The year 2021 marks the 10th anniversary of Dr. Goldratt's passed away.
The Japan TOC Advancing Committee (J-TOC), of which I was the chairperson, supported Dr. Goldratt’s activities in Japan from 2004 to 2009. So, I was blessed with the chance to spend a lot of time with him in Japan, and I was able to directly feel his "worries" and "fluctuations in thinking.
I would like to write about my own memories of Dr. Goldratt, the title of this article is "Eli was a child of human".
Beginning
In September 2003, more than 300 people gathered at the first TOCICO General Assembly held at Homerton College in Cambridge, near London, England. I was invited to participate as a representative of Japanese professionals. (At that time, there were four participants from three companies: Mr. Eizo Kobayashi, Mr. Haruyuki Uchiyama, our company Tadayoshi Ishida, and Me).
What was very interesting at that time was that there was always a Japan (Japanese Consultants) conference at the request of Dr. Goldratt. The main purpose of the conference was to discuss how to promote TOC in Japan, but the main point was how to sell Dr. Goldratt himself to the Japanese industry.
As Dr. Goldratt mentioned stated in his article "Standing on the Shoulders of Giants," it was his long-cherished wish to be recognized in Japan, the birthplace of the Toyota Production System (TPS), This is deeply related to the formation of TOC so that I think he was looking for a way to do that all the time.
At the general meeting in Cambridge, he presented a concept called Viable Vision, which was the making the current sales equal to the profit in four years. So, at the first Japanese consultants Conference, he told us, "I'm going to visit the companies and create a Viable vision scenario, and you Japanese are going to follow it (implement). The only cost of the scenario would be my round trip airfare (first class, of course), so it would be a win-win for everyone. Sounds great, doesn't it?
To be honest, I couldn't believe my ears. It was true that the novel "The Goal" was a best-seller in Japan at that time, but I wondered if there would be any corporate leaders who would willingly adopt the method proposed by a single consultant like a lonely wolf. And, I walleyed about, if there were any corporate leaders who would willingly adopt the methods proposed by a single consultant, and if they would just create an idea, write a report, and be done with it, just like some strategy consulting firms.
I replied, "I don't think it, this is too expensive".
When he heard that, he became extremely angry and asked me,
"Then how much would you be willing to pay?
I was troubled for a moment.
"I think $2000 at most is reasonable.
I replied, that was the end of the meeting.
Since it was a camp-style conference, we all had dinner together, I had to buy Ms. Wendy Maxwell, the his secretary, a round of beers that day because she seemed to be really on edge about the whole exchange.
"You made Eli angry".
I remember, she said.
The "Viable Vision Offer" from Dr. himself to the consultants at the first TOC-ICO General Assembly in Cambridge, where he personally visited the clients and created the scenarios for the Viable Vision. In the discussion over the amount of money involved, there was a tenfold difference.
The next morning, he "easily" reversed his previous statement and announced to the 300 conference participants the exact price I had "proposed". It was a global universal price... I was quite surprised.
The reason I was able to attend this meeting was because of the recommendation of Daniel Walsh (now CEO of Exepron), a major member of the Goldratt family. I had never discuss Dr. Goldratt before, except for a brief conversation, and I remember thinking that is easy trusting someone who could not speak English not well.
The life of Dr. Goldratt, who spent 64 years of his life developing TOC, seems to have been basically full of conflicts with people.
TOC can sound "dubious" if it is explained in the wrong way, as in "only the bottleneck needs to be rubbed out and the rest of the management resources need to do nothing. In fact, at that time, some people called Dr. Goldratt "Snake Oil" (meaning unreliable or fraudulent stories), so Dr. Goldratt not only "refuted" them, but also try to "proved" the superiority of TOC by accumulating "achievements".
In those days, he used to say, "TOC is Common Sense, Make TOC the global management standard! Therefore, the TOC-based "Viable Vision" have to produce results. I think that's why the Eli was so desperate.
Nevertheless... However, I thought, not many companies in Japan would adopt Dr. Goldratt's proposal. In fact, when I went back to Japan and tried to contact some companies, the response was, as I had expected, that there was as "dubious" story, and unfortunately there were no results. Of course, I don't have the "storytelling skills" to make people believe in such stories, and I had no experience in such "business negotiations," so I can't blame Dr. Goldratt.
As mentioned in the article "Standing on the shoulders of giants," Japan is a special country for Dr. Goldratt, and to be recognized there was essential for his global strategy and a long-cherished wish. In this sense, the Dr. Goldratt may have been a little impatient.
Three years later
Dr. Goldratt continued to work vigorously after that to spread the concept of "Viable Vision = Raising profits in four years to the same amount as current sales. And every time TOC-ICO was held, the Japanese Consultants Conference was held. At the third conference held in Barcelona, Spain, Alex Knight, then COO of Goldratt Group, declared to me, "We sell only one product, Viable Vision. After that meeting, extremely talented consultants were appointed as directors for Japan, and they came to Japan every 2-3 months. Dr. Goldratt was really serious about selling himself in Japan!
