Summary of Goal (a process of ongoing improvement)

Goal is a business novel written by Eliyahu M. Goldratt & Jeff Cox, in this novel the Author introduces
the "Theory of Constraints" (TOC).The main character in the story is "Alex Rogo", a plant manager.
Who has a target of three months to turn the plant profit making otherwise the plant will be
shutdown. Rogo meets with a physicists named " Jonah" Who exposes him the TOC. By applying TOC
you can increase the output of any system, but for that you must know what the real Goal is ,which
you want to achieve. For manufacturing industries your goal is to make profit you should focus on
three measurements Throughput, Inventory, and Operational expenses rather than focusing on
Return of Investment (ROI).

Increase the Throughput while simultaneously reducing inventory and operating expenses to
accomplish the Goal. "Jonah" also told about the dependent events and statistical fluctuations which
will end up with building up inventory in near the bottlenecks in the system if you keep everyone
and everything working at full capacity. So to avoid that run the plant at the speed of Bottleneck and
if possible increase the capacity of bottleneck either equal to demand or a bit less than demand.
Bottlenecks should keep working continuously as it decides the throughput of the plant, All non-
bottlenecks should not work continuously to avoid the building up of inventories you need to figure
out how to release materials at the start of the process so that it exactly matches according to the
capacity of the bottleneck. If you loose one hour on the bottleneck you have lost it forever you can't
get it back somewhere else in the system so keep bottlenecks working. You can reduce your batch
size to increase the throughput by decreasing the inventory levels, it will help you in moving faster
since the time to process a batch will be lowered, your lead time for any order condenses.

There are five important steps to apply TOC.

1.IDENTIFY the system's constraint.

2. Decide how to EXPLOIT the system's constraint.

3. SUBORDINATE everything else to the above decision.

4. ELEVATE the system's constraint.

5. WARNING!!!! If in the previous steps a constraint has been broken, go back to step 1, but do not
allow INERTIA to cause a system's constraint.

Real life example of TOC.

Let's us take the example of airport where we have following work stations (WS)

1. security check at entry

2. Check-in counter

3. Security Check and stamping on boarding pass

4. Scanning of boarding pass at Gate

5. Boarding on bus

6. Boarding on aircraft
The goal is to fly on Time

Lets say Every workstation has a different capacity given below in (person/min)

WS1=3 , WS2=1, WS3=1, WS4=15, WS5=17, WS6=8

As we can clearly see that WS2, and WS3 are having least capacity so more no. Of people will be in
the queue at WS2, &WS3 they are the bottlenecks of the system they decide how many people will
be boarding on the aircraft on time. So if we want to increase the number of people boarding on
aircraft then we need to increase the capacity of WS2, &WS3,that's why you will see that in airport
there are multiple check-in counters and Security check counters to increase the capacity of
bottlenecks which makes the system running smoothly and efficiently. TOC can be seen in many
other places like in five star or any good Restaurants most of the times you will not get a table you
have to wait for some time until the table gets free, same logic is applied here also, bottleneck in this
case is Number of tables in a restaurant, they decide the throughput of the restaurant.