Distribution & Supply Chain, as Taught by Eli Goldratt
Seven lessons that follow Eli Goldratt's analysis of distribution and supply chains. You follow Karan, a distribution head who asks the oracle for a better forecast, and Mrs. Fernandes, a shopkeeper who just wants to sell what her customers ask for.
- 7 lessons, about 144 minutes in all
- Free, no sign-up. Your progress is saved in this browser
- Certificate of completion when you pass all seven quizzes
- 1 The distribution challengeWhy does distribution exist at all, what limits its throughput, and why does every company end up with too much stock and too many shortages at the same time? Goldratt's opening: the constraint is the customer who walks in, and the conflict is protect sales versus hold less. 16 min
- 2 How much inventory should a point hold?Mrs. Fernandes sells about four water heaters a week, and replenishment takes a month. Follow her through a few weeks and derive Goldratt's formula for the inventory target, then see why replenishment time is the factor that matters most, and how batching inflates it. 22 min
- 3 When inventory hurts salesOfficial reports show two or three percent shortages; the real figure is often above twenty. And the stock meant to protect sales can itself destroy them. Goldratt's case for breaking the link between “protect sales” and “hold more inventory”, and why the three obvious ways to break it fail. 16 min
- 4 The plant warehouseIs a forecast equally accurate everywhere in the chain? No: it is far more accurate where demand from many points adds up. So, against every instinct, hold most of the stock at the source. Karan's sceptical conversation with Ruth, step by step, and a quick check of whether a company has really implemented it. 24 min
- 5 Order daily, replenish frequentlyWhy don't regional warehouses simply order every day what they sold that day? Karan raises every objection; Ruth answers them. Then the mechanism that replaces the forecast: inventory targets watched through red, yellow and green zones, raised and lowered by a full zone at a time. 22 min
- 6 Shops, slow movers and seasonsPoints of sale bring their own considerations: display, and suppliers who prefer to push. Then a marketing opportunity hidden in “customer tolerance time” that turns slow movers into made-to-order, and what fast replenishment does to promotions, seasons and new product launches. 18 min
- 7 Measuring and synchronising a supply chainMeasure execution by what wasn't done right: throughput-dollar-days and inventory-dollar-days. See what they do to suppliers, to a plant's scheduling, lead times, set-ups and quality. Then Goldratt's rules for a supply chain of separate companies, why internal profit centres make things worse, the checklist, and the results to expect. 26 min
- ✓Your certificateUnlocks when all seven quizzes are passed.
This course pairs well with TOC in Distribution & Supply Chain, which covers the same solution in implementation detail. The ideas belong to Dr. Eliyahu M. Goldratt and Avraham (Rami) Goldratt, who taught them in their TOC Insights programme and the Goldratt Satellite Program broadcasts. The story, the characters and the wording are mine; this is an independent course, not a product of the Goldratt organisation.