The Goal: a process of Ongoing Improvement

DW: That’s understandable, since 
The Goal
describes a production
problem.
PH: Yes. So I was one of those stupid people who couldn’t see the whole
picture. So then Eli explained the bigger picture and the bigger application of
it. He slowly forced me to think—sometimes by yelling at me, “Think!” It
was a hefty morning. And this story is described by him in 
It’s Not Luck
—
the candy wrappers case. We finally made some money over there. Actually,
a lot of money. Later I discovered that my nephew, who was the other 50%
owner of the company, wasn’t doing much and was taking out more money
than we had agreed upon, so we decided to split the company in two. I did the
split and he chose which part he wanted. I never imagined that he would keep
the printing business, which I had been running, and leave me with the office
supply business, which had been his responsibility.
DW: Did you know anything about the office supply?
PH: No, nothing at all. The company was pretty big, it was number four or
five in the Netherlands. It was making an awful loss. Competition was

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suddenly fierce and only concentrated on price. Other companies were very
subtly sending brochures to every small business in the Netherlands with
prices on the front cover that I couldn’t get for myself as a wholesaler. This
was really awful. All our good customers became suddenly more and more
interested in price. They said, “How is it possible that we pay twice as much
as what’s on the front cover of this brochure?”
DW: It sounds like an impossible situation.
PH: Well, it was, it was really awful. We had something like four or five
thousand customers, 20 sales people. The only thing we could think of was to
also lower prices, and do it only on items where we had to. That was not a
long-term solution but that was what everybody else was doing. So the
conventional way of doing business in office supplies was pretty soon
completely gone. We got tenders for office supplies—which was unheard of
—where you had to fight with three or four competitors. In the past, orders
for office supplies were just given to a local good-performing company. Now
everybody was focusing on price.