1. The Goal
GSC #7620- Fall 2012
Mr. Michael Silvio
Samar Dalal Yasso
September 28, 2012
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2. Executive Summary
The benefits of the “Goal” novel book are numerous and the author highlights several aspects identifying
problems and possible solutions to improve overall performance & management processes as an ongoing
development. Alex Rogo, Manufacturing Plant Manager and the main character in the book reviews the
fundamentals of redefining priorities in the process to achieve this goal. As I continued to read, the author
elucidates diversified scientific, mathematic and upper level management methods. He identifies the
problems as intrinsic constraints which are limiting people minds from moving forward and thinking out of
the box. For instance, many businesses wasted labor hours and cost for studies and project reviews when
the data is not applicable.
Alex engages his team to list questions concerning daily operations, procedures and in some cases
abandoned company policies. i.e., he replaced outdated methods with robot which required less overall
labor hours but was costly. If the robot ran side by side with the old methods, the production could increase
to almost double. The author embraces the magnitude of continues process improvement method for
management processes in all different forms of businesses by relating scientific methods such as bottleneck
“Theory of Constraints” to improve management processes, “Socratic Method” to lead people to the
solution of future problems, and “Evaporating Cloud” to think laterally hence out of the box while
utilizing available resources. I learned from the author that management is science which can solve
problems with logical and scientific methods rather than relying only on explicit experience. An example
from actual business news, the sustainable success of Toyota Motor Company’s management that applies
“Kizen” method (in Japanese means continues process improvement) and it is integral part of the
company’s core competencies and competitive advantage. I agree with the author’s statement: “the Goal of
any company is to gain profit” by focusing on minimizing inventory, reducing operational costs and
increase throughput and not necessary following the traditional measures such as layoffs and reducing
wages …etc.
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3. Theory of Constraints “Bottleneck”, Socratic Method &Evaporating Cloud
It’s imperative to learn and deeply understand how to apply these methods as it helps in taking necessary
measures to improve the overall procedure in business and personal life. As Dr. Jonah, Alex’s distant
advisor suggested to brainstorm with his team members and arrive at logical solution of various Q&A as a
process of Socratic Method which is a form of inquiry and debate between individuals with opposing point
of views based on Q&A to stimulate critical thinking and to illuminate ideas. He simultaneously applied
these scientific methods in business while realizing its contribution to facilitate the ongoing process
improvement and in his personal life trying to save his marriage.
Alex was able to increase the throughput and net profit of the company by setting common mutual goals.
Further, with Lou, chief accountant identified the feasible application of the theory on each divisional
manager. He engaged his wife and applied Socratic Method by finding 5 logical steps to improve the plant
performance as well as to resolve their marital problems. Later on this theory was recognized as Goldratt’s
theory of constraints and taught in management courses.
1. Identification of the constraint – The outdated technology and the heat treatment process was critical
factor in reducing the preparation time in manufacturing process through correct identification of constraint.
2. Exploitation of the constraint – If outdated technology and heat treatment process is taking too much
time to complete the program for each type of component, monitoring and evaluation bill of materials is
necessary for exploiting the constraint rather than simply eliminating the constraint.
3. Subordinate other works to the constraint – Parallel processing of quality control prior the bottleneck
reduces the idle time of machines to speed up the capacity of NCX-10 machine.
4. Elevate the constraint – Increase the throughput of the constraints irrelevant to the costs as they limit the
entire system throughput.
5. Repetition for further improvement – Repeat with new constraints. As constraints improve, new constraints
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4. will emerge, repeat with these next. Careful observation of constrains made the plant successful and embrace
Alex and his team.
In my view, Alex portrayed a lateral analytical thinking while paying attention to the details; he was able to
solve the production capacity. Similarly, he solved the production delays by forming batch sizes according
to an economical batch quantity of the heat treatment process and the time lost in getting full batches of
parts at once to fill the furnace caused repeated heat-treatment. Theory of Constraints comes into practice
to balance the following 3 critical areas, minimizing inventory, reducing operational costs and increase
throughput of the plant’s operations simultaneously.
The other concept that I learned is applying Evaporating Cloud which is out of the box thinking process
that Alex applied when he wanted to increase the plant's throughput, but he couldn’t do so due to the lack
of contracts. Eventually, he found out that there is a deal from a French client who wants a certain parts at a
low price in large quantities. Presumably, we all should learn from Alex’s excellent example of team work
and how he and his team were able to group the quantity in pieces which raised the price back up as the
client doesn’t order in bulk anymore. The plant produced 1000 parts in 2 weeks and managed to group
them and produced 250 parts a week for 4 weeks to satisfy the client, maintain agreed upon price, and keep
the production flow. Therefore, both manufacturer and buyer gained from Alex’s efficient team work and
management style in which he was able to overcome bottleneck constrains and to maintain business
sustainability.
In sum, the key is to maintain minimum inventory with high turnover ratio to keep sustainable cash flow.
Since, inventory booked in current assets and evaluated according to the cost of goods sold. To Increase
Throughput, the emphasis on effective production leads to the rate at which a corporation can produce for
sales. Traditionally the throughput is the rate which the plants generates money through production. But
realizing the effectiveness of “through sales” if the products are just produced, but not sold, they’ll not be
throughput.
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5. On the other hand, it is imperative to appreciate a further use of the Theory of Constraints; Alex was
struggling with personal family issues with his wife Julie due to his extensive work life style, several issues
were absorbed. He and his wife were drifting apart as he got more and more wrapped up with work.
Eventually, both began communicating to balance between achieving job objectives and dedicating quality
family time. She unintentionally was involved and became part of his Team.
When I finished my high school and during the summer vacation, my brother needed my help working in
his appliances repair store. Now I go back with my memory to point a problem he solved in a simple way
applying constrains method with his limited knowledge. The problem was finding an alternative of stocking
different parts with shorter life cycles for different appliances brands (fridge’s, stoves, washer & dryer,
dishwashers, microwaves…etc. In addition, he was dealing with a complex distribution of order pick
system that was a basic operated system started with ordering list of stock for fast moving items along with
other information such as the due date waiting for repair items. The emphasis is to review the ordering and
distribution systems with the supplier for better delivery time and accuracy standards (JIT). The supplier
was moving ordered items to point of delivery to reduce cycle time and make efficient order picking with
low cost. When we analyzed the entire system process, we identified the order picking as the number one
area needs improvement in the supplier warehouse. I remember well working with the warehouse manager
tracking our orders and smoothing the parts movement cycle inside the warehouse in which we were able to
classify our orders with three colors labels as critical (red), emergency (yellow), and standard (green). It
was really fun to follow a process from the start to finish and see how setting up logical system (constrains
method) to meet our customer expectations of reliable repairs and delivery time.
In conclusion, back to the focal idea of this book, I believe the title of the book infers that change and
processes should be ongoing. Concurrently, from my experience, many employers and even employees yet
prefer not to move out of their comfort zone, reject “change” and function as we always hear, if it works,
don’t fool with it.
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