The Goal by Eliyahu Goldratt

The Goal (of a manufacturing company) to make money; everything else is a means to achieving the goal (i.e. produce products to make money) Reworded: The goal is to increase net profit, while simultaneously increasing oth R!" and cash flow Measurements which express the Goal (pgs 60-6 !" #. Throughput the rate at which the system generates money through sales $. #n$entory all the money that the system has invested in purchasing things which it intends to sell %. %perational Expense all the money the system spends in order to turn inventory into throughput &"deal 'ituation Throughput increases simultaneously with decreasing "nventory and !.(. Two phenomena in a plant (pgs &'-&&!" #. (ependent E$ents an event or a series of events must take place efore another can egin)the su se*uent event depends upon the ones prior to it $. )tatistical *luctuations when information changes from one instance to the ne+t Two types o+ plant resources (pgs ,&- ,-!" #. .ottlenec/ 0esource any resource whose capacity is e*ual to or less than the demand placed upon it $. 1on,bottlenec/ 0esource any resource whose capacity is greater than the demand placed on it &-./.01( 2/!3, 0!T 1.4.1"T5 make flow through a ottleneck e*ual (a little less than) to market demand 6The capacity of the plant is e*ual to the capacity of its ottlenecks.7 To optimi2e bottlenec/s3 you must (pgs 4&- 4-!" 5 Ma/e sure bottlenec/ time is not wasted a. 'itting idle during lunch . 3orking on defective parts c. 3ork only on the parts you need $. Ta/e the load o++ o+ bottlenec/s and gi$e it to non-bottlenec/s a. !utsource to another company . !ther machines can do it 6. plant in which everyone is working all the time is very inefficient.7 (pg. $89)
(. :oldratt;s The Goal 0otes compiled y :ina 1arlier 4age 1 of 2

*our elements o+ time a material spends in a plant (pgs 6, -6,6!" 5 )etup 65 7rocess ,5 8ueue (large! 95 :ait (large! 7rocess o+ on-going impro$ement (pg ,0'!" )tep Identify the system;s constraint(s) )tep 6 <ecide how to exploit the system;s constraint(s) )tep , Subordinate everything else to the a ove decision )tep 9 Elevate the system;s constraint(s) )tep 4 Warning!! "f in the previous steps a constraint has een roken, go ack to )tep , ut do not allow inertia to cause a system;s constraint Example +rom The Goal
Define Goal Define Measurements Determine Bottlenecks Relieve stress from bottlenecks and increase productivity of bottlenecks Increase Sales Cut batch si es in half Reduce lead times

#+;Then relationship based +rom science research (pgs , '-, &!" #. $. %. >. If the hypothesis is right, then logically another fact must e+ist =erify whether or not the predicted effects do e+ist !rder is uilt on chaos 'ocratic method

< good manager needs to be able to answer , =uestions (pg ,,'!" #. 63hat to change?7 $. 63hat to change to?7 %. 6@ow to cause the change?7 The layers o+ resistance to change (pgs ,9--,40!" >ayer raising pro lems have one thing in common)it;s out of our hands >ayer 6 arguing that the proposed solution cannot possi ly yield the desired outcome >ayer , arguing that the proposed solution will lead to negative effects (6yes, ut)7) >ayer 9 raising o stacles that will prevent the implementation >ayer 4 raising dou ts a out the colla oration of others (or worse, not raising their dou ts)

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4eeling, in se*uence, all these layers turns resistance to change into the enthusiasm of an inventor

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The importance o+ not neglecting a relationship 60othing neglected will remain as it was or is, or will fail to deteriorate. .ll things need attention, care and concern, and especially so in this most sensitive of all relationships of life.7
(. :oldratt;s The Goal 0otes compiled y :ina 1arlier 4age 2 of 2