Executive Summary
The core of this narrative is centered around Alex Rogo, who is the Plant Manager for Uniware. Uniware is a division of the organization UniCo. After a very unsatisfied customer contacts Bill Peach, whom is Alex’s boss, Alex is told that his plant will be shut down unless he improves it within three months. The short amount of time leaves Alex in a frantic, yet hopeless state. It is not until he recalls a past conversation with Jonah, a physicist, that he begins to think there is a possibility that the plant has hope of survival.
After the swift analysis of Uniware, Jonah urges Alex to think about the basic goal of a business. Thinking back, Alex recognizes that making money is the sole goal of a business. Skeptical of such an obvious answer, Alex contacts Jonah to ask more questions leading to the definition of several measurements that determine the plant’s production achievements.
Jonah tells Alex that a constantly productive plant is inefficient. Alex needs to
decrease operational expense and inventory to improve throughput in order to accomplish a balanced line of production. Jonah leaves him to think about his plant’s dependent events and statistical fluctuations.
While on a hiking trip with his son, Alex creates a game for some of the kids to
display an ideal balance line of production. . The game leads him to realize that the bottleneck’s production shapes the other machine’s production speed. The statistical fluctuations are what slowing down inventory.
After Alex’s discovery, he and a handful of selected colleagues look for the
bottlenecks. They classify one of the robots, NCX-10, and the heat treatment
area as the source of the bottlenecks. Once identified, they begin to try to resolve them with specific steps. The emphasis to keep the bottlenecks working constantly is based on the fact that an hour lost at a bottleneck is an hour lost at the entire plant.
Thanks to these few logical steps, production is greatly increased throughout the plant. Thus, Jonah’s advice leads Alex and his co-workers to turn the plant around resulting to his promotion as division manager after much hard work and sacrifice. In the beginning of the book Alex’s wife, Julie, and he have several problems resulting in her leaving him because of his relentless work ethic. While working to redeem his plant, he also works on redeeming his marriage and succeeds at that as well.
I think that not only is the author teaching useful business techniques but he is also suggesting to the reader that stability needs to be present in both work and personal life. The stability is so important because both lives influence each other inevitably. This novel is great for anybody who desires to conquer basic, common ways to improve any particular process no matter what it is. Although many of the changes that Alex made throughout the plant were quite simple, the basic principles and rules that the majority of the business world followed made it hard for Uniware’s new concepts to be accepted by others. However, Alex and his crew’s persistency pay off in the long run. I was very intrigued with how this book incorporated a personal story about Alex with realistic business constraints, processes, and solutions. Overall, Alex’s various problems stemmed from habitually following the set rules that one is expected to accept and support.
The Ten Things Managers Need to Know from The Goal
1. Managers should always consult their co-workers rather than trying to solve a problem alone. Many answers can come from the various areas of available knowledge.
2. Never be too proud to ask for help. If Alex would not have consulted Jonah, the plant would have ultimately been closed down.
3. Always listen to the ideas of your colleagues. Even though you might not agree with them all the time, their thoughts could lead to a revelation.
4. The most accepted solution is not always the right one to problems. If the plant would have continued to be run by set rules, they would not have increased throughput. Don’t be afraid to try a different, less popular route.
5. Encourage taking the time for group meetings. Many things can be discussed at one sitting, possibly leading to the solutions or the next step of a process.
6. Sometimes managers just need to stop and look around. Many times, the answer to their problem has been right under their nose the whole time.
7. There is nothing wrong with thinking about a situation. However, over-analyzing something is not going to result positively. It is better to just use common logic than tiring yourself out with numerous ideas and possibilities.
8. Planning your next move rather than having no other choice but to react to a situation is key to smoother production. Thinking about something and knowing what to do next is a much easier process than frantically reacting to a situation.
9. As hard as it may be, always try to keep a healthy balance between work and personal life. They affect each other one way or another.
10. Lastly, strive to stay positive no matter how gloomy the situation is. People will not accomplish much with their heads down feeling sorry for themselves.
