The Goal is a book about how to set objectives, not only in business but also in life, and reach them. It teaches you how to set attainable goals and through careful and strict application reach them. It also explains how to use operations management with the entire system and looks at the system as a whole. The example that the book uses is on a man named Alex. Alex manages a plant that has been experiencing major backlog and non-productivity problems, and as a result is warned that it will be closed in three months if it does not change it?s ways. A former professor named Jonah tells Alex that he is capable of reaching his goal, which is characterized simply as making money, if he sticks to accounting measures Jonah has put forth and no longer takes part in the traditional ways he has previously used.
?The wisdom of Jonah,? is summarized into three critical points or measurements.
Jonah?s first measurement is Throughput. Throughput is described as ?the rate at which the system generates money through sales.? In other words if you produce something but it does not sell it is not throughput. Jonah?s second measurement is Inventory. This is described as ?all the money that the system invested in purchasing things which they intend to sell.? Inventory is a critical point because companies found themselves paying more money to employees and for the cost of storing too much inventory. Employees were paid daily to produce inventory and keep track of that inventory. The third measurement Operational expense ?is all the money the system spends in order to turn inventory into throughput.? This means that direct labor was not included in inventory, which was what Alex thought. Jonah?s measurements allowed labor to be part of all three measurements not just inventory or operational expense. Jonah?s measurements looks at the system as a whole and through application of its definitions can produce a balanced plant.
One of Alex?s most significant lessons was with the NCX-10 machine. He learned to consider using alternate processes to increase capacity. Eliminating time wasted through idle bottleneck time, process defective parts or process parts that do not contribute to throughput should optimize bottleneck operations. The ?Herbie? concept of bottleneck operations was the major analogy Alex found that allowed him to begin to see Jonah?s accounting principles in reality. The dice and match game that Alex played with the Boy Scout troop gave him a diagram that provided him with data and more understanding of the concepts presented by his professor. He learned from the out come of the experiment that two boys were destined to end up cooking and washing dishes because of the way the system of matches was designed. In addition, when the night-shift worker Mike comes up with a way to increase productivity at one of the major bottleneck areas identified at the plant, Alex immediately recognizes Mike?s innovative ideas and asks him to begin to set them up on the other two shifts. This recognition given by Alex to the employee and the immediate implementation of the idea without considering traditional approval methods of new procedure, begin to impact the plant directly. Alex?s son Dave in the tent that night relays to Alex that the changes he made in the troop and the study he involved them in was indeed a great experience. Alex?s complete involvement in building the new system according to Jonah?s accounting measurements allowed Alex the insight and the motivational skills to get everyone in the plant involved in the new Goal. His strength in listening to all recommendations no matter where they came from in the plant as well as keeping up with problems as they occurred allowed the system to begin to work. After the first month there was an increase in net profit of one million dollars and a decrease of inventory held in the plant. Alex?s operational management skills were really starting to come together because he was following Jonah?s measurements. Once Alex found the Goal for his company he was able to plan and implement ideas that made people want to work with him in achieving his goal. Alex remained attentive of everything that affected his plant once he began the changes toward implementing the goal. As a result he was able to easily begin to free up time to focus on his wife and family. Later developing a goal in his family life and openly involving the participation of all his family members in the ideas, which affected the family showed a similar operational management system that could be brought to stability. When Alex?s wife leaves him because she is not personally satisfied it can be immediately seen that this is a bottleneck area in Alex?s home life and as described by Jonah a bottleneck is very important to the system as a whole in terms of productivity. As Alex begins to reestablish his relationship with his wife his outlook and enthusiasm change to applying increased attention to the bottleneck area, in this case his wife. Temporarily allowing his mother to assist him while his wife gets time for her own thoughts to develop an increase of support at a bottleneck area. Being at home with kids waiting for a husband who is so concentrated on his work and rarely at home, and living in a new area that you are unable to explore because of your responsibilities to family caused the bottleneck to occur in Alex?s home. Alex found that his own personal feelings about his love for his wife and his determination to balance work and home were most important, and is an example of his operational managerial skills that were demonstrated in the novel.
One part that I liked in the novel was Alex?s ?time to think alone.? One day he decides not to go into work but instead to think on his own over some pizza and beer. Also, his knew that his wife needed the same alone time and allowed her time away to ponder her own thoughts. The novel dealt with operational management skills that could be applied not only in business but also in everyday relationships in your own personal life. I agreed with the method in which Alex taught his employee?s, and his family, which was the same way that Jonah taught him.