The Goal: a process of Ongoing Improvement

Shit, I could be on the street in three months!
"Listen, Al, if anybody asks you, you didn’t hear any of this from me,’’ says
Nat.
And he’s gone. I find myself standing alone in the corridor on the fifteenth
floor. I don’t even remember having gotten on the elevator, but here I am. I
vaguely recall Nat talking to me on the way up, saying something about
everybody putting out their resum´es.
I look around, feel stupid, wonder where I’m supposed to be now, and then I
remember the meeting. I head down the hall where I see some others going
into a conference room.
I go in and take a seat. Peach is standing at the far end of the table. A slide
projector sits in front of him. He’s starting to talk. A clock on the wall
indicates it’s exactly eight o’clock.
I look around at the others. There are about twenty of them, most of them
looking at Peach. One of them, Hilton Smyth, is looking at me. He’s a plant
manager, too, and he’s a guy I’ve never liked much. For one thing, I resent
his style—he’s always promoting some new thing he’s doing, and most of the
time what he’s doing isn’t any different from the things everyone else is
doing. Anyway, he’s looking at me as if he’s checking me out. Is it because I
look a little shaken? I wonder what he knows. I stare back at him until he
turns toward Peach.

---

When I’m finally able to tune into what Peach is saying, I find he’s turning
the discussion over to the division controller, Ethan Frost, a thin and wrinkled
old guy who, with a little makeup, could double for the Grim Reaper.
The news this morning befits the messenger. The first quarter has just ended,
and it’s been a terrible one everywhere. The division is now in real danger of
a shortfall in cash. All belts must be tightened.
When Frost is done, Peach stands and proceeds to deliver some stern talk
about how we’re going to meet this challenge. I try to listen, but after his first
couple of sentences, my mind drops out. All I hear are fragments.
". . . imperative for us to minimize the downside risk . . .’’ ". . . acceptable to
our current marketing posture . . .’’ "... without reducing strategic expense...’’
". . . required sacrifices...’’ ". . . productivity improvements at all locations...’’
Graphs from the slide projector begin to flash on the screen. A relentless
exchange of measurements between Peach and the others goes on and on. I
make an effort, but I just can’t concentrate.
"... first quarter sales down twenty-two percent compared to a year ago . . .’’
". . . total raw materials’ costs increased...’’ ". . . direct labor ratios of hours
applied to hours paid had a three-week high . . .’’ ". . . now if you look at
numbers of hours applied to production versus standard, we’re off by over
twelve percent on those efficiencies . . .’’
I’m telling myself that I’ve got to get hold of myself and pay attention. I
reach into my jacket to get a pen to take some notes.
"And the answer is clear,’’ Peach is saying. "The future of our business
depends upon our ability to increase productivity.’’
But I can’t find a pen. So I reach into my other pocket. And I pull out the
cigar. I stare at it. I don’t smoke anymore. For a few seconds I’m wondering
where the hell this cigar came from.
And then I remember.

---

4
Two weeks ago, I’m wearing the same suit as now. This is back in the
good days when I think that everything will work out. I’m traveling, and I’m
between planes at O’Hare. I’ve got some time, so I go to one of the airline
lounges. Inside, the place is jammed with business types like me. I’m looking
for a seat in this place, gazing over the three-piece pinstripes and the women
in conservative blazers and so on, when my eye pauses on the yarmulke worn
by the man in the sweater. He’s sitting next to a lamp, reading, his book in
one hand and his cigar in the other. Next to him there happens to be an empty
seat. I make for it. Not until I’ve almost sat down does it strike me I think I
know this guy.
Running into someone you know in the middle of one of the busiest
airports in the world carries a shock with it. At first, I’m not sure it’s really
him. But he looks too much like the physicist I used to know for him to be
anyone but Jonah. As I start to sit down, he glances up at me from his book,
and I see on his face the same unspoken question: Do I know you?
"Jonah?’’ I ask him.
"Yes?’’
"I’m Alex Rogo. Remember me?’’
His face tells me that he doesn’t quite.
"I knew you some time ago,’’ I tell him. "I was a student. I got a grant to go
and study some of the mathematical models you were working on.
Remember? I had a beard back then.’’
A small flash of recognition finally hits him. "Of course! Yes, I do
remember you. ‘Alex,’ was it?’’

---

"Right.’’
A waitress asks me if I’d like something to drink. I order a scotch and soda
and ask Jonah if he’ll join me. He decides he’d better not; he has to leave
shortly.
"So how are you these days?’’ I ask.
"Busy,’’ he says. "Very busy. And you?’’
"Same here. I’m on my way to Houston right now,’’ I say. "What about
you?’’
"New York,’’ says Jonah.
He seems a little bored with this line of chit-chat and looks as if he’d like to
finish the conversation. A second of quiet falls between us. But, for better or
worse, I have this tendency (which I’ve never been able to bring under
control) of filling silence in a conversation with my own voice.
"Funny, but after all those plans I had back then of going into research, I
ended up in business,’’ I say. "I’m a plant manager now for UniCo.’’
Jonah nods. He seems more interested. He takes a puff on his cigar. I keep
talking. It doesn’t take much to keep me going.
"In fact, that’s why I’m on my way to Houston. We belong to a
manufacturers’ association, and the association invited UniCo to be on a
panel to talk about robotics at the annual conference. I got picked by UniCo,
because my plant has the most experience with robots.’’
"I see,’’ says Jonah. "Is this going to be a technical discussion?’’
"More business oriented than technical,’’ I say. Then I remember I have
something I can show him. "Wait a second....’’

