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If you don’t know what the real goal is, which you could very well be wrong about, then you can’t figure out what to do to reach the goal. Keeping people working and making money aren’t the same thing.Just because you’re paying for someone doesn’t mean they should be busy all the time, it could be harmful.
The story of Alex's fight to save his plant is more than compulsive reading.
It contains a serious message for all managers in industry and explains the ideas which underline the Theory of Constraints (TOC) developed by Eli Goldratt.
Written in a fast-paced thriller style, The Goal is the gripping novel which is transforming management thinking throughout the Western world. He has ninety days to save his plant—or it will be closed by corporat Written in a fast-paced thriller style, The Goal is the gripping novel which is transforming management thinking throughout the Western world. He has ninety days to save his plant—or it will be closed by corporate HQ, with hundreds of job losses.
Alex Rogo is a harried plant manager working ever more desperately to try and improve performance. Alex Rogo is a harried plant manager working ever more desperately to try and improve performance. It takes a chance meeting with a colleague from student days—Jonah—to help him break out of conventional ways of thinking to see what needs to be done.
The Goal: Increase throughput while simultaneously reducing both inventory and operating expense.
The system only moves as fast as the bottleneck, so find the bottleneck, see what has a big pile of work in front of it. If not, you’re in for a treat.” This was a statement made by Chris Young at LKUK13 which, although it was said about every book he mentioned, was very true. Although it was written nearly 30 years ago by a scientist from Israel, it is still very relevant today.Told as a story, we hear how the lead character, Alex Rogo, turns his manufacturing plant around, whilst at the same time seeing the effect his actions have on his family.The Goal: Increase net profit while increasing return on investment and increasing cash flow Those money making measurements are difficult to use day to day though, so you can use: The Goal Reframed: Increase throughput while simultaneously reducing both inventory and operating expense.Not to do them in isolation, but to do them all together.If you reduce your batch size, you increase throughput by reducing inventory held and reducing the amount of cash tied up at any one time.It also lets you move faster, since the gaps will be smaller since the time to process a batch will be lowered as well, and your total lead time on any project condenses.Lost time on the bottleneck is lost throughput which means you’ve lost the When you make a non-bottleneck do more work than the bottleneck, you create excess inventory and thus lose money.What you have to do is figure out how to release materials at the start of the process exactly according to the capacity of the bottleneck.If you keep everyone and everything working at full capacity, you’ll naturally build up inventory by creating excess work.A plant where everyone is working all the time is very inefficient.