The Goal by Eli Goldratt

The Goal

In the book "The Goal" Eli Goldratt clearly explains the general problems faced in a manufacturing firm especially in an assembly line where the product has to pass through different machines and then these semi- finished products are assembled at a particular place.

Mr. Peach, the division Vice president informs the plant manager Mr. Alex Rogo that the plant is not at all efficient enough in serving its customers as the orders are being delayed by a month or a two. The plant is incurring losses and Alex was asked if did not bring the plant in profitable position in next three months then the plant would be shut down. Then Mr. Jonah comes to rescue and helps Alex in defining the "Goal" in order to deal with this problem. In their every meeting Jonah would provide some thoughts to Alex which would become the short term goal for Alex. Some of the learning which Alex got to make the whole assembly line efficient are as follows:

Defining the GOAL

For the first time when Mr. Jonah met Alex he asked him to define proper goal so that one can be focused throughout the approach. He stressed on the productivity, efficiency and the return on investment of a particular plant if there is a proper goal. In the second meeting Mr. Jonah stressed upon the throughput, inventory and operating expenses. According to him throughput is the amount of money coming in. Inventory is the amount of money that is inside the system and operating expenses are the money that the company needs to pay to make throughput happen.

So here throughput is related to sales i.e. how many finished goods are sold in the market and not the goods which are there at warehouses. So by this time the goal was clear i.e. to make money by increasing the sales.

Statistical fluctuation and Dependent events

While on an excursion with a group of children he learnt a lot of new things which he was able to implement in the plant to increase the efficiency. There was only a single track which was led by Alex and rest of the children followed him. But in process he found that the length of the queue increased as some of the children walked slowly which obstructed the others. This is because a fat guy walked slowly in the middle so this delayed the process. So this problem he could relate with the number of machines in the plant which made the process longer. He identified the bottle neck process in the plant. Here two machines came out to be bottleneck.

Similarly from the dice and the match stick game among the children he took a major learning. In this game played by one boy depends on the previous boy. So interdependence among each other and there was fluctuation in the number of match sticks. From this game he could map the learning to assembly lines. In the assembly lines the output of one machine acts as input of other. Hence

...