Goldratt's The Goal: A Process Of Ongoing Improvement

The Goal Write-up

The fictional business novel of Goldratt’s, “The Goal: A Process of Ongoing Improvement,” emphasizes on constraints and the solutions in production management. Determined by its nature, the novel does not present the analysis quantitatively about the underlying issues, instead, the author shares his insights and experiences with the readers by using practical examples and accessible literature style. Even without quantitative analysis, a substantial amount of information about the manufacturing sector for which Rogo is responsible has been provided or implied throughout the book, therefore it’s not obscure for the readers to portray a concrete picture of the capacity and improvements of the plant. By collecting and evaluating

Alex Rogo is the manufacturing manager of a fictional plant called UniCo and it’s a subsidiary of UniWare. He is told by Bill Peach, the Vice President of his division, that because his plant is suffering from heavy losses due to frequent late shipments, it will be closed in three months if Alex fails to improve his operations management and business performance. Meanwhile his wife Julie complains that he has been spending too long on working and leaves him. Facing such adversity in both professional and private lives, Alex recalls that Jonah, his former college physics professor, has become an operations management consultant, and he decides to turn to Jonah for his advise. With the guidance offered by Jonah, Alex and his team have been able to figure out the bottlenecks of the plant and to develop methods to promote the bottlenecks’ capacity. Eventually, they have discovered how to control the material release into the plant according to the production schedule of bottlenecks. Following the newly-founded principle of prioritizing delayed shipment, they have managed to clear their inventory, and develop new business thereafter. The plant becomes a growing success and avoids to be shut down thanks to Jonah’s professional opinions. Subsequently, Alex has won everything precious in his life. He is promoted to the manager position of the entire division. In addition, he wins his wife back and starts a new discovery to his

According to Jonah, the excess manpower is the only reason for excess inventory, and only with the reduction of capacities but without trimming inventory and improving market performance, the manufacturers will suffer from higher inventory cost and volume and downward throughput rates. In addition, a widely recognized misconception, revealed by Jonah, is that the manufacturers should control their capacities to approach market demands. However, this is not necessarily true in dynamic market. When the capacities are reduced, the sales prices go up with the increase of unit cost of production, and therefore the market demand shrinks and inventory skyrockets. In Jonah’s opinions, the optimized methods of reducing inventory are efficient marketization and effective control of manpower in terms of the number of employees and their working