Sunday, February 04, 2007

Eli Goldratt's P&Q

The infamous "P&Q Example"
from the mind of Eli Goldratt

Want to increase your throughput?

Read and complete this exercise: P&Q Example (PDF)

Nothing too difficult. Simple and basic math skills will suffice.

No cheating. No guessing. No approximations. No modifying the example (at least not yet). You must read the example and work out the math. Pen and paper are fine. No fancy spreadsheet required. However, I will email everyone who asks, a copy of the one I created to help explain the P&Q challenge.

Ever heard the expression, "There is more to it, than face value?" Or, "It looks too good to be true?"

These are light-hearted attempts to explain why solutions that seem to make good sense often result in disaster.

I have witnessed numerous "tests" by Goldratt of the P&Q Example in live audiences. He gives them plenty of time to work it out. My first time, I got $1500, along with about 80% of the attendees. In fact, almost every time, with rooms full of managers and often "C" level executives, the majority arrive at $1500 for the weekly profit.


Why is it wrong? Inattention to detail. In real life, there are constraints. Why am I not driving that new Chrysler Pacifica that "calls to me?" It was either a new Harley V-Rod or the Pacifica. Life is full of constraints. Businesses too.

Remember the movie, Colossus: The Forbin Project?

Once the United States supercomputer discovers the Soviet version, they get connected and started communicating. Building on simple math concepts, until the dialog evolves into a new computer language.

Start working the P&Q Example based on simple addition, subtraction and multiplication. Calculate the assumptions. Find the constraint. Then solve based on the constraint. Now what is your answer?

Once we understand these basics, we can proceed to fixing your throughput issues.

Not one minute sooner.

Jeff 'SKI' Kinsey, Jonah

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