The Goal: A Process of Ongoing Improvement, Third Revised Edition
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". . . Let me say in conclusion that had it not been for the in-
crease in revenue generated last month by the Bearington plant
and its products, the UniWare Division's losses would have con-
tinued for the seventh consecutive month. All of the other manu-
facturing operations in the division reported only marginal gains
in performance or sustained losses. Despite the improvement at
Bearington and the fact that as a result the division recorded its
first operating profit of this year, we have a long way to go before
we are back on solid financial footing."
Having said that, Ethan Frost gets the nod from Bill Peach
and sits down. I'm sitting halfway down a long table where all the
plant managers are gathered. On Peach's right is Hilton Smyth,
who happens to be glowering at me in the aftermath of Frost's
tribute to my plant. I relax in my chair and for a moment allow
myself to contemplate the view through the broad plateglass win-
dow, a sunny city on an early summer day.
May has ended. Aside from the problem with the shortages
of non-bottleneck parts, which have now gone away, it's been an
excellent month. We're now timing the release of all materials
according to a new system Ralph Nakamura developed, which is
keyed to the speed of the bottlenecks. He's got a data terminal
now at both of the bottlenecks, so as inventory is processed, the
latest information can be fed directly into the plant data base.
With the new system we're beginning to see excellent results.
Ralph did a little experimenting with the system and soon
discovered we can predict within a day, more or less, when a
shipment will leave the plant. Based on this, we've been able to
put together a report to marketing listing all customer orders and
dates when they will be shipped. (I don't know if anybody in
marketing really believes that report, but so far it's been highly
accurate.)
"Rogo," says Peach, "because you seem to be the only one
among us who has improved to any degree, we'll let you start the
round of reports."
I open up the cover of my report and launch into a presenta-
tion of the highlights. By almost every standard, we've had a
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good month. Inventory levels have fallen and are continuing to
fall rapidly. Withholding some materials has meant we're no
longer choking on work-in-process. Parts are reaching the bottle-
necks when they're supposed to, and the flow through the plant
is much smoother than before.
And what happened to efficiencies? Well, they did fall ini-
tially as we began to withhold raw material from the floor, but not
as much as we had been afraid they would—it turns out we were
consuming excess inventory. But with the rate of shipments up
dramatically, that excess has melted quickly. And now that we're
beginning to resume releases of materials to non-bottlenecks
again, efficiencies are on their way back up. Donovan has even
told me confidentially he thinks the real numbers in the future
will be almost the same as before.
The best news is we've wiped out our backlog of overdue
orders. Amazing as it seems, we're completely caught up. So cus-
tomer service has improved. Throughput is up. We're on our way
back. It's too bad the standard report we've prepared can't begin
to tell the full story of what's really going on.
When I've finished, I look up the table and see Hilton Smyth
whispering something to Bill Peach. There is quiet around the
table for a moment. Then Bill nods to Hilton and talks to me.
"Good job, Al," Bill says stiffly.
Through with me, Bill asks another manager to deliver his
report. I sit back, irritated slightly that Peach wasn't more posi-
tive, that he didn't put more praise on me the way Frost had
indicated he should. I came in here feeling as though we'd really
turned the plant around. And I guess I expected a little more
than a "good job," a pat on the head.
But then I have to remind myself that Peach doesn't know
the extent of the change. Should he know? Should we be telling
him? Lou has asked me about this. And I've told him, no; let's
hold off for a while.
We could go to Bill Peach and make a presentation to him,
put all our cards on the table and let him decide. In fact, that's
exactly what we will do eventually. But not yet. And I think I
have a good reason.
I've worked with Bill Peach for a lot of years; I know him
pretty well. He's a smart man—but he is not an innovator. A
couple of years ago, he might have let us run with this for a while.
Not today. I have a feeling if we go to him now, he'll put on his
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hard nose and tell me to run the plant by the cost accounting
methods he believes in.
I have to bide my time until I can go to him with a solid case
that my way (Jonah's way, really) is the one that truly works. It's
too early for that. We've broken too many rules to tell him the full
story now.
But will we have the time? That's what I keep asking myself.
Peach hasn't voluntarily lifted the threat to close the plant. I
thought he might say something (publicly or privately) after this
report, but he hasn't. I look at him at the end of the table. He
seems distracted, not like himself. The others talk and he seems
only half interested. Hilton seems to cue him on what to say.
