The Race: [Paperback]

This is a book with a difference from Goldratt. The focus is on getting the concepts straight through illustrations and not in the form of a novel.

The goal of all businesses is to make money in the present as well as in the future. We have measurements like Net Profits, ROI, and Cash Flow to assess bottom line performance. We use the cost concept as a bridge to arrive at these measures. The book challenges the cost concept and looks at using Throughput, Inventory and Operating Expenses as the bridges that will lead us in the right direction. These terms or 'Global Operational Measures" are defined in a way that is different from conventional.

-Throughput - The rate at which the system generates money through sales.
-Inventory- All the money the system invests in purchasing things the system intends to sell.
-Operating Expense- All the money the system spends in turning inventory into throughput.

In order to succeed in the market place, six competitive edge issues are identified - Product (Quality and Engineering), Price (Higher Margins and Lower Investment per unit), Responsiveness (Due-date Performance and Shorter quoted lead-time).

Having defined these measures, the book looks at the critical role of inventory (at all stages). The high inventory syndrome leads to a lower performance in all the competitive edges. The manufacturing system then should get into the mode of "Synchronized Manufacturing". This is a unique combination of concepts like JIT, zero-defect and Drum-Buffer-Rope (DBR) approach. In fact I found that this is the best among all of Goldratt's books to understand the DBR concept. It helps in identifying the Capacity Constraint Resources (CCRs) and balances the entire manufacturing system to towards the globally optimal solution that can achieve our overall goal.

The book contains some interesting exercises at the end to ensue that the concepts are well understood.

A must read for all managers to achieve break through improvements in operations - manufacturing and service. The race is on and is getting hotter than ever. We need to keep pace to remain in this race. The second best may not survive to have another chance.

There is a best way to read this book! Read it this way ...

- Get about 10-20 sheets of paper and a pencil.
- On 5-10 sheets of paper, work the five exercises in the back.
- DO NOT mark on the exercise pages.
- DO NOT check your answers, yet.
- Read the book.
- On 5-10 more sheets of paper, work the exercises, AGAIN.
  Yes, do them over, really. Do not let your first try
  influence the second attempt.
- DO NOT mark on the exercise pages.
- Check all your answers against the official answers.
- Think about what you learned.
- Share these instructions and The Race with a colleague.

Failing to exploit the exercises makes it too easy to convince yourself that you already knew all that obvious stuff. If you lead or manage an organization, you should get at least four of these quick and easy exercises right on the first try. If you believe what you think you learned during your MBA, you will probably miss most of them the first time through.

No exercise is difficult. Each is a microcosim of a typical business situation. None requires math more complex than arithmetic. None requires special business knowledge. Yet, if you think conventionally without considering the barriers to success, you will miss all five of them.