The Goal

Introduction

In today’s competitive business environment, businesses are under pressure to generate profit whilst keeping cost under control. “The Goal: A Process of Ongoing Improvement" by Eliyahu M. Goldratt's and Jeff Cox, uses a production plant as a fictitious setting to explain the theory of constraints (TOC) and how to use it to better manage a company. This book also uses a whole new different way of teaching and thinking about how to address issues and find ways to solve them. Though TOC was originally developed for manufacturing operations, it can be adapted to many situations. This paper summarizes Goldratt’s book, explains the business model he presents in his book–The Theory of Constraints (TOC), and the lessons learned

Overview

“The Goal: A Process of Ongoing Improvement,” based on scientific ideology and logic reasoning, uses fiction to describe the story of a plant manager who struggled to find ways to improve the performance of his plant. Though narration of the process in the book specifically relates to a manufacturing plant, the business model presented is also applicable to many business disciplines, including health care, education services, technology and so forth.

The main character in the book, Alex Rogo, was a plant manager of UniCo’s manufacturing plant in Bearington. He faced the following problems in his plant- high inventories, long lead times and declined profits. Specifically, the division had orders that were close to two months behind the schedule delivery date, over $20 million in unsold finished goods inventory sat idle in a warehouse and were losing key customers. In fact, the bad performances did not concern only Rogo’s plant, but the whole division, headed by Bill Peach, was not doing well. Through his conversation with Bill Peach, he learned that he had only 3 months to show improvement else the plant would be shut down.

To save the plant from closing down, Alex consulted his former professor, Jonah, a physicist turned...