Summary of The Goal

Summary of The Goal

Alex Rogo is manager for one of UniCo's production plants. Recently Alex's plant, as well as the others in his division, have been having major problems shipping orders on time. The company has considered closing the plant and has given Alex only three months to make a significant improvement or the plant will be closed and he as well as all of his employees will be without a job. At this point everything seems to be crashing down around him while at a meeting, discussing the future of the division, he recalls a chance encounter with an old acquaintance, a physicist named Jonah. During their discussion Alex discovers that Jonah is currently involved in the science of manufacturing organizations. Intrigued Alex describes the problems he has encountered at his plant, hoping that Jonah may be able to help. Jonah goes on to question Alex as to what the goal of the company is.

The process begins. The first order of business was to determine what the goal of the company was. Different ideas get tossed around such as: cost effective purchasing, high technology, producing quality products, etc. Quickly Alex and his team realize that these are not the goals but only a means of achieving the goal. After careful consideration the team comes up with this as the goal:

To make money by increasing net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow.

Satisfied with their goal the team must move on to the next step after more help from Jonah. The team must now find a way to increase the throughput while simultaneously decreasing inventory and operational expense. Alex realizes that the huge stockpiles of inventory have built up because they have been ...

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...so much resistance from corporations. People have become so accustomed to doing business the old fashioned way that they have forgotten the one driving force in business; making money. When a process increases cost per unit and allows idle time on expensive resources this often clouds the picture and causes so many to take actions that drive the company further away from the goal and closer to bankruptcy.

Beneath all of the buzzwords, graphs and charts common sense still reigns supreme. Sometimes it just takes a different point of view to get us to take a step back and look at how wrong we are doing things. Go, Go , Go has always been the motto in the business realm. Reaching the goal should be every organization's objective. It is unfortunate that so many are confused by meeting efficiency standards and never truly grasp the goal, which is to make money.