Full Summary of The Goal
Chapter 1-Introduction
The first chapter of the book introduces Alex Rogo and the evident challenges he is facing at the production plant. The plants problems become obvious when Alex and his boss, Bill Peach, have a few heated words over a late order. Since the unsatisfied customers have been nipping at Peach’s heels, he is very persistent that the order be shipped out that same day. The plant is failing in both production and profit, and Bill informs Alex that he has only three months to improve the plant or it will be closed down.
Chapter 2-Alex’s personal life
The second chapter allows the reader to learn the details of Alex‘s personal life. Getting the job as plant manager relocated him back to his hometown six months ago. Though his family lives there, his wife Julie isn’t adjusting very well. Alex’s in-depth memories let the reader know that he doesn’t feel too accomplished since he ended up where he started. However, the late order does get sent out but not without everyone in the plant working on it with unapproved overtime.
Chapter 3-Meeting at headquarters
Bill Peach organizes a meeting at headquarters for managers and his staff.
During the meeting, everyone is told how bad the company is performing and is assigned goals to accomplish. Now Alex knows why Bill was so hostile that day at the plant about the late order: if the Division does not improve within one year, it and Peach are going to be sold.
Chapter 4-Jonah
While sitting in the conference room during the meeting, Alex recalls running into one of his physics professor, Jonah, at an airport. Surprised by Jonah’s correct predictions of the state of the plant with no specific details of the company, Alex is intrigued.
Jonah mentions that there is only one true business goal no matter what company is being considered. .
Chapter 5-Money
Alex leaves the meeting while everyone is on break. He doesn‘t feel like the meeting is doing him any good. His mind is racing trying to figure out what the sole goal of a company is. After some self discussion, he comes to the conclusion that the goal is money.
Chapter 6 & 7-Improvement
Alex discusses with one of the plant accountants what is necessary to improve profit.
They agree that net profit needs to rise as well as return on investment and cash flow.
Now all that is needed is relating those terms to precise procedures. Despite the negative outlook, Alex decides to stay at Uniware and try to improve the plant. Then Jonah comes to mind.
Chapter 8-Throughput, inventory, and operational expense
Once Alex gets in touch with Jonah, Jonah tells him that throughput, inventory, and operational expense categorizes everything in the plant one way or another.
“Throughput is the rate at which the system generates money through sales.” “Inventory is all the money that the system has invested in purchasing things which it intends to sell.” “Operational expense is all the money the system spends in order to turn inventory into throughput.” Alex is not satisfied with Jonah’s answer.
Chapter 9-Robots
The main man of the company plans to visit the plant for a photo and video with of the robots. Alex begins to wonder if the robots are really as efficient as everyone believes them to be. After working with his crew- Lou the accountant, Stacey the head of inventory control, and Bob the manager of production, Mr. Rogo realizes that the robots are not as efficient as perceived due to higher costs and labor expenses.
Chapter 10-Need of change
The crew drives out the definition of the three terms until they are pleased. Bob doesn’t really believe that everything in the plant can be justified by only three terms. Lou explains that the entire plant is inventory essentially. They know that a dramatic change needs to occur with the machines. The worry of decreasing efficiencies earns Jonah another phone call resulting in Alex catching a plane to New York later that night.
Chapter 11 & 12-New York
Alex fills Jonah in on the short time he has to improve the plant. Jonah assures Alex that it can be done and they begin to discuss the plant’s challenges. He explains to Alex that “A plant in which everyone is working all the time is very inefficient.” Jonah tells him to look at the way he is managing plant capacity. Jonah ends the conversation by asking Alex “what does the combination of “dependent events” and “statistical fluctuations” have to do with your plant”? Alex’s excessive work ethic is taking a toll on his marriage, focusing almost all of his time on the plant.
Chapter 13& 14-Hiking trip
While on a hiking trip with his son, Alex realizes the necessity of the relationship between dependent events and statistical fluctuations by comparing a line of hikers with his plant. The dice game shows him that with a perfectly balanced plant, considering dependent events and statistical fluctuations, throughput decreases and inventory and operating expenses increase.
Chapter 15 & 16-Win & loss
Now that Alex is familiar with the dependent events, he moves the slow boy Herby to the front and takes some items out of his book bag to lighten his load. This causes the gaps in between each boy to be much smaller and even. In business terms, it balances the statistical fluctuations and increased throughput. When they arrive home, Julie is gone.
