Goldratt’s “The Goal” talks about throughput at any cost (if need be). More or less a business novel preaching insightful truth. Productivity is the act of bringing a company closer towards its goal. If the company’s goal is to make money, then we should focus on increasing throughput, decreasing inventory, and decreasing operational expenses. At the same time, you will find Goldratt saying to use older inefficient methods to increase productivity and throughput to satisfy the customer. It may cost a company more by doing so, The Goal is ultimately to satisfy the customer. even if your costs increase in the short term. Long term is to find a more efficient solution. If the increased demand is a constant, the next step is to remove the bottleneck
Topics:
Bill Haskell considers the following as important: Journalism, price gouging, US EConomics
This could be interesting, too:
NewDealdemocrat writes Real GDP for Q3 nicely positive, but long leading components mediocre to negative for the second quarter in a row
Joel Eissenberg writes Healthcare and the 2024 presidential election
NewDealdemocrat writes JOLTS report for September shows continued deceleration in almost all metrics, now close to a cause for concern
NewDealdemocrat writes Repeat home sales accelerate slightly monthly, but continue to show YoY deceleration
Goldratt’s “The Goal” talks about throughput at any cost (if need be). More or less a business novel preaching insightful truth. Productivity is the act of bringing a company closer towards its goal. If the company’s goal is to make money, then we should focus on increasing throughput, decreasing inventory, and decreasing operational expenses.
At the same time, you will find Goldratt saying to use older inefficient methods to increase productivity and throughput to satisfy the customer. It may cost a company more by doing so, The Goal is ultimately to satisfy the customer. even if your costs increase in the short term. Long term is to find a more efficient solution.
If the increased demand is a constant, the next step is to remove the bottleneck with more capacity giving greater throughput. Oh, and by the way, longer lead times will not solve a capacity issue.
None of this really applies to the argument Senator Warren is having with CNBC’s Joe Kernen about costs and pricing. I have not heard of any increased costs to increase throughput. Everything appears to be in order there. What is happening is some companies are taking advantage by increasing prices or decreasing the product’s quantity in packaging. That is rent taking and the companies are doing it because they can do it. We experienced similar with regard to semiconductors in 2010. They did not really announce it in a civilized manner. “We are increasing prices 20%, take it or leave it.” Rather than get bent out of shape, I said, “ok.”
This was an automotive part which go through extreme testing before usage. Replacing them would take months. You store it away for the future and select an alternative for in the future.
Elizabeth Warren Talks Past Joe Kernen’s Argument Against Her Price Gouging Position, CNBC
Joe Kernen:
“If you lose The Washington Post as a Democrat, you got some serious problems. This is what they said about the price gouging, or the price control legislation. It was really pilloried from both sides of the aisle.
I can paint you a picture how that would work and how it’s worked in the past, where we’ve tried to artificially hold prices down. Competition doesn’t come in. Like if beef is too high, people don’t move the chicken. Competitors don’t come in to undercut where the beef prices are. Nothing works when you try to artificially control prices. It’s just the supply and demand issue. It’s a flawed idea.”
Warren asked Kernen if he had a question or if he was just making a statement. The CNBC host clarified his question was about why Warren would propose an idea like this.
Senator Warren:
“I understand if you want to do a lecture about this, but let’s just start with, where have you been for the last 30 years, as three dozen states have price gouging laws, and they have used them effectively? States like Texas and Florida. They’ve used price gouging laws. Price gouging laws are not price control. Price gouging laws are to say, ‘you know, sometimes markets go off the rails, and when they do, we need some ways to get them back on the rails. We need some curbs on that behavior.’”
Adding . . .
“So, for example, we watched in the pandemic how prices went up for a whole lot of reasons. They went up partly because we had supply chain kinks. We had problems because of the war in Ukraine that cut supplies of certain commodities. And one of the things that happened as a result of that is there were corporations that said, ‘whoa. Now that we have inflation, now that prices are up overall, this is a great opportunity for us to raise prices, not just in passing along costs, but to go way, way, way above that.’ And how do we know that it was way, way above just passing along cost. Look at what happened to their profit margins.”
Warren then said companies in concentrated industries, including the egg sector, raised their prices to boost profits rather than pass along costs. Kernen attempted to chime in to refute Warren, but she talked over him.
Kernen then brought up how Warren has alleged Kraft-Heinz “increased profits by 448% in 2022.”
Saying . . .
“Kraft, you say, was 440% profit increase. The example you used, the prior quarter from the year before, they had a charge of 1.3 billion dollars, an accounting change, which wiped out profits,” he said.
Warren talked over the CNBC host again, and he asked her to let him complete his thoughts.
“You didn’t let me finish. Look at the data. Come on. We have economic study after economic study,” she said.
Kernen said later.
“This is the way you never lose an argument because no one can ever say anything back to you, Senator. It’s frustrating,”
Warren also became frustrated with Kernen during the debate for talking over her.