical) scheduling algorithm, and just-in-time as another, Goldratt has invented at least three radical new scheduling algorithms, one for production, one for project environments and one for logistics.

What's more, Goldratt has invented a method for designing 'algorithms' for other business processes -- which is what we have used to develop our ground-breaking approach to scheduling the sales function.

He has also invented a new approach to management accounting that addresses many of the oft-quoted short-commings of cost accounting.

To claim that Goldratt has invented nothing new is to exhibit a complete disregard for reality.

Perhaps you should rejoin this thread after you have researched your subject matter.

Justin

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Your Eli Goldratt has not created anything new.

Actually, Ray, that is entirely untrue, and demonstrably so.

Continuing from the previous point, if you think of an assembly line as a (mechanical) scheduling algorithm, and just-in-time as another, Goldratt has invented at least three radical new scheduling algorithms, one for production, one for project environments and one for logistics.

What's more, Goldratt has invented a method for designing 'algorithms' for other business processes -- which is what we have used to develop our ground-breaking approach to scheduling the sales function.

He has also invented a new approach to management accounting that addresses many of the oft-quoted short-commings of cost accounting.

To claim that Goldratt has invented nothing new is to exhibit a complete disregard for reality.

Perhaps you should rejoin this thread after you have researched your subject matter.

Justin

Justin,

The context of my words that you have quoted were meant in the realm of business principles. I also have not denied that people or machinery must work in concert with each other as I also agree that they must. But, you have also failed to recognize and discuss that all this is only a part of the whole that must also be integrated to allow a company to survive long term.

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Justin,

I have spent over an hour reading through a large amount (I can usually read 3 books in a week, so when I write a large amount, I mean it), of the "subject matter". And at this time I still do not see any new prinicples. A lot of the things that are listed on this website; http://www.goldratt.com/index.html are things that a good businessperson should always be striving to do and have been around for years. Although that does not mean that they have been applied for years as they probably have not.

I also did a good amount of reading on some of the research that has been done on TOC on this part of the website; http://www.goldratt.com/abstracts.htm#guide and I guess I should not be surprised that a lot of these papers were just computer simulations. I think I will keep doing my own research into real companies while searching for the traits that these companies applied to their own concrete problems to overcome business challenges.

Finally, I will end with another quote from Ken Iverson;

"We haven't had much luck with the MBAs we've hired out of the top business schools. They've come to us, degree in hand, saying: "I'm ready to conquer the world." So we hired them and found they couldn't conquer the basics of managing a department.

Oh, they're smart enough. They're very good at finance and accounting. They can cite management theories, spout business buzzwords, and diagram models for every occasion. But they have a terrible time talking with an employee who is operating a machine. They just don't know how to relate to and lead people. They lack the bacis communications skills." Ken Iverson, Plain Talk Lessons From a Business Maverick, Wiley, 1998, pp. 185 and 186.

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I thought I might add another example of a sales procedure change I made at Progressive Exercise that turned into a large increase in profits. For this procedure change I used my now favorite two questions that I use everytime I come to something I do not understand or want to make better. I think people at TOC would call it an algorithm but I have always called it a procedure for overcoming challenges/problems. I got these two questions from, who else, Ayn Rand. The two questions I now ask myself are;

1. What is the nature of that which I want to do?

2. What is the nature of that which I want to do it with?

I have found that when I can answer these two questions, I can make changes that enhance or give me further understanding of that which I want to do.

After a while of being in business I was doing well but not nearly what I had projected was attainable. Of course I was always serching for a way to increase my client base and marketing in a tradional way proved to be wasteful. I came to this conclusion through constantly questioning every dime that I spent on advertising and it's returns along with questioning my clients. And although this questioning was giving me insight, it was another item that really changed my client base.

I have read many, many books on all sorts of different aspects of business and how making this "one change" will take a company to the top. And just like most psychology books that I have read, I would discard most of the information as useless. So it is somewhat funny that I got the idea for a sales tactic change from a book that is not really about business or sales at all. The book was A Treatise on Political Economy by Jean-Baptiste Say which I think is a great work for many reasons. In the book Jean-Baptiste Say generally states that every person must pick, choose and buy their own values and no one else can do this for them, his emphasis primarily being in business and political economics. Ayn Rand had of course stated this also in her many writings on ethics and other areas. The two of these authors ideas looked at through my perspective and problem allowed me to make changes to my sales tactics.

The first thing I changed is that I stopped talking to people about my theories and how I came to these conclusions and other items that were not of interest to the possible client. I instead decided to make my first question to the possible client what was of importance to them, what value were they after? By listening to what values the possible client was after and then demonstrating how Progressive Exercise could facilitate the obtainment of their values I talked them into staying. Not only did I sell more long term packages, but my client base nearly tripled in a short 6 months.

Even though I have shown how changing one little area produced a larger client base, this alone was still not enough and only a short term gain. If I had not produced the value that I stated they could obtain all those clients would have quit and bad mouthed me and my business. I had to integrate the ideas along with all the others that I had toward a long term goal which means making this change part of an integrated whole.

Some of you might say that I am just a one man operation and my example does not relate to large companies. I disagree, a business priniciple is a business prinicple and it applies no matter the scope or size of the business.

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