The Goal: A Process of Ongoing Improvement- Book Report The Goal: A Process of Ongoing Improvement (Goldratt & Cox, 1986) is one of the few management books which attempts to explain the jargons rather than defining them. It is also about managerial practices which enable the managers to shift their attention from urgent things to important things by recognising the bottlenecks (or the weakest link in the chain of production). The book adapts a scenario where the plant manager, Alex Rogo, is caught in the urgent tasks of daily operations and loses the focus on important goals of the existence of the plant.
It is a story of his struggle to turn around a failing plant in three months. He is helped in his struggle by Jonah, his teacher, whose questions force Alex Rogo to rethink the validity of conventional wisdom. Through this story, Goldratt states that improving what you already do best will not lead to increased business for a manufacturing concern. Rather, improvement efforts should be focussed upon the constraints or the bottlenecks (factors that stall/slowdown the production process).
In technical words it is known as theory of constraints, which talks about increasing the performance of the constraint which directly affects the goal. He says that all the activities of the system could be divided into throughput, operating expense and investment. Throughput is money (goal units) while investment is money invested by the concern to sell the goods (inventory). Operating expense is turning investment into throughput. To achieve the goal, the first step is to identify the bottlenecks. Once the bottlenecks are identified, they should be tapped to their full potential.
Rest of the production system should be adjusted to ensure that bottlenecks deliver to their full capacity. Make changes in the system to upgrade the constraint/bottleneck so that it no longer remains the bottleneck. Buffers should be created both before and after the bottleneck so as to maintain the flow of work in case of any contingency. The Goal drives home the fact that all the activities in an organization are part of a bigger task which is to make money. Only when an organization makes money, it will be able to survive and grow further.
All other tasks are important to make money but they are not the purpose or reason of the existence of an organization. People, working at different levels of the organization, get so engrossed in their daily routine chores that they forget to ask themselves if their efforts are contributing to the achievement of goal or not. The author asserts is that employees should never lose focus of their goals. Each of their activities should be aligned to the purpose of the organization which is to make money.
They should not get lost in the managerial jargons and numbers and keep an eye on the goal which doing daily tasks. Further, through Alex Rogo, the plant manager, the author conveys that when you fall into the habit of doing fire-fighting for such things which otherwise should be everyday tasks, the stress shows in personal matters also. Alex Rogo’s relationship with his wife was on a decline due to his absolute involvement in his official issues. Though the central theme of the book is about identifying and achieving the goal, Goldratt’s has successfully managed to convey the importance of team work in achieving the goal.
This throws light on very important aspect of operations management whereby the operations should be carried out in such a way that it is profitable for the department/organization as a whole and not to implementer’s unit alone. Through this book, Goldratt has subtly communicated how the basic managerial functions of setting an objective, planning, organizing, implementing, monitoring and controlling hold perfectly true for any organization on any given day. I have applied the managerial practices in my training stint with a software company.
The company used to sell software to streamline the marketing and operations of the insurance companies. I was part of a team which used to prepare RFPs to the prospective customers. There were three members in the team, apart from me, and all three were from insurance backgrounds with adequate product knowledge. My job was to consolidate the various portions of the RFP prepared by different team members, format it and upload it in the system before the deadline expired.
As is the case with the deadlines, the team used to submit their final portions of the RFP hardly fifteen minutes prior to the expiry. It used to become impossible for me to consolidate, format and upload the entire document (sometimes 550 pages long) before the expiry of the deadline. After we missed two deadlines in the row, we decided to take stock of the situation. I was the bottleneck since I could not finish my task in fifteen minutes. Others said that the quality demands are so high and time so less that they cannot submit their portions even one hour before the deadline expiry.
After brainstorming it was decided, that to enable me to cut down on time, the team would divide their portions into sub-parts. They will send me each part as soon as they finish it and not wait for the entire portion to be completed. This would enable me to consolidate and format the document throughout the day and thus meet the deadline. The solution ensured that the bottleneck was made to work throughout the day and not in the last fifteen minutes.
Thus the capacity of the bottleneck was fully utilised and others adjusted their work towards this purpose. Bibliography Goldratt, E., & Cox, J. (1986). The Goal; A Process of Ongoing Improvement. New York: North River Press.