Eliyahu M. Goldratt - Isnt It Obvious?

Other North River Press books by Eliyahu M. Goldratt

The Goal, 3rd Revised Edition
Its Not Luck
Critical Chain
Necessary But Not Sufficient
The Choice
The Theory of Constraints
The Race
The Haystack Syndrome
Production the TOC Way
Essays on the Theory of Constraints
Late Night Discussions on the Theory of Constraints

Isnt It Obvious?

Revised Edition

Eliyahu M. Goldratt

With Ilan Eshkoli and Joe BrownLeer

Additional copies can be obtained from your local bookstore or the publisher

The North River Press
P.O. Box 567
Great Barrington, MA 01230
(800) 486-2665
www.northriverpress.com

ISBN: 978-0-88427-194-9

Copyright 2010 Eliyahu M. Goldratt

All rights reserved. No part of this book may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording, or any information storage or retrieval system, without permission in writing from the publisher.

Manufactured in the United States of America

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Staring at the big red sign, Paul White wondered where his dreams had gone wrong. I really dont have the strength for another one of these days, he thought, and took another sip from his cup of freshly ground coffee. A long, deep breath later, Paul straightened his standard blue blazer and stepped inside the Boca Raton branch of Hannahs Shop.

Little red signs promoting the discounts, offspring of the bigger one outside, decorated the store. As the store manager, he had attached a lot of hope to this sales success. However, the lines at the checkout counters were no longer than usual, and the products on sale were still piled high. The lower prices were not enough of an incentive. As he ran a hand through his graying hair, Paul shrugged.

Was there anything else that could be done?

It wasnt news that this store was not a huge success, but this morning Paul had received the monthly report. The Boca store had dropped down to eighth place in profitability out of the ten stores in the region. It was a new low for him.

Trying to shake off the uncomfortable feeling, he walked through the 35,000 square feet comprising the stores six departments, all of which were his responsibility. He passed the carefully laid out sheets and duvets on display in splashes of blue and green. Paul stopped for a moment to survey the mock bathroom they had set up, where thick, body-length towels hung next to bathrobes. Across from him were the kitchen textiles, where aprons and towels mingled, next to tables set with matching tablecloths, cloth napkins, and placemats in autumn shades. The carpet and rug department presented colors and textures from around the world, and then came the flowing curtains, in shades of white, gold, and silver.

The store always had a wide variety of goods, and he had worked hard to have a beautiful display maintained at all times. Trying to be constantly responsive to his customers, Paul had initiated a work plan of changing the in-store display twice as often as the front windows. The store offered attractive prices and promotions, but sales were still not taking off. Was there anything else that could be done?

A young staff trainee passed by and said hello. Paul returned the greeting with a full smile, while inwardly he reasoned that if he couldnt create more sales, perhaps staff should be dismissed. It was not something he wanted to do, but cutting one member of the sales staffmeant saving some twenty thousand dollars a year. As he looked around, he saw that even though they were not in the middle of a holiday rush, all his salespeople were busy. There was no way he could let any of them go without placing some sales at risk. The store was running at reasonable manpower costs.

So, what else could be done?

Excuse me, miss, Paul overheard an elderly lady with bronze glasses saying to Janine, one of his department managers. Pointing to a maroon tablecloth she asked, Do you have this in sixty inches?

Im afraid not, Janine replied. We have two ninety-inch cloths left in this color, and the sixty-inch only in blue and beige. Would you prefer it in another color? Maybe one with a different pattern?

No, thanks. Its for my sister, and maroon is her favorite color.

As the elderly woman turned away, disappointed, Paul approached her. Excuse me, maam, he offered, trying not to loom over her despite his six-foot-three frame. Perhaps I can be of assistance. Would you like me to check if I can obtain the tablecloth from one of the chains nearby stores?

She agreed, and a call was placed to the Boynton Beach store. Gary, do you have any of the maroon tablecloths, serial KTL 1860? Thats the sixty-inch ones.

Lemme check, Gary said in a nasal voice, and Paul could hear him speaking with his staff on the other side of the line. Yes, we do, but only one.

I have a customer who would like to buy it. Any chance you could send it over?

Sorry, Paul, no can do.

I guess this is what you call teamwork, Paul said bitterly, rolling his eyes.

If you really want to talk teamwork, instead of me sending you the tablecloth, how about sending the customer here? It will be a lot less of a hassle for everyone.

Disappointed with his colleague, Paul decided to try another tack. He called Roger, the regional warehouse manager. Their daughters were in school together, and the families had become friends. Hi, Rog. Sorry to bother you, but Ive got a request. Any chance you can get me a serial KTL 1860 tablecloth?

Sure, Paul. I can add it to your next shipment, on Wednesday.

Thanks, Roger, let me double check with the customer and Ill call you back.

Paul hung up and turned to the elderly lady. Maam, Im happy to inform you that the tablecloth can be here on Wednesday, he reported, with the best customer service smile he could muster.

Oh, Im not sure, she said coolly. Im busy on Wednesdays, and I dont want to leave it for the last minute. Maybe, if I find the time, Ill stop in.

Paul watched in dismay as she left the store, and cursed under his breath the fact that he had bothered to intervene. He had just intensified his catch-22. It was almost certain this woman would not come back for the tablecloth. That meant that the tablecloth would end up as surplus for the store. He was already running a sale to get rid of his surplus stock, at little or no profit. There was no need to fill the store with items that wouldnt move fast enough. But if he didnt order it and she came in, she would be so disappointed that he would not only lose a sale but he would lose a customer. Risk losing sales or risk surpluses? This dilemma was drowning him. No wonder his stores profits werent higher. If only he knew exactly what the customers would buy.

He called Roger again. Send me the tablecloth, please, Rog. Ill fill the special order form when I get back to my desk. I just hope someone will buy it. And then Paul added, Roger, do you have a crystal ball in stock?

Ive asked the head office for two, but they said itll take a while. Rogers smile was almost audible.

As Paul hung up, he asked himself again if there was something else that could be done to boost his stores profitability. And the answer was a simple no. Sales versus surplus was a dilemma that only a crystal ball could solve.

Caroline stepped onto the porch of her parents waterfront house, carrying her fathers cell phone. Closing the glass doors behind her, she caught a reflection of her children playing catch on the large lawn, between the house and the bay. The palm trees that stood vigil around the porch her parents had recently renovated cast a pleasant shadow in the late afternoon.