From this pool of CEOs possibly will come five-at the most ten-companies who will actually implement the TOC. They must show phenomenal results-in double-quick time, days, weeks, not months-which will then be showcased to Indian industry and which in turn, will ignite a movement.

But for that first, Eli Goldratt must convince the Indian CEO that he is following the wrong assumptions and two, show how his TOC canhelp realign the organisation to the right assumptions. Peering hard at a CEO, says Goldratt: ``If you think I will flatter you, you better leave.''

But then, he gives them a reason to stay, by illustrating the TOC's holistic approach through a `simple' example: the worldwide steel industry. Says Goldratt: ``Most steel mills have so much finished goods capacity that they have more rust than net profits.''

According to Goldratt, four chronic problems experienced in the steel industry are: logistics (inventories are too high); service (there are too many customer complaints); finance (too long pay-back periods); and people (bad internal human relationships).

Surprisingly, says Goldratt, there is just one common reason for all the problems: for a long time, the steel industry has used tonnes per hour as the prime operational measurement.

So, as most people behave in line with the way they are measured-individual departments try to maximise their performance as measured by tonnes per hour. Clubbed withthe fact that in most departments some items require less time to produce per tonne than others, there is one unavoidable result: to maximise their performance of tonnes per hour in a given measurement period, departments in a steel mill tend to produce the fast items at the expense of the slow ones-which is bound to lead to customer complaints.

Goldratt then turns to another fact: non-production results in zero tonnes per hour. So now, departments, in order to maximise their performance of tonnes per hour, tend to produce stock for even when there is no market request for the short or medium horizon! Net result: inventories start to pile up.

Meanwhile, as every additional set-up reduces the measured tonnes per hour-another fact-to maximise their performance of tonnes per hour, departments tend to pull ahead orders that enable increasing a batch size. Net result: inventories rise further.

Typically, a steel mill is what Goldratt classifies into one of four categories: a V-plant, that is, one whichproduces items through a process having many divergent points. So, once again, to maximise their performance of tonnes per hour, departments start taking actions which result in, what Goldratt mercilessly calls, ``stealing''.

Says Goldratt, ``It's not about someone sneaking out of the shopfloor with a tonne of steel in his pocket. Instead, `stealing' refers to the foreman who wants to look good against the prime operational measurement of tonnes per hour, and therefore diverts production to suit that end.''

Any surprise then that the average inventory of steel mills is a quarter million pounds? Delivery of plates takes as long as eight weeks? Over 90 per cent of customer complaints are on delivery? And that these are exactly the same performance benchmarks that the steel industry operated on one hundred years ago?

Why does this vicious cycle repeat itself-across industries, across companies? Says Goldratt: ``To be a good manager, a manager tries to constantly fight to reduce waste. And because hebelieves that a resource standing idle is a major waste, he uses efficiencies as a prime measurement. On the other hand, to be a good manager, he also constantly fights to increase the flow of production through his shopfloor. But to do that he cannot use efficiencies as a measurement. The problem therefore is a conflict between two necessary conditions.''

The core problem of operations, according to the holistic approach of the TOC is thus the erroneous assumption that: a resource standing idle is a major waste. That's one key assumption that the TOC CEO must first be rid of.There is another. Once again, to manage well, a manager tries to control cost. But because he assumes that local impact is equal to impact on the organisation, he judges his actions according to the local impact.

On the flip side, to manage well, he tries to protect throughput. But because here the local impact is not equal to the impact on the organisation, he cannot judge according to the local impact. Again: a conflict between twonecessary conditions.

In this case, says Goldratt, the core problem of organisations is the erroneous assumption that a local impact is equal to the impact on the organisation. That's the second key assumption that the TOC CEO must forget.For, the physicist in Goldratt is clear: in physics, there are no conflicts in reality, only erroneous assumptions that lead to differences in what we perceive as reality. Says Goldratt: ``As a CEO, you have to take the active action to force most of your resources to stand idle from time to time -- or go bankrupt.''

Then he adds: ``If you understand that, you can start looking for phenomenal results.'' And that, for the CEO, makes perfect sense-even commensense, which as Goldratt is quick to quip, is seldom common.