The first V.V. meeting was held in Tokyo. The first one is organized by Japan TOC advancing committee (J-TOC), of which I am the chairman, and the second one is co-organized by J-TOC and Keidanren (Japan Federation of Economic Organizations). However, the response from the audience was not as good as the audience gathering. Yes, I remember well that the response was as if they were coming to see a "Celebrity" or a "Panda". I also remember that when he started talking about Viable Vision in his lecture, the reaction was as if they were listening to a fairy tale.
Of course, I was well known of the fact that this idea was not absurd. For example, there is a company with 10 billion in sales, a raw material cost ratio of 40%, a SG&A cost ratio of 50%, and a profit of 10%. If they were to use the TOC production improvement method to increase their production capacity by 20%, and if they were to use the improved 20% capacity without discounting, they would be able to increase their profit by 20%. If the company can sell the improved 20% capacity at a 20% higher price without discounting, the profit will increase by 3 times, based on theoretical calculations. By repeating this "improvement" and "offer to market (Customer)" several times, the Viable Vision will be achieved.
After the first seminar, in a six-hour discussion on how to taking action, I spoke "honestly" to Dr. Goldratt. I told him that Japanese companies would not accept a proposal based on "numbers" alone, and that it would sound "suspicious" if we insisted on expressing quantitative results at all costs.
Dr. Goldratt pondered for a while, smoking his pipe.
Then he said,
"Satoru, how about the idea of 'Ever-Flourishing Company'?
This was the moment when the concept of "Ever-Flourishing Company" was born. In order to prove this point, he launched into a strategy. I would like to talk about that in the next chapter.
Ever-Flourishing Company
In July 2009, Dr. Goldratt contributed an article titled "Standing Shoulder of Giants" to Gestão & Produção (Management and Production), an academic journal run by the Federal University of São Carlos in Brazil. However, the first time it was published was six months earlier (December 2008), in Japanese translation version was published in the Japanese business magazine Weekly Diamond. I don't know why this happened, but as a result, for some reason, the article was submitted to a Brazilian academic journal.
In fact, the case of Hitachi Tool (now MOLDINO Corporation) introduced in the Eli's article of "Standing on the Shoulders of Giants" is based on the case study "Zero Inventory, Half the Lead Time TOC Project (2002)" that I published from Chukei Publishing. Based on this book, A paper co-authored with Professor Dr. Mike Amble of Baylor University (Texas, U.S.A.), published in the International journal of production research by Taylor & Francis, entitled "TOC in a traditional Japanese manufacturing environment.
The Taylor & Francis Group operates 2,400 journals, publishes more than 7,000 new book titles each year, and has approximately 130,000 published books. The International journal of production research is also a very prestigious journal in the field of production management, and it is a great honor to have a paper published in it.
In fact, I remember very well that Dr. Goldratt was so pleased with this paper that he gave me a standing ovation at the TOCICO plenary session. In fact, I think this paper was a boon for the Goldratt Group's global strategy. He had absolute confidence and attachment to TOC. One word that supported his confidence was, "TOC is Common Sense, Make TOC the global management standard!
However, the pace of diffusion of TOC was slow, and the pace of diffusion of Lean (Toyota) Production System (promoted by Prof. Womack and others at MIT), which he considered as a rival, was very slow. There was a huge difference between the two. Dr. Goldratt wanted to close the gap with Lean at any cost, planned to write an article claiming that Lean was already obsolete in order to appeal the superiority of TOC.
However, in order to support his claim, it was essential to have actual examples of Japanese companies that had failed to adopt Lean and succeeded with TOC. Even in the Japanese industrial world, the home of Toyota, it is difficult to introduce Lean production, and such companies have achieved remarkable results by using TOC. I think he wanted to write his article in such an easy to understand "good and evil" story.
However, the only time he spent time to prove was during a seminar at the first Viable Vision event, when he was asked if Hitachi Tool had ever tried to implement the Lean Manufacturing System (Toyota Production System). There is mention in his article that the company had tried to implement Lean Production System many times, but each time the productivity declined, so abandoned the implementation. This is completely not fact.
When I introduced the project members to Dr. Goldratt that day, he suddenly started asking questions about the lean manufacturing method.
The executive in charge of the TOC project at the company said
"I'm interested in Lean, but I don't think it's right for us.
But Dr. Goldratt kept asking many times,
"Have you ever tried to imitate it?"
I remember this very well.
I have no way of knowing why this was changed "interested in" to "many attempts," but he was not only a consultant, but also a "master" with many Disciples. His disciple were not only the employees of the Goldratt Group, but also consultants all over the world who made a living from TOC. I think he had a strong sense of responsibility for each and every one of them. Therefore, I think he had a responsibility to prove that TOC is a "management method that achieves results" on a global scale in a logical and easy-to-understand way. If we think about it that way, I think we can understand the meaning of his actions.
This year marks the 10th anniversary of Dr. Eliyahu Goldratt's death, but his true face was undoubtedly that of a human being, a person who was troubled, thought, and went through trial and error. As one of the few people who knew his true face, I have written about my memories of Dr. Goldratt and the early days of the Japan Project.
#Theory of Constraint #Reform #Innovation #Improvement #Flow #Toyota production system #TOC thinking process #Goldratt
