Badm 375 the Goal Write Up

        Eliyahu Goldratt’s The Goal provides valuable insight into timeless dilemmas facing a majority of plants globally. Although the book centers around the challenges and later turnaround of a small injection molding plant, the model of goal setting, efficiency and continuous improvement can be applied to any business.

In the beginning of the novel, without sufficient profit measures, Alex Rogo’s plant was in serious threat of shutting down. With three months to make a quick turnaround, Rogo was forced to narrow down his situation into a clear definition of what the goal of his plant was. With the help of his old physics teacher Jonah, Rogo discovers that, “The goal is to reduce operational expense and reduce inventory while simultaneously increasing throughput” (Goldratt, 87). For managers working to improve their companies, they must carefully assess what they view as success. However, for a manager who defines success as making a profit, this is simply a surface goal. Although on the surface, the goal is to produce a profit, without measures in place, there is no way to clearly define what constitutes as an improvement towards this goal. This problem was seen when Rogo was proud of the robots at UniCo because they had created the top efficiency measures for his plant within the division. However, this was only illusion because although the robots were constantly working, they were not helping the firm produce a profit. The robots were merely a distraction away from the true goal. After discovering the measures necessary to improve upon in order to produce a profit, Rogo was able to improve factors in his plant that simultaneously reduced inventory and increased throughput, which therefore increased profit. Defining a company goal is not a quick syntax problem, rather a process of evaluating the company and discovering what the exact causes are that will produce the desired effect in the end. Companies are very easily distracted by numbers that look good on the surface. However, without careful evaluation of the true meaning of these numbers and what they work towards, working to increase or decrease these numbers, such as UniCo’s efficiencies, is merely a distraction away from work that can produce meaning or profit. Therefore, careful selection of measures that will produce value for the company is vital to the success of the company.

With defined measurements in place, Rogo now needed to focus on implementing improvements that would work towards achieving the goal. Rogo was so focused on improving the individual efficiencies of his workers; however, even with high efficiency measures, his plant was still failing to produce a profit. The output of the workers was just turning into excess inventory, resulting in large inventory expenses which was counterproductive towards the goal. Through Jonah’s help, Rogo was able to learn what a bottleneck was and identify it within his own plant as the NCX-10 machine. No matter how hard the workers in Rogo’s plant worked, the capacity of the plant was limited by the capacity of the NCX-10 machine. Inefficiencies at the NCX-10 machine produced financial detriment to the company because the NCX-10 machine was not always running, so its capacity and thus the capacity of the entire plant was lower than its maximum capacity. When assessing the operations of any company, it is important for managers not to underestimate the power that the bottleneck can have on the entire company’s profit measures. A bottleneck can appear in any type of company. For example, in an accounting firm, the slowest worker at the firm could reduce the number of clients the firm could provide service to if not managed properly. Any lag time in the bottleneck can cost the entire firm significant profit. The Goal provides valuable yet simple strategies for managers to implement in order to ease their bottlenecks. For example, on the Boy Scout trip, in order to reach their hiking destination on time, Rogo had to ease the fluctuations in the line in addition to managing the slowest walker of the bunch, Herbie. In order to do this, Herbie was placed at the beginning of the line, which eased the fluctuations. In order to reach maximum capacity at a firm, managers should set the pace of work at the rate of the slowest resource. Additionally, Herbie was carrying a heavy bag, so this weight was taken off of him allowing him to walk faster. If managers work to ease the load placed on their bottlenecks, then they will be able to increase the capacity of their entire firm because the bottleneck will be able to produce more than previously capable. Rogo implemented what he had learned from the Boy Scout trip into his own plant, such as introducing old machines to do the same work as the NCX-10, preventing lag time for the NCX-10 and through setting the pace of work to the NCX-10. These simple measures put the plant in balance and produced an increase in throughput in addition to a decrease in inventory. However, an important point made by Jonah is that the bottleneck capacity should match demand or else it will produce excess inventory.