THE GOAL – A PROCESS OF ONGOING IMPROVEMENT

THE BOOK IN BRIEF Alex, the main character in the story is the plant
manager at UniCo, is about to get his transfer back to
S ince its first publication in 1984, this book has
successfully inspired an industry to move
his hometown, some difficulties come up in his
factory where he works and there are chances of the
towards continuous improvement.
factory might getting shut down.
The fascinating part about this work is the attention-
Their shipments are late leading to increase in
catching idea of the writer to write a document for
production backlog and inventories are increasing.
the betterment of the industry in the form of a novel.
All this has further led to degrading the shipment
Although the book covers the concepts like quality with increasing costs.
throughput, efficiency, and revenue which come in
He is determined to solve the issue however he has
the dictionary of operations and production
other priorities including his wife Julie, to take care
managers, the very efficient writing style of the
of. The worsened situation of the factory is testing
writer to present it as a story makes this novel apt for
Alex not just professionally but also personally by
all readers ranging from college students like us to
impacting his married life.
people aspiring to become CEO or the CEOs
themselves. With the mammoth challenge of reviving the factory,
Alex refers to his old Physics professor, Jonah, and
The book is able to present the cases which can be
discusses with him the situation who not only gave
studied to apply in real-life situations as they
him some direction but also challenge him to change
highlight the learnings on which the real world
his views on the meaning of goals and productivity.
works.
Although the story ends with all positives, Alex
We shall see in the later review of the book how
being able to ship orders on time by improving the
characters have been shown thinking logically and
flow of productivity, the way they achieved it is
with a rational view to work on the solution of the
important.
problem at hand.
How he understood the constraints so well, and how
The story has been beautifully written by the writer
he managed them so well to achieve growth and
to give a solution to factories struggling with
regain profitability is something the author wants us
deadlines management, delays, and low sales and
to focus on.
revenues.

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 THE GOAL – A PROCESS OF ONGOING IMPROVEMENT

As a plant manager, one must be thinking that
making the processes more streamlined, reducing the
uncertainties and de-bottleneck areas of constraints
with a capitalist mindset is the goal, however, the
book reduces the goal to the simple purpose of
making more and more money.
Another very key learning from the story is the way
emphasis has been put on the importance of focusing
on the process and making improvement a part of
that ongoing process instead of a goal.
MAJOR PLOT
Mr. Alex Rogo, a competent Engineer with ambition
manages the plant at UniCo Manufacturing
Corporation. One morning he reaches the office to
find out his parking lot has been taken by division VP
Mr. Bill Peach. Later things get more serious
between the two for the discussion of order #41427
which is seven weeks pending. For a plant manager
that is something very shameful. Agitated and
furious by this Bill gives Alex an ultimatum of 3
months to bring things back on track else the factory
may shut down.
This takes a toll on Alex’s confidence showing how
complex plant production operations are and how
tough it becomes to manage the uncertainties and
other bottlenecks. How critical it is to maintain
efficiencies to not only produce as per requirement
but to also ship on time.
The story shows how the work pressure is affecting
Alex’s personal life by depriving him of spending
time with his wife, who is already sick of the
monotonous small-town life.
Although he manages to get the order delivered and
work on solving the other delay issues, the story
reflects on the mismatch of MIS systems and actual
profits, highlighting some red flags for industries,
managers should keep a check on.
The story continues to show the headaches of
managers who are faced with highly ambitious
production/ sales targets because of poor financial
performance which not even puts all the systems in
exertion but also puts a grave threat to the existence
of the organization itself.
The results of these are high-voltage team meetings
and highly stretched quarter targets.
Attending one of such meetings Alex recalls his
bumping into his old professor, Jonah at the airport
who very surprisingly with his knowledgeability
predicted this problem of high inventories and
missing deadlines of Alex’s company.
At times managers are so used to formalities that they
forget the main purpose of their work. The ultimate
goal. The author very beautifully hints the reader to
break any real-life case problem by pondering on the
simple question- What is the real goal?

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 THE GOAL – A PROCESS OF ONGOING IMPROVEMENT
Although Alex in the story limits it to making money
which was very rational seeing his situation, the goal
can be anything and whatever brings you closer to
that goal is very productive rest all falls under non-
productive.
Later in the story getting inspiration from his
professor Jonah’s challenging questions, Alex looks
at the situation from a more positive perspective and
identifies the key deliverables as increasing cash
flow, RoI, and net profits. Which can be extended to
any real-life scenario.
Sometimes at work, we skip the difficult moments.
Avoiding your manager from discussing targets and
sharing progress is one of them. Though it seems
easy however it adds nothing to progress. Alex
understands the same and tries to work with his
division VP Bill Peach.
The author very subtly gives three terms that can be
extended to anything work we do in life.
"Throughput is the rate at which the system generates
money through sales." "Inventory is all the money
that the system has invested in purchasing things
which it intends to sell." "Operational expense is all
the money the system spends in order to turn
inventory into throughput."
Alex, later on, applies these three learning and found
that robots have led to cause the issue by increasing
the operational expense with inventory and
throughput being the same
Later on, Alex shares the reviewed meaning of the
same in the organization generating some doubts but
still everyone tries to work on the approach.
The author challenges the plant managers notion of
efficiencies and forces them to take a balanced look
at dependent events and statistical fluctuations.
The author tries to explain the effect of fluctuations
on the dependent events and how difficult it becomes
to cover up the effect of fluctuations by the last event.
The story emphasizes the importance of maintaining
the balance between personal and professional life as
Alex struggles to give time to his wife which not only
jeopardizes his personal relationship but can also
severely impact his work performance.
In the office, Alex with his learning of dependable
events and fluctuations manages to complete the due
orders and gains the trust of the team.
Later on, sharing another important concept of
bottlenecks, the story shows why it is important to
solve and identify bottlenecks to solve the flow of
products in the plant.
The author explains that to increase the overall
capacity it is important to increase capacity at
bottleneck operations and true opportunity costs lie
there just as in the case of the story existed at NCX-
10 and heat treatment machines.
Apart from working on the bottlenecks, it is also
important to work out the priority sequencing of
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other areas which not only increases the capacity as
a result of de-bottlenecking but also streamlines the
process.

Managing the constraints also adds to overall

efficiency as it helps to dedicate time to other
productive areas.

All these efforts add to the increased flow of the

process. Scenarios were shown where troubles can
also arise because of improper prioritizing of non-
bottleneck processes. The author shows how
matching the supply of both processes is important
to keep the supply going and how it can reduce the
issue of accumulating inventories.

Later on in the story, Alex is shown to be presented

with another challenge of increasing the production
by 15% more to keep his plant open. The story goes
on to show how Alex changes the market strategy to
create higher demand. The effect of smaller batch
size to achieve faster response time and short order
times is shown to create impact.

All these strategies helped Alex in reaching his

targets and further promoted to Division VP, to head
the three factories however the issues put a light on
the accounting methods practiced in the industries.

The author through the story devises the Process of

Ongoing Improvement

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THE GOAL – A PROCESS OF ONGOING IMPROVEMENT

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