What's with him?
The meeting breaks up about an hour after lunch, and by
then I've decided to have a private talk with Peach if I can get it. I
follow him out into the corridor from the conference room and
ask him. He invites me into his office.
"So when are you going to let us off the hook?" I ask him
after the door is closed.
Bill sits down in a big upholstered chair and I take the one
opposite him. Without the desk between us, it's a nice little inti-
mate chat.
Bill looks straight at me and says, "What makes you think
I'm going to?"
"Bearington is on its way back," I tell him. "We can make
that plant make money for the division."
"Can you?" he asks. "Look, Al, you've had a good month.
That's a step in the right direction. But can you give us a second
good month? And a third and fourth? That's what I'm waiting to
see."
"We'll give them to you," I say to him.
"I'm going to be frank," says Peach. "I'm not yet convinced this hasn't been just a flash in the pan, so to speak. You had a
huge overdue backlog. It was inevitable you'd ship it eventually.
What have you done to reduce costs? Nothing that I can see. It's
going to take a ten or fifteen percent reduction in operating ex-
pense to make the plant profitable for the long term."
I feel my heart sink. Finally,
I say, "Bill, if next month we
turn in another improvement, will you at least delay the recom-
mendation to close the plant?"
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He shakes his head. "It'll have to be a bigger improvement
than what you gave us in this past period."
"How big?"
"Just give me fifteen percent more on the bottom line than
you did this month," he says.
I nod. "I think we can do that," I say—and note the split
second of shock blink into Peach's face.
Then he says, "Fine. If you can deliver that, and keep deliv-
ering it, we'll keep Bearington open."
I smile. If I do this for you, I'm thinking, you'd be an idiot to
close us.
Peach stands, our chat concluded.
I fly the Mazda up the entrance ramp to the Interstate with
the accelerator floored and the radio turned up loud. The adren-
alin is pumping. The thoughts in my head are racing faster than
the car.
Two months ago I figured I might be sending out my resume
by now. But Peach just said if we turned in another good month
he'd let the plant stay open. We're almost there. We just might be
able to pull this off. Just one more month.
But fifteen percent?
We've been eating up our backlog of orders at a terrific rate.
And by doing so we've been able to ship a tremendous volume of
product—tremendous by any comparison: last month, last quar-
ter, last year. It's given us a big surge of income, and it's looked
fantastic on the books. But now that we've shipped all the
overdues, and we're putting out new orders much faster than
before. . . .
The thought creeps up on me that I'm in really big trouble.
Where the hell am I going to get the orders that will give me an
extra fifteen percent?
Peach isn't just asking for another good month; he's de-
manding an incredible month. He hasn't promised anything; I
have—and probably too much. I'm trying to remember the or-
ders scheduled for the coming weeks and attempting to calculate
in my head if we're going to have the volume of business neces-
sary for the bottom-line increase Peach wants to see. I have a
scary feeling it won't be enough.
Okay, I can ship ahead of schedule. I can take the orders
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scheduled for the first week or two of July and ship them in June
instead.
But what am I going to do after that? I'm going to be putting
us into a huge hole in which we have nothing else to do. We need
more business.
I wonder where Jonah is these days.
Glancing down at the speedometer, I find to my surprise
that I'm zipping along at eighty. I slow down. I loosen my tie. No
sense killing myself trying to get back to the plant. It occurs to
me, in fact, that by the time I get back to the plant it'll be time to
go home.
Just about then, I pass a sign saying I'm two miles from the
interchange that would put me on the highway to Forest Grove.
Well, why not? I haven't seen Julie or the kids in a couple of days.
Since the end of school, the kids have been staying with Julie and
her parents.
I take the interchange and get off at the next exit. At a gas
station on the corner, I make a call to the office. Fran answers and
I tell her two things: First, pass the word to Bob, Stacey, Ralph,
and Lou that the meeting went well for us. And, second, I tell her
not to expect me to come in this afternoon.
When I get to the Barnett's house, I get a nice welcome. I
spend quite a while just talking to Sharon and Dave. Then Julie
suggests we go for a walk together. It's a fine summer afternoon
outside.
As I'm hugging Sharon to say goodbye, she whispers in my
ear, "Daddy, when are we all going to go home together?"
