Kfc Global Industry
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A CRITICAL REVIEW OF THE BOOK ITS NOT LUCK BY EM GOLDRATT.
An extensive use of Goldrattâs thinking process is applied in the various businesses as part of the problem solving. âItâs not luckâ emphasizes the importance of using the thinking processes in business and in your personal life. The thinking processes refer to a logical, graphical, general and practical method of problem solving methodology and basically comprised of 3 steps. These steps as described by Goldratt are:
What to change?
To what to change?
How to cause the change?
It is very clear that the problems experienced in the companies are not lone standing but in most of the cases they are dependent on each other and there are strong bonds or relationships with regards to the cause and effects between them. It is therefore important to form or establish a strong cause and affect between them.
It is important to identify the unresolved conflict that exists. The process can be illustrated through a conflict resolution diagram or evaporating cloud, Goldratt (1994). As a first step a âcurrent reality treeâ is used extensively to portray and depict the cause and effect that join all the problems proceeding in a specific situation. After this, one will realize that you donât have to deal with multiple problems because normally there are only one or two reasons or causes. The thinking processes give you a step by step procedure how to do this. This is where the undesirable effects (UDEâs) come in.
This brings us to what to change. If the undesirable effects lead to the root cause, then the root cause must lead to the undesirable effects, therefore âbrought on by the root cause itselfâ, Taylor (2003). The resultant current reality tree brings us to the process of determining what to change. Through this method of analysis a tool is established to understand the current state of the cause.
According to Goldratt the process starts by listing all the current undesirable effects that exists. Taylor (2003) states that the current reality tree âdoes not focus on the severity or the ranking but on the effect-cause-effect relationships of the list of UDEâsâ. The next step is to find a cause and affect relationship between at least 2 of the undesirable effects that form part of the list. When the relationships are completely mapped, it is possible to identify the one core reason or problem that was under control of the facility.
It is clear from the current reality tree that the core problem reflected âmanagers are using local optimaâ Goldratt, (p.158). It is evident that managers are in a conflicting position that is preventing them from doing the things that is right for the business. In order to correct this, it is imperative to clarify what the right thing to do is and what prevent them to do the right thing. The answer to the âbreakthrough solutionâ must be strived for. One of the conflicts that stood out in the examples was âconsider the clientsâ perception of valueâ versus âconsider the suppliersâ perception of valueâ. In order for managers to conclude good decisions they must âconsider the need to get enough salesâ. Goldratt (p.160). This must be the mindset of managers not only on top levels, but on all levels. Furthermore, managers must âmake decisions and act upon the clients perception of valueâ before they can âconsider the need to get enough salesâ Goldratt (p.161). Goldratt further states that âin order for managers to arrive at good decisions they must consider the need to get reasonable product marginsâ. He went further and argues that âin order to consider the need to get reasonable product margins managers must make decisions and act upon supplierâs perception of valueâ.
A dilemma, according to Goldratt, exists when the clientâs perception of value of a product is significantly less than that of the supplier. In order to correct that, managers are required to take actions that sufficiently increase the perception value the market has for the companyâs products. In the example of the printing company, the increase of sales potential will only be realized after the increase in the perception of value of the market for Peteâs products. In that case, Pete realized that to drastically change the perception of the market, he only has to change the section of the offer that is not the product itself and not the physical product. Sometimes this is possible with almost zero additional investment and normally it is fairly instant and quick to change.
The future reality tree is a logical justification of how the proposed solution ideas will be effective in bringing about the desired effects and strategic objectives. Each