---

I crack open my briefcase on my lap and pull out the advance copy of the
program the association sent me.
“Here we are,” I say, and read the listing to him. “ ‘Robotics: Solution to
America’s Productivity Crisis in the new millenium . . . a panel of users and
experts discusses the coming impact of industrial robots on American
manufacturing.’ ”
But when I look back to him, Jonah doesn’t seem very impressed. I figure,
well, he’s an academic person; he’s not going to understand the business
world.
"You say your plant uses robots?’’ he asks.
"In a couple of departments, yes,’’ I say.
"Have they really increased productivity at your plant?’’
"Sure they have,’’ I say. "We had—what?’’ I scan the ceiling for the figure.
"I think it was a thirty-six percent improvement in one area.’’
"Really... thirty-six percent?’’ asks Jonah. "So your company is making
thirty-six percent more money from your plant just from installing some
robots? Incredible.’’
I can’t hold back a smile.
"Well...no,’’ I say. "We all wish it were that easy! But it’s a lot more
complicated than that. See, it was just in one department that we had a thirty-
six percent improvement.’’ Jonah looks at his cigar, then extinguishes it in
the ashtray. "Then you didn’t really increase productivity,’’ he says. I feel my
smile freeze.
"I’m not sure I understand,’’ I say.
Jonah leans forward conspiratorially and says, "Let me ask you something—
just between us: Was your plant able to ship even one more product per day

---

as a result of what happened in the department where you installed the
robots?’’
I mumble, "Well, I’d have to check the numbers . . .’’
"Did you fire anybody?’’ he asks.
I lean back, looking at him. What the hell does he mean by that?
"You mean did we lay anybody off? Because we installed the robots?’’ I say.
"No, we have an understanding with our union that nobody will be laid off
because of productivity improvement. We shifted the people to other jobs. Of
course, when there’s a business downturn, we lay people off.’’
"But the robots themselves didn’t reduce your plant’s people expense,’’ he
says.
"No,’’ I admit.
"Then, tell me, did your inventories go down?’’ asks Jonah.
I chuckle.
"Hey, Jonah, what is this?’’ I say to him.
"Just tell me,’’ he says. "Did inventories go down?’’
"Offhand, I have to say I don’t think so. But I’d really have to check the
numbers.’’
"Check your numbers if you’d like,’’ says Jonah. "But if your inventories
haven’t gone down . . . and your employee expense was not reduced... and if
your company isn’t selling more products—which obviously it can’t, if
you’re not shipping more of them—then you can’t tell me these robots
increased your plant’s productivity.’’
In the pit of my stomach, I’m getting this feeling like you’d probably have if

---

you were in an elevator and the cable snapped.
"Yeah, I see what you’re saying, in a way,’’ I tell him. "But my efficiencies
went up, my costs went down—’’
"Did they?’’ asks Jonah. He closes his book.
"Sure they did. In fact, those efficiencies are averaging well above ninety
percent. And my cost per part went down considerably. Let me tell you, to
stay competitive these days, we’ve got to do everything we can to be more
efficient and reduce costs.’’
My drink arrives; the waitress puts it on the table beside me. I hand her a 
ten
and wait for her to give me the change.
"With such high efficiencies, you must be running your robots constantly,’’
says Jonah.
"Absolutely,’’ I tell him. "We have to. Otherwise, we’d lose our savings on
our cost per part. And efficiencies would go down. That applies not only to
the robots, but to our other production resources as well. We have to keep
producing to stay efficient and maintain our cost advantage.’’
"Really?’’ he says.
"Sure. Of course, that’s not to say we don’t have our problems.’’
"I see,’’ says Jonah. Then he smiles. "Come on! Be honest. Your inventories
are going through the roof, are they not?’’
I look at him. How does he know?
"If you mean our work-in-process—’’
"All of your inventories,’’ he says.
"Well, it depends. Some places, yes, they are high,’’ I say.

---

"And everything is always late?’’ asks Jonah. "You can’t ship anything on
time?’’
"One thing I’ll admit,’’ I tell him, "is that we have a heck of a problem
meeting shipping dates. It’s a serious issue with customers lately.’’
Jonah nods, as if he had predicted it.
"Wait a minute here... how come you know about these things?’’ I ask him.
He smiles again.
"Just a hunch,’’ says Jonah. "Besides, I see those symptoms in a lot of the
manufacturing plants. You’re not alone.’’
I say, "But aren’t you a physicist?’’
"I’m a scientist,’’ he says. "And right now you could say I’m doing work in
the science of organizations—manufacturing organizations in particular.’’
"Didn’t know there was such a science.’’
"There is now,’’ he says.
"Whatever it is you’re into, you put your finger on a couple of my biggest
problems, I have to give you that,’’ I tell him. "How come—’’
I stop because Jonah is exclaiming something in Hebrew. He’s reached into a
pocket of his trousers to take out an old watch.
"Sorry, Alex, but I see I’m going to miss my plane if I don’t hurry,’’ he says.
He stands up and reaches for his coat.
"That’s too bad,’’ I say. "I’m kind of intrigued by a couple of things you’ve
said.’’

---

Jonah pauses.
"Yes, well, if you could start to think about what we’ve been discussing, you
probably could get your plant out of the trouble it’s in.’’
"Hey, maybe I gave you the wrong impression,’’ I tell him. "We’ve got a few
problems, but I wouldn’t say the plant is in