Book Review: Necessary But Not Sufficient by Eliyahu M. Goldratt, Eli Schragenheim and Carol A. Ptak, North River Press 2000, ISBN 0-88427-170-6

Reviewed by: James R. Holt, PhD., PE, Washington State University-Vancouver, 25 Oct 2000.
http://www.vancouver.wsu.edu/fac/holt/

This is Eli Goldratt's clearest story of the Theory of Constraints Holistic Approach-integrating the whole supply chain.

The heroes in this novel are from the software service industry who must provide software to connect the varied company components. The heroes struggle as they try to meet client demands and at the same time provide real value to the marketplace.

In the first chapter, Eli tells why the stock market is so fickled, exposes the results of two breakthrough ideas, outlines the key role of the CEO and clarifies the confusion between pessimism and paranoia. And the chapters accelerate from there.

After the third chapter, you are drawn into the story and forget this really is a systems management textbook. Read carefully to discover:

• Many erroneous assumptions made by management (e.g. Measuring efficiency is good)
• Discover the problems with Finite Capacity Planning (and the solution)
• The full solution for Distribution and Replenishment Systems
• How to synchronize engineering with the rest of the firm (yes, it is possible)
• The terrible effect of Transfer Pricing (nothing is sold until the final customer pays)
• The devastating results of Min-Max inventory policy
• The best use of Dollar-Days
• How to find the next constraint (the one that will hit you in the face as soon as you fix the current one)

Each chapter builds on the understanding of the previous chapters to help the reader see the possible impact of applying TOC to the whole enterprise.

Towards the end of Necessary But Not Sufficient you will find you want to go back and re-read The Goal, and Its Not Luck so you can better understand the TOC applications. That is good, but finish Necessary But Not Sufficient first. The last three chapters outline an "UnRefusable Offer" from the software providers to industry. While Eli intended this offer to be a prediction of the future, it is rapidly happening-its probably in place by the time you read this book review.

James R. Holt, Ph.D., PE. holt@vancouver.wsu.edu
Associate Prof. Engr. Mgmt. www.vancouver.wsu.edu/fac/holt/
Washington State University-Vancouver (503) 618-1867/(360) 546-9638
Link to EM 530 Application in Constraints Management that teaches the principles in Necessary But Not Sufficient.