The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt
1069 Words5 Pages
In a situation