Eliyahu Moshe Goldratt (born March 31, 1948) is an Israeli physicist who became a business management guru. He is the originator of the Optimized Production Technology, the Theory of Constraints (TOC), the Thinking Processes, Drum-Buffer-Rope, Critical Chain Project Management (CCPM) and other TOC derived tools.
He has authored several business novels and non-fiction works, mainly on the Theory of Constraints.
Born in Israel into a rabbinic family Goldratt went on to become a physicist. He obtained his Bachelor of Science degree from Tel Aviv University, and his Masters of Science and Doctorate of Philosophy degrees from Bar-Ilan University.
After some experience helping Israeli manufacturers, Goldratt left the academic world to join a company called Creative Output. The company developed and sold a software package, the Optimized Production Technology (OPT). OPT was billed as the first software to provide finite capacity scheduling for production environments. This software and the principles behind it were analyzed by a number of major publicationsG. Bylinsky. An Efficiency guru with a brown box. Fortune; 120 (September 1983)
Goldratt was actively involved in many controversies such as Cost Accounting x Throughput AccountingGoldratt, E. M.; Cost accounting is enemy number one of productivity. International Conference Proceedings, American Production and Inventory Control Society (APICS) (October 1983). and culminated in the publication of A Town Without Walls Goldratt, Eliyahu M. & Plossl, George; A Town Without Walls. Whitepaper, distributed during APICS 1984 International Conference in Las Vegas/USA.
Within the company Goldratt noticed elements that made him uncomfortableGoldratt, Eliyahu M.; My Saga to Improve Production. For instance, in the second edition of The Goal several software implementations did not come close to their estimated potential. After some work Goldratt discovered that the habits, and assumptions (paradigms) of employees and managers prior to using the software were still prominent and negatively influenced results after implementation.
His answer was the book The Goal that took 13 months to write. After completion the book was not well received by the company staff and by large publishers . Finally, with help from Larry Gadd the owner of North River Press, the book was published and became a great successLaurence Gadd. Preface to The Choice. After a while Goldratt noticed that many implementations were conducted using the Book but not the software. This caused further stress in the company and Goldratt tried to capture the essence of how to implement the solution directly in what is now known as Drum-Buffer-Rope method. He published The Race to explain some of the concepts he was working on, and developed a course to teach people how to manage their production using a computer simulation game.
Goldratt tried to move the company down the path of "consulting", trying to help people rethink the way they did things, but Creative Output's declining revenues and Goldratt involvement with anything but the sales of OPT software convinced the shareholders to fire Goldratt (and afterward his closer collaborators).
Avraham Y. Goldratt Institute years
After leaving Creative Output circa 1985 Goldratt created the Avraham Y Goldratt Institute or AGI (named after his father) to promote the Theory of Constraints and help it be implemented worldwide.
During the time of the AGI Goldratt got deeply involved with the further development of TOC, mainly the Thinking Processes (and launched it publicly in 1991), Critical Chain Project Management and other applications. His concepts influenced applications outside manufacturing and supply management, including the field of sales process engineering.
The AGI had many success stories. In 1997, Goldratt followed his plan to retire from the Institute prior to his 50th birthday.
Goldratt Group years
From the beginning of the 2000s Goldratt created the self-funded Goldratt Group and launched the Viable Vision initiative.
He continues the development of TOC both in the Goldratt Group and in active support for other developments like TOC for Education, TOC in Healthcare, TOC for the Individual (in the continuity of the Odyssey program and the publishing of The Choice).
Goldratt has produced many works. Some of the more noteworthy are:
*The Goal (1984) introduces TOC process for improving organizations and briefly TOC's accounting aspects; it is considered an important work on the topic of focused performance improvement
*It's Not Luck (1994) applies TOC to marketing, distribution and Business Strategy
*Critical Chain (1997) applies TOC to project management and illustrates the Critical Chain method for managing projects while commenting on the MBA Academic environment and its issues
*Necessary But Not Sufficient (2000) applies TOC to Enterprise resource planning (ERP) and operations software
*The Choice (2008) Talks about Goldratt's thought provoking approach, this time through a conversation with his daughter Efrat, as he explains to her his fundamental system of beliefs. A second edition is planned for publishing which includes Efrat's own notes she made during the conversation with her father, helping the reader determine the true essence of the book.
*Isn't it Obvious (2009) Goldratt's newest book looks into retail. Ilan Eshkoli and Joe Leer Brown are co-authors. The story is about a husband (manager) and wife (purchaser) working in her family's retail chain. An unexpected crisis helps them to find new ways of doing things - ending in success.
