Summary of the Book
The book “Isn’t It Obvious?” by Eliyahu Goldratt gives a detailed analysis of a company that is struggling to tackle its problems and realize the targeted goals. One outstanding fact about the company is that they have a Jonah (or the goal). In order to emerge successful, the company must address most of the retail issues such as inventories, partial orders, and controlling base costs. In an attempt to drive the story, the author uses the theory of constraints (TOC) throughout the book. The flooding of the firm’s warehouse is identified as an adversity in the book. The characters such as Cara, Paul, and Roger from the family have to identify new strategies to pursue their business goals.
The book is based on a family business. The author indicates that there are numerous unforeseeable problems in one of the business’ regional outlets. The occurrence of such hurdles forces the characters to think differently in order to transform the situation. Consequently, the operating principle or philosophy of the retail business is changed. The existing paradoxes in supplier’s operations and business strategies are dealt with in a competent manner. Henry, who is the co-owner and president of the company, offers powerful insights to transform the company. Although he is about to retire, Henry believes strongly that the core problem affecting the company’s supply chain and inventory should be addressed. He goes further to describe how the failure to deal with problems can affect the improvement process.
Using correct assumptions, discussions, and invaluable knowledge gained from their experiences, the family members review the paradoxes and eventually identify the best approaches to conduct business in an environment that is characterized by numerous challenges. The members of the family eventually transform the manner in which inventory is done at the company. By so doing, the individuals manage to come up with a competitive edge that has the potential to drive performance at the company.
Five Quotations from the Book
- “The store always had a wide variety of goods, and he had worked hard to have a beautiful display maintained at all times” (1).
- “Risk losing sales or risk surpluses? This dilemma was drowning him” (2).
- “The most important lesson I learned from my dad was that getting medals that you didn’t earn, didn’t really earn, is the most damaging thing to yourself, to your self-esteem, to your integrity” (8).
- “You changed a conservative and large company like ours and you have done it so quickly and so smoothly” (121).
- “Reducing surpluses enables much better display and a jump in product portfolio” (137).
Five Scenes from the Book
The first interesting scene from the book occurs at the very beginning when an elderly lady visits the store to purchase a tablecloth. Paul realizes that the store did not have enough stock to cater for the needs of the targeted customer. According to the scene, the elderly woman is not ready to accept anything else apart from the required maroon tablecloth. Paul is forced to order the product from a local competitor in order to address the client’s needs. This scene gives a true picture of the unique roles of inventory and warehousing. In order to turn things around, the company should consider the issue of stock turnover. The company’s display has always been maintained but fails to resonate with the needs of the customers.
The second outstanding scene takes place in chapter seven when Paul approaches his wife, Cara. The lady states categorically that she was not able to manage the company alone. His father had always led the company and managed various activities such as logistics, store layout, and marketing. Cara was only conversant with purchasing. The conversation goes further to indicate that the firm’s president should know more than just purchasing. A holistic view of the entire system is what can make someone a strategic leader. This scene shows conclusively that leaders should be able to monitor logistical operations, make accurate purchasing and ordering decisions, consider inventory, and promote the marketing process. These aspects are critical throughout the supply chain management.
Another important scene takes place when Roger informs Paul why there were some available items in the stores. Paul realizes that Roger was focusing on the concept of inventory seriously. The bookkeepers and store managers were unhappy with Roger. However, he explained that the issue of inventory was supposed to be taken seriously. The presence of residues was also related to improved sales. This scene explains why the issue of inventory should be taken seriously in order to ensure the targeted products are available to the customer at the right time. The approach can be used to promote efficiency and utilize store space wisely.
Additionally, the practice can support what supply chain managers call Spend Analysis. This kind of analysis guides store managers to order and pay for the required products. Budgeting should also be done in order to minimize wastes and promote pricing.
The next scene occurs in chapter eighteen when Roger, Cara, and Paul agree that the best way to deal with the blockage affecting the firm is to focus on the issue of inventory. The firm was using ineffective solutions to tackle most of the existing challenges. The scene shows clearly that there was a wrong connection between the inventory and forecasting. Before holding inventory, the scene shows clearly that it is necessary to examine the needs it should satisfy. This means that holding on to the inventory while at the same time failing to address the existing needs of the consumers can be erroneous. That being the case, the scene explains why inventory should be managed properly in order to ensure it supports the targeted sales. By so doing, the approach can minimize business costs and maximize profits.
Another important part of the book is the fourth step of the retail process. The narrator indicates that reducing shortages in a store is something that eventually maximizes customer satisfaction. Surpluses should also be minimized in an attempt to manage display and promote product portfolio. The strategy makes it easier for the firm to adjust prices and products depending on the needs of the customers. The approach results in client loyalty.
More customers will eventually visit the shop and make it successful. Proper supply chain management will ensure the right materials are ordered are presented to the customer in a professional manner. Unnecessary inventory and display is dealt with in an attempt to maximize sales. This strategy can therefore be embraced by companies that want to drive performance using appropriate supply chain and marketing processes.
Thoughts on the Book
Eliyahu Goldratt’s book outlines a number of evidence-based practices that can guide retailers to realize their business potentials. For instance, businesspeople are encouraged to increase inventory turnover in order to achieve maximum profits. Keeping less inventories and reordering various products are some of the best strategies that can be used to maximize sales. The company shifted its inventory to a warehouse and started to order goods every single day.
The just-in-time (JIT) approach made it easier to address most of the obstacles affecting performance. Goldratt has therefore used a simple story to explain how complex challenges can be addressed used appropriate strategies. It is clear that the author describes vividly how increased inventory turnover can be supported by improved logistics to maximize profits. The simple approach is that businesses can order and sell fast-moving products in an attempt to maximize profits.
Although the book might not be appropriate for professional supply chain managers because of its simplicity, I strongly believe that it can make a difference for small businesses. The chapters and stories are carefully crafted in order to deliver the intended information to the reader. The things to be avoided or done throughout the supply chain management process are described in the book. This easy to read book can present useful insights to individuals who have small businesses. The practical approaches can be applied in different settings in order to support the performance of a company. In conclusion, the book is a brilliant guideline that can support both retailers and small-scale companies. The presented ideas are therefore appropriate for every entrepreneur in the retail industry who wants to drive business performance.