The AGI "Know-Why" behind the Thinking Processes

1. Introducing Jonah’s
Thinking Process
The AGI “Know-Why” behind the
Thinking Processes

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
Introducing Jonah’s Thinking Process
ALEX ROGO JONAH
How does Jonah know?
How does he do that?
The AGI “Know-Why” behind the Thinking Processes

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
We, at the AGI-Goldratt Institute, consider that two types of knowledge are necessary to
really excel in business today; "Know-How”, doing the things right, and "Know-Why”,
doing the right things. The Know-How element focuses on the ability to integrate, align
and manage systems and sub-systems, and are addressed in our Advanced TOC
implementation programs.
The Know-Why element is important to understand the cause and effect that really
governs your systems. This knowledge creates the ability to link the changes made by
applying the Know-How to the results, or effects, that the changes create. Quickly
diagnosing any unforeseen issues or adapting to meet differing conditions - without
jeopardizing the improvement - is achievable.
The Jonah Program® for Operations is the AGI Program that provides this ability. As
you've read in the book, The Goal, the term ‘Jonah’ is the name of the character that
leads Alex and his production team to think about their business, and what they should
measure that drives decisions that are aligned with the goal of the business. This
program is so-named because it imparts the details of how Jonah actually thinks though
problems.
Enjoy the following Thinking Processes rendition of the conversation between Alex Rogo
and Jonah. Then, learn how to think through problems like Jonah to excel in business
today. We look forward to hearing from you soon!

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
The story through the eyes of Jonah
Predicted Effect (aka ECE)
Cause
Effect E2
E1
C
(Speculate)
Note that the cause (C) must both:
1. Exist, and…
2. Lead to another verifiable effect (E2)
Really?!…36%
more money from
installing robots??
No, not profit,
just in a
certain area.
Alex claims that robots
significantly improved the
productivity of his plant.
Effect
Alex knows
what he’s
talking about.
Speculated Cause
Robots significantly
improved the productivity
of Alex’s plant.
Predicted Effect
For example…
4

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
Validating the Speculated Cause
Alex knows
what he’s
talking about.
Alex claims that robots
significantly improved the
productivity of his plant.
Robots significantly
improved the productivity
of Alex’s plant.
“Have you sold more
product from your plant
because of these robots?”
Double Check!
No, Throughput
(sales) did not
increase.
5

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
Alex knows
what he’s
talking about.
Alex claims that robots
significantly improved the
productivity of his plant.
Robots significantly
improved the productivity
of Alex’s plant.
“Have you reduced
operating expenses in
your plant?”
Double Check!
No, Throughput
(sales) did not
increase.
No, Operating
Expenses did not
decrease.

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
Alex knows
what he’s
talking about.
Alex claims that robots
significantly improved the
productivity of his plant.
Robots significantly
improved the productivity
of Alex’s plant.
“Did your inventories go
down?”
Double Check!
No, Throughput
(sales) did not
increase.
No, Operating
Expenses did not
decrease.
No, Inventory did not
decrease.

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
Alex knows
what he’s
talking about.
Alex claims that robots
significantly improved the
productivity of his plant.
Robots significantly
improved the productivity
of Alex’s plant.
Efficiencies? Why
was your business
created…to show off
its efficiencies?
Double Check!
No, Throughput
(sales) did not
increase.
No, Operating
Expenses did not
decrease.
No, Inventory did not
decrease.
But my price per part
has gone down and
my efficiencies are
up…

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
Alex doesn’t
know what he’s
talking about.
Alex claims that robots
significantly improved the
productivity in his plant.
Robots did not improve
the productivity of Alex’s
plant.
Throughput (sales)
did not increase.
Operating Expenses
did not decrease.
Inventory did not
decrease.
Plant efficiencies did
not go up.
Alex claims that
efficiencies went up.
Alex claims that
efficiencies went up
when they didn’t.
Alex claims that robots significantly
improved the productivity in his plant
when they didn’t.
Alex claims that
costs went down
when they didn’t.
Alex claims that
costs went down.
Speculate
…If -Then

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
Alex claims that
efficiencies went up
when they didn’t.
Alex claims that robots significantly
improved the productivity in his plant
when they didn’t.
Alex claims
that costs went
down when
they didn’t.
Alex runs his plant striving to
achieve local optima!
It’s local efficiencies
that are important to
Alex.
It’s the local notion of
“cost-per-part” that is
important to Alex.
Alex tries to run all of his
resources constantly.
Material is released
just to supply work to
resources.
Many common
materials exist in
almost every plant.
Material is ordered
according to
expected demand.
Purchasing
frequently faces
material shortages.
Work-in-process
inventory is too high.
Finished goods
inventory is too high.
Purchasing will increase
the levels of raw material
and purchased parts
inventory.
Alex tries to save
set-ups.
Large
batches are
run to “gain”
low cost per
part.
Satisfying
demand for small
quantities is
delayed.
So why is
Alex saying
that… and
what’s his
plant like?
Alex doesn’t know what he’s talking
about.

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
Work-in-process
inventory is too high.
Finished goods
inventory is too high.
Purchasing will increase
the levels of raw material
and purchased parts
inventory.
Satisfying
demand for small
quantities is
delayed.
“All material inventories are
going through the roof, are
they not?”
Sifting what should be done to
satisfy near due-date customer
orders is mainly achieved
through (formal and informal)
expediting.
“Customer orders are always
late, can’t ship anything on
time!”
How does he
know…??
“Tell me,
Alex..”
© 1991-2013 Avraham Y. Goldratt Institute, LP.

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
The Categories of Legitimate Reservations
Tools for Rigorously Constructing and Scrutinizing Cause-and-Effect
This reservation is very powerful for
• Substantiating the existence of intangible entities
(Entity Existence), and
• Validating causality (Causality Existence).
• Proving there is no causality by showing the
absence of a predicted effect.
Sales are
going down.
The market’s taste
has changed.
When the existence of a causal entity is difficult to check directly, its existence can be
substantiated by showing a different, directly verifiable effect, that must also be a result of the
entity in question.
Sales are
going down.
The market’s taste
has changed.
There is a comparable
increase in the sales of
an alternative product.
Does it exist?
*One of the tools in Jonah’s
toolbox for constructing logic
to understand the causal
connection between the root
cause and observed problems.
Predicted Effect
Existence
Reservation*

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© 1993-2013 Avraham Y. Goldratt Institute, a Limited Partnership. All Rights Reserved.
You can know like Jonah. Learn to use all the tools of Jonah.
For more information on attending AGI’s Jonah Program®, please visit us on
our website at www.goldratt.com/criticalthinkingprograms.shtml.
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Questions? Please contact Ms. Robbin Seipold, Director of Client Services,
at robbin.seipold@goldratt.com or by telephone at (203) 624-9026, ext 306.
We look forward to hearing from you soon!
The goal of an organization (for profit or not for profit) is
not to show off its efficiencies.