"Real soon, I hope," I tell her.
Despite the assurance I gave her, Sharon's question doesn't
go away. I've been wondering the same thing myself.
Julie and I go to the park, and after walking for awhile, we sit
down on a bench by the river. We sit without saying anything for
a while. She asks me if something is wrong. I tell her about
Sharon's question.
"She asks me that all the time," says Julie.
"She does? What do you tell her?"
Julie says, "I tell her we'll be going home real soon."
I laugh. "That's what I said to her. Do you really mean that?"
She's quiet for a second. Finally, she smiles at me and says
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sincerely, "You've been a lot of fun to be around in the last few
weeks."
"Thanks. The feeling is mutual," I say.
She takes my hand and says, "But . . . I'm sorry, Al. I'm
still worried about coming home."
"Why? We're getting along a lot better now," I say, "What's the problem?"
"Look, we've had some good times for a change. And that's
fine. I've really needed this time with you," she says. "But if we go back to living together, you know what's going to happen
don't you? Everything will be fine for about two days. But a week
from now we'll be having the same arguments. And a month
later, or six months, or a year from now . . . well, you know
what I mean."
I sigh. "Julie, was it that bad living with me?"
"Al, it wasn't bad," she says. "It was just ... I don't know.
You weren't paying any attention to me."
"But I was having all kinds of problems in my job. I was
really in over my head for awhile. What did you expect from
me?"
"More than what I was getting," Julie says. "You know, when I was growing up, my father always came home from work at the
same time. The whole family always ate together. He spent the
evenings at home. With you, I never know what's going on."
"You can't compare me to your father," I say. "He's a den-
tist. After the last tooth of the day is filled, he can lock up and go
home. My business isn't like that."
"Alex, the problem is you are not like that," she says. "Other people go to work and come home at regular times."
"Yes, you're partially right. I am not like other people," I
admit. "When I get involved in something, I really get involved.
And maybe that has to do with the way 7 was brought up. Look at
my family—we hardly ever ate together. Somebody always had to
be minding the store. It was my father's rule: the business was
what fed us, so it came first. We all understood that and we all
worked together."
"So what does that prove except our families were differ-
ent?" she asks. "I'm telling you about something that bothered
me so much and for so long that I wasn't even sure if I loved you anymore."
"So what makes you sure you love me now?"
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"Do you want another fight?" she asks.
I look the other way.
"No, I don't want to fight," I tell her.
I hear her sigh. Then she says, "You see? Nothing has
changed . . . has it."
Neither of us says a word for quite awhile. Julie gets up and
walks over to the river. It looks for a second as if she might run
away. She doesn't. She comes back again and sits down on the
bench.
She says to me, "When I was eighteen, I had everything
planned—college, a teaching degree, marriage, a house, chil-
dren. In that order. All the decisions were made. I knew what
china pattern I wanted. I knew the names I wanted for the kids. I
knew what the house should look like and what color the rug
should be. Everything was certain. And it was so important that I
have it all. But now ... I have it all, only it's different somehow.
None of it seems to matter."
"Julie, why does your life have to conform to this . . . this
perfect image you have in your head?" I ask her. "Do you even
know why you want the things you do?"
"Because that's how I grew up," she says. "And what about
you? Why do you have to have this big career? Why do you feel
compelled to work twenty-four hours a day?"
Silence.
Then she says, "I'm sorry. I'm just very confused."
"No, that's okay," I say. "It was a good question. I have no idea why I wouldn't be satisfied being a grocer, or a nine-to-five
office worker."
"Al, why don't we just try to forget all this," she suggests.
"No, I don't think so," I tell her. "I think we should do the opposite. We ought to start asking a few more questions."
Julie gives me a skeptical look and asks, "Like what?"
"Like what is our marriage supposed to do for us?" I ask her.
"My idea of the goal of a marriage is not living in a perfect house
where everything happens according to a clock. Is that the goal
for you?"
"All I'm asking for is a little dependability from my hus-
band," she says. "And what's all this about a goal? When you're married, you're just married. There is no goal."
"Then why be married?" I ask.
"You get married because of commitment . . . because of
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love . . . because of all the reasons everybody else does," she
says. "Alex, you're asking a lot of dumb questions."
"Whether they're dumb or smart, I'm asking them because