The Goal

DW: Why? What kind of help were you looking for?

AV: Let me put it this way. I was literally sitting in my office, with mv head in my hands, highly frustrated, with piles of paper all around me, going through correspondence. I opened a letter, saw that it was another invitation to a course, threw it away, and as I threw it in mv wastepaper basket my eye caught the price of this particular course. It was the South African equivalent of about $18,000. That caught mv attention. I thought if any course was worth that amount it was worth looking at. This was a two week course in production management, the invitation was addressed to the engineering faculty. It had gotten to the medical faculty by mistake. The course was actually offered free to university professors. So because of my deep frustration with some of the management issues I had in my department, and because I had some time off the next week, I phoned. I pla

DW: But you went?

AV: I went the first week. The course was taught with reference to a production environment and the logic around it. Now you don't find much of this logic-the reality trees and that sort of thing-in The Goal.

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Quite a lot of that is in It's Not Luck, which was published later. But the logic grabbed me because I was this frustrated man who was run- ning a department of medicine and I had not been trained to do that. I had no insight into management issues. Suddenly I saw that here was a potential way of analyzing my department.

DW: What were the parallels?

AV: My department was in chaos, total chaos. Everything coming and going, not knowing what was what-much as things were in the factory that is the setting of The Goal. During the course, The Goalwas mentioned. I bought it, read it through in one night, and I thought to myself, that's my environment. A chaotic system is not necessarily a factory. It could be a hospital with people coming and going. It could be a department with a whole lot of prima do

Now if I can answer your question a bit more precisely. When one is introduced to theory of constraints, the first thing you see is a system where the causality is hidden. In other words, it's chaotic. Things happen, you have no control. Suddenly, though, it becomes a system that can be analyzed in terms of certain key points-leverage points. And one learns that addressing these key points-rather than launch- ing a symptomatic firefight-is the way to exert control over these systems. Remember, this was in the early 1990s, before frameworks like systems theory had moved to the forefront and become part of the main buzz. Though the theory of constraints doesn't talk about systems theory, already it was offering an approach by which a com- plex system could be managed in terms of a few key leverage points.

DW: Did you wind up attending both weeks of the course?

AV: Correct. Then I came back to the hospital. There are two points I want to make. The first was that I underwent a mental change. In- stead of thinking that things were too complicated, too complex and not manageable, I now saw that if I could analyze the system cor- rectly, it was manageable. That was the first important breakthrough that I had, and many people I've taught this to subsequently have had the same breakthrough. There is a way-find it!

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Second, our outpatient clinic, like most hospital outpatient clinics at that time, and even now in many parts of the world, was plagued by inefficiencies and long waiting lists. The more we fought the ineffi- ciencies, the more money we poured into the system, the longer the waiting lists seemed to become. This is the problem with the national health system in Britain as we speak. Now in my department, it seemed to me as though the processing of patients by doctors could really be viewed as a production line, just as in The Goal. The times are differ- ent, and obviously people aren't machines. All of those issues I ac- knowledged. But I saw that parallel.

DW: How did you attack the problem?

AV: The manager in charge of that clinic and I sat down and I told her about the principles used in The Goal Between the two of us-with her doing most of the work-we identified our constraint. We realized that we lost a tremendous amount of capacity whenever patients or doctors wouldn't show up for scheduled appointments. That time lost was not recoverable. So we developed a call-in list, which we called the patient buffer. A day or two before a scheduled appointment we would phone patients and make sure that they would be coming into the clinic. If not, we would find substitute patients. The result was less loss of capacity. Our waiting list at that time was about eight or nine months long, which is common for this type of waiting list. As a mat- ter of fact in the UK now some of these waiting lists are over one year. In about a six month period we got our waiting list below four months, which was roughly half of what most other hospitals were doing in South Africa at that time.

DW: Yours is a public hospital?

AV: Yes, we're part of the state health system. In other words, not for profit. Patients pay only a small amount for services. Later on, after I started consulting with the Goldratt Institute in South Africa, we looked at a large private hospital, 600 beds, a flagship hospital with neuro- surgery and all the high-tech stuff. The issue there was loss of capac- ity in the operating rooms. The spin-off effect of that was that sur- geons were leaving the hospital and going to other private hospitals. It was a serious situation. We found that instead of focussing on local optima-making sure that my little department comes first-the real

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question people should be asking is, what can I do to achieve the larger goal of the hospital, which is to throughput new patients? It's a simple concept but implementing it took about two months of meet- ing with staff. Each person then developed an action plan aimed at making sure more patients moved through the system more efficiently. In a period of a year, this hospital moved from a 20% shortfall on its budget to where it began showing a profit.

DW: So you've become a Goldratt consultant yourself?

AV: Yes. I presented the results from our hospital's outpatient clinic at one of the Goldratt symposia in the early 1990s. This was the first report of a medical implementation of the theory of constraints. Eli Goldratt was there to hear my presentation, and afterwards he in- vited me to join the Goldratt Institute as an academic associate. I was based at the university but involved in the implementations of his consulting company. I did quite a bit of work in the mining industry- nothing to do with medicine! It was pure theory of constraints, straight out of the book. It allowed me to develop my own skills.

DW: What's a doctor doing advising mining companies?

AV: It's interesting that you say that. I'm a physician, not a surgeon, In other words I'm a thinker, not a doer. I say that facetiously but as a physician, it's all about diagnosis. And the whole process of diagno- sis, whether it's a patient or an organization, is the application of the scientific method. Eli Goldratt says that his theory of constraints is simply the application of the scientific method. So it's almost natural that an advisor to a mining company-in terms of diagnosing what's wrong and what to do about it-could be a physician. In fact some of the teaching materials that the Goldratt Institute uses refer to the medical model. It asks trainee consultants, How does a doctor ap- proach the problem? It gives them a parallel for how you diagnose problems in organizations.