BY SANJEEV GUPTA
Eliyahu M. Goldratt, PhD
1947 – 2011
Eliyahu M. Goldratt, PhD, author of The Goal and
creator of the theory of constraints and critical chain
project management, passed away at his home in Israel
on 11 June. He was an iconoclast who also established
new methods for managing manufacturing, supply chains and projects.
After obtaining a doctorate in philosophy from Bar-Ilan University, Dr.
Goldratt left the academic world to
pursue a career in business. He joined
Creative Output in 1979, which became
the number-six company on the Inc. 500
list in 1984. Its optimized production
technology software was the precursor to
manufacturing and supply chain optimization, which became a multibillion-dollar
industry in the late 1990s.
Dr. Goldratt became recognized as
a business thought leader with his 1984
bestseller, The Goal, which introduced the
world to the theory of constraints (TOC).
It is among Forbes’ list of business bestsellers and is required reading in almost every
master of business administration program,
though the book’s influence is best captured
in a quote from The Economist: “A survey
of the reading habits of managers found
that though they buy books by the likes of
Tom Peters for display purposes, the one management
book they have actually read from cover to cover is The
Goal.” Even though it was privately published, it has
sold more than 5 million copies in 35 languages.
The underlying principle of TOC is that optimizing
local efficiencies creates artificial constraints that prevent
an organization from realizing its full potential. Dr.
Goldratt famously proclaimed that cost accounting is the
“enemy number one” of productivity. By keeping the
focus on the ultimate goal, organizations can increase their
speed and throughput. TOC has been adopted in a wide
array of private and public organizations worldwide.
In 1997, Dr. Goldratt expanded TOC in his book
Critical Chain, which provides the basis for critical
chain project management. Critical chain project management emphasizes resources rather than scheduling
or cost. This methodology is claimed to enable 10 to
50 percent improvement in project speed. Seven of the
eight largest U.S. military air depots reportedly have
used its techniques to improve fleet availability while
One cannot overstate Dr. Goldratt’s influence on
thousands of managers around the world, and it will
only grow with time.
Sanjeev Gupta is CEO of Realization, a critical chain
project management software and services provider in
San Jose, California, USA.