The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt :: essays research papers

The Goal A Process of Ongoing Improvement by Eliyahu M. GoldrattThe heart of this story is based around the life story of Alex Rogo, Plant Manager forUniware a division of Unico. After a very upset customer approaches Alexs boss,Bill Peach, he is given an ultimatum to turn the show around in three months. Dueto the limited amount of time available, there are not many outside tools availablesuch as consultants, surveys, etc. With very few hopes, Alex foresees theinevitable until he remembers his conversation with Jonah, a physicist Alex knewfrom a previous job.The GoalIt is not until Alexs job is in risk that he decides to devour into hisconversation with Jonah. During the conversation, Jonah asks him severalquestions to analyze his companys situation. The conversation leads ultimatelyto the question, "What is the stopping point of any business?" After rethinking hisconversation, Alex realizes that the goal of any business is to make money.Furthermore, if the goal is to ma ke money any action toward this goal is consider successful and any action not woful towards the goal is nonproductive. Alexunsure of such a simple answer decides to contact Jonah to continue the searchfor more answers.MeasurementsOnce Alex contacts Jonah they define the undermentioned measurements to define thesuccess of any plants production1. Throughout = rate that the system is used to generate money throughsales.This measurement would be of what a product would be worth whensold at market value after deducting operational expense and fund.2. Inventory = all the money invested in purchasing items that will be sold.This could include the remains of their machines after being used towardthe investment.3. Operational expense = all the money used to turn inventory intothroughput.This would include such items as depreciation of a machine, lubricatingoil, scraps, etc.Balancing a Production LineJonah explains to Alex that a plant that is continuously productive in consideredineffi cient. He further explains that continuous production will result in highabsenteeism, poor quality and employee turnover. Based on this, he would withdrawto reduce operational expense and inventory to improve throughput todemonstrate a balanced line of production. Jonah leaves him to ponder theunderstanding of two things what are the babelike events and statisticalfluctuations in his plant.BottlenecksDuring a hiking trip with Alexs son, he produces a game for a few of the kids todemonstrate an ideal balance line of production. He does this by setting updependents and uses a die to measure the statistical fluctuations. At the end ofthe game, he concluded that the bottlenecks speed of production is what