The Goal: A Process of Ongoing Improvement

Executive Summary

“The Goal: A Process of Ongoing improvement” is a book written in narrative form that tells the fictional story of Alex Rogo, a plant manager for UniCo Manufacturing, whose plant is performing poorly and given three months to, significantly improve or face a shut down of the entire plant. This groundbreaking business novel, first published in 1984, gives remarkable insight into the day-to-day life of an operations manager and challenges prevailing business practices and thought processes. The book's authors, Eliyahu M. Goldratt and Jeff Cox, through their colorful story, are able to show how business practices and thought processes have strayed from what they should be. “The Goal” also shows that business thinking based upon too many assumptions that accepted at face value. Basically, people are not questioning the things that they being told are true. In Alex's case, it assumed that if operating costs per unit are down and efficiencies are up then the company is being productive. However, these measurements neglect the bottom line. They should be less concerned with measurements that do not contribute to the success and profitability of the company. Basically what the authors are saying is that managers should exercise common sense in their decisions.In the book, Alex's superiors at the division level of the company concerned primarily with productivity and efficiency of plant operations. Alex's boss, Bill Peach, is constantly harassing him over his plant's productivity and efficiency metrics. UniCo concerned with how the cost per unit produced is increasing and believes that in order for the plant to be profitable it must run its machines at capacity and not have any idle time in labor. Unico's concern over having a low cost per unit is a prime example of how a company's management can lose sight of what is important. In the case of UniCo, what should be important is how much money contributed to the bottom line, regardless of the machine and labor efficiency. This, book also demonstrates how UniCo's view of improvement, as being a reduction in its operating expenses, flawed. Although it is good to reduce costs, it comes at a cost to the company because they are not increasing throughput, which leads to an increase in sales and they unfocused on reducing their inventories, which also provides substantial cost savings. Goldratt and Cox's greatest contribution to the business world is the introduction of the theory of constraints.

I. Introduction

In the brief opening section of the book, titled Introduction, the author prepares the reader for the following text by talking about how the purpose of the book is science and education. The author says that he believes that the original meaning of these two words lost in a "fog of too much respect and mystery" (Riel, pp. 272).

The book attempts to show that a small number of assumptions can be "postulated and utilized" (Goldratt, Cox & Whitford, pp. 359) to explain a very large spectrum of industrial phenomena. Goldratt has attempted to show ...