Originally, she and Alex were supposed to spend time together but the hike didn’t allow that to happen.
Chapter 17 & 18-Bottlenecks
None of Alex’s crew seems very excited about his new found revelation. However, his discovery gets everyone’s attention when the idea leads to a successful production of a late order. The next thing Jonah discusses with Alex is the meaning of bottle-necks and non-bottlenecks. The crew finds the bottlenecks, the places in which capacity does not equal demand. This breakthrough suggests plant reorganization. If they did this, however, more machines would be needed which is a problem for the struggling company.
Chapter 19-Jonah visits
Jonah comes to the plant to check things out and explains to Alex that extreme excess capacity would occur without bottlenecks. An increase in plant capacity is provided by an increase in bottleneck capacity. Jonah suggests that some of their capacity may be masked due to their inaccurate thinking. Options to expand bottleneck capacity are no bottleneck down time, working on value products, and by outsourcing some work. Jonah informs the crew that a bottleneck’s is unproductive; it is equal to the cost of the whole plant.
Chapter 20 & 21- Late orders
Alex sets up the bottlenecks to specifically work on late orders. He then goes to look for Julie and finds her at her parent’s house. She still needs her space. They create a system of red and green tags to illustrate to the workers which products are more important at non-bottlenecks. Red has the most urgency attached to it and green is for the parts that don’t go through the bottlenecks.
Chapter 22 & 23-Satisfying shipment
The plant ships twelve orders after the implementation of their new processes but that’s not enough. Bob finds a couple of older machines to match one of the bottlenecks tasks.
Even though efficiency is increasing, trouble stems from workers going to other departments to occupy themselves while the machines produced, causing down time at the bottlenecks. Alex assigns a foreman at each bottleneck location continuously. One of the clever foreman found a method to process more items by collaborating orders according to their priority which increased efficiency.
Chapter 24 & 25-Color-coding problem
Prioritizing items causes inventory to go down. However, a decreased inventory is uncovering more bottlenecks resulting in Jonah’s second appearance at the plant.
Jonah explains that while firmly encouraging full capacity of the bottlenecks, they have neglected the production of non-bottleneck parts which has led to a problem in final assembly along with parts piled up at the bottlenecks. Something needs to change with their color coding process.
Chapter 26 & 27-Product releases
This chapter the computer genius, Ralf, arranges product releases for the bottleneck items. Now with the inventory problem solved, Jonah tells the crew that the same schedule can be applied to non-bottleneck parts as well. After this discovery, Alex gets a chance to talk to Bill Peach. Peach tells Alex that he is willing to keep the plant open if it produces a fifteen percent increase next month.
Chapter 28-Decreasing batches
The plant still has too much inventory and not enough throughput. To improve their situation, Jonah discusses decreasing the batches by half. After this is achieved, costs and response times will be reduced.
Chapter 29-Reducing batch sizes again
Alex decides to take on the an order of 1,000 items with only two weeks to complete it. Originally the crew thought that the entire plant would have to be focused on this order, but halving batch sizes again allows them to ship 25 percent of the order every week for a month until the customer receives all of it. The customer is very pleased.
Chapter 30-Hidden improvement
An accounting method Lou uses concerning recent improvement shows a seventeen percent increase. However, the Division doesn’t approve and uses the old accounting model which reveals only a 12.8 percent increase. Most of the improvement is derived from the large order recently shipped. Thankfully, the overly-satisfied customer contracted ten thousand parts per year with Uniware.
Chapter 31-Alex’s promotion
As Alex gets to headquarters for the division meeting, he is startled that he will be talking to some of Peach’s employees rather than Bill himself. They do not go for Alex’s explanation of all the changes at the plant. He goes to Bill’s office on his way out where Bill tells him he has been promoted to division manager. Alex gives Jonah a call in desperation of management answers but Jonah refuses until Alex has put some thought into particular questions
Chapter 32 & 33-Date with Julie
Alex and Julie have a dinner date. They talk about his options and come to the conclusion that he should ask Jonah how to persuade people that the newly-discovered processes are the real deal. With his new promotion, Alex gathers some of his staff to join him at the division. Bob wants to stay and take Alex’s job as plant manager. The plant is in good shape.
Chapter 34-Meets with employees for management advice
The stress of taking on the profession of division manager is really getting to Alex. He just doesn’t know how to approach his new responsibilities. Julie suggests that he ask his crew to assist him with answers to the unknown questions about being division manager. They decide to meet every afternoon and realize that they will have to meet the rest of the time Alex is still there after the first meeting doesn’t go so smoothly.
Chapter 35 & 36-Five-step process
The creation of the periodic table of elements is talked about at the next meeting. Maybe the same thought process that the scientists used to create the table from scratch will help them solve the problems. After much thought, the crew comes up with a basic five-step process to define and resolve the division challenges.
Chapter 37 &38- New-found capacity
The crew makes some revisions to their steps. They also figure out by keeping the bottlenecks busy at all times, they have been causing the bottlenecks to make fictitious orders. Because of the new-found capacity, Alex talks to Johnny Jons, head of the marketing department, to see if there are any orders to undertake. There is an order from Europe but the man placing the order is requesting very low prices. However, giving them a low price will not effect national clients since its in another country and it could lead to many new opportunities. Alex tries to imagine how Jonah would suggest managing this endeavor.
Chapter 39- Adjustments
With the overtaking of the new orders comes the surfacing of more bottlenecks. The crew decides to increase inventory and double their time needed to deliver a sale. Even though this will damage their reputation of quick production and delivery, it is necessary to keep up production.
Chapter 40- Questions that will allow Alex to succeed as Division manager
After much consideration, Alex thinks of some questions of his own like: What to change?, What to change to? , and How to cause the change? These specific questions will lead Alex to be a good manager and the expertise required to answer them finally show Alex the answer to Jonah’s question.
The Video Lounge
[youtube= http://www.youtube.com/watch?v=1UqWejurWwU ]
This clip successfully shows the steps to overcoming constraints within a company that were stated in the book by Eli Goldratt. It focuses on bottlenecks and how to overcome their possible problems. The speaker, Tracy, explains how “breaking bottlenecks” can effectively allow companies to rise above their constraints.
[youtube= http://www.youtube.com/watch?v=hcz1aZ60k7w]
This video is a very humorous way of suggesting that people resist change. One of the characters challenges the other one to change and he doesn’t for several reasons. Change is necessary to succeed in life but there needs to be legitimate reasons for change.
Personal Insight
Why I think:
● The author’s are some of the most brilliant people around because they take things back to the basics. The ultimate goal of any business is to make money and he describes how people can succeed by simple processes. They wrote a novel yet described legitimate problems faced everyday in both business and personal life.
● If I were the author of the book, I would have done these three things differently:
1. I feel like they could have condensed the material more than they did. Even though the book kept my attention the majority of the time, some of the material seemed a bit repetitive and unnecessary.
2. Although I know this book was written to focus on business, I wish the authors would have elaborated on Alex Rogo’s personal life a little more. I think that in order to fully enjoy a novel, the reader must feel as if they know the main characters inside and out.
3. Jonah’s character in the book really intrigued me. Even though he was mentioned and consulted numerous times in the book, I wish the authors would have incorporated him more towards the end of the novel even though I understand why did not.
● Reading this book made me think differently about the topic in these ways:
1. I have taken several business classes and been beyond bored many times with all of the rules and guidelines required to succeed. However, this book really showed me some basic principles in a different light that I could better understand.
2. The Goal really gave me a different outlook on production plants. I have never been in that type of environment so I had no idea just how much planning and stress has to go into the processes in order to keep everything running smoothly.
3. I also was reminded that sometimes the most common and simple processes are the answers to the halting questions no matter what the environment is. Sometimes people just need to stop and think instead of analyzing things far too much.
● I’ll apply what I’ve learned in this book in my career by:
1. In the book, Alex mentions their need to plan instead of react. This is very good advice and I will definitely keep this in mind when I go out into the workforce. Planning is a much more professional method than having to hurriedly react to something because you are not prepared for it.
2. I have always been one to over think things. However, now I am going to try to simply take things for what they are and find a common, sensible solution for whatever my problem might be.
3. Many times, people get so tied up with work or school that they do not make time for the people that matter most to them. I am a big family person and The Goal reinforces the idea to always make time for your family or there will be consequences.
● Here is a sampling of what others have said about the book and its author:
“What others (scholarly and magazine reviews – along with on-line reviews – not simply reviews off the back of the book) have said about the book and its author?”
A review of the book by a reader simply states “I just finished reading The Goal: A Process of Ongoing Improvement this morning, and overall was pretty impressed. It’s a really easy read; it’s not a business manual, it’s a novel, has a little bit of a love story going on, and is over just “light””(”Layered thoughts,”2010).
Brady Uselman wrote “As the reader, I have a background of a story which drew a very clear and sensible picture that hold these points in context. This context was created by story, and for anyone wishing to really understand what is written below, I strongly encourage you to read the book. If anything, I hope the what I have captured from the book encourages the reader to buy a copy and execute the lessons within their organization”(Uselman, 2010).
A student’s review states “Finished this for my operations Management class. It was very engaging and simple for a business read. The concepts were clearly explained and implemented in the situation. I also liked the interviews in the end where we get to see TOC implemented in different kind of organizations, not just manufacturing”(Ning, 2012).
A reader of The Goal wrote that “This is a terrible novel and a great business book. That’s a little unfair, it’s better to think of it as a novel which exists only to illustrate Goldratt’s Theory of Constraints which sounds a little dry. So for my third attempt I’ll say this is a book about a man fighting to turn a factory around from being overwhelmed with uncompleted orders and quality problems to a successful, thriving business. It’s good fun and a great little read” (Maat, 2011).
Fortune Magazine says, “Like Mrs. Fields and her cookies, The Goal was too tasty to remain obscure. Companies began buying big batches and management schools included it in their curriculum. It was eventually translated into 13 languages and sold over 1.2 million copies.” The Economist wrote, “A survey of the reading habits of managers found that though they buy books by the likes of Tom Peters for display purposes, the one management book they have actually read from cover to cover is The Goal“(”Leadership now: Building,” 1998-2006).
Success Magazine stated, “Goal readers are now doing the best work of their lives.” Tom Peters shared his view about the book and said, “A factory may be an unlikely setting for a novel, but the book has been wildly effective”(”Leadership now: Building,” 1998-2006).
All of the book reviews I found agreed that The Goal was definitely worth reading. While a few didn’t feel like it was a great novel, everyone thought that it earned the credit of a great business book. It’s not a hard book to read and people appreciate the simplicity of it as well. This book greatly surpassed by expectations.
Bibliography
Goldratt, E. M., & Coxx, J. (2004). The goal: A process of ongoing improvement. (3 ed., p. 384). Great Barrington: The North River Press Publishing Corporation
Layered thoughts. (2010, November 09). Retrieved from http://www.layeredthoughts.com/book-reviews/the-goal-a-process-of-ongoing-improvement-book-review
Leadership now: Building a community of leaders. (1998-2006). Retrieved from http://www.leadershipnow.com/leadershop/0884271781.html
Maat, J. (2011, July 09). goodreads. Retrieved from http://www.goodreads.com/book/show/113934.The_Goal
Ning. (2012, February 04). goodreads. Retrieved from http://www.goodreads.com/review/show/272252040
Uselman, B. (2010, October 19). “The goal: A process of ongoing improvement” book review. Retrieved from http://bradyuselman.com/wp-content/uploads/2010/10/The-Goal-Book-Review.pdf
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Contact Info:
To contact the author of this article, “A Management in a Minute Book Overview of The Goal by Natalie Dodds for Practicing and Aspiring Managers” please email Natalie.Dodds@selu.edu.
About the Publisher
David C. Wyld (dwyld.kwu@gmail.com) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Management, can be viewed at http://wyldaboutmanagement.blogspot.com/. He also serves as the Director of the Reverse Auction Research Center (http://reverseauctionresearch.com/), a hub of research and news in the expanding world of competitive bidding. Dr. Wyld also maintains compilations of his student’s publications regarding:
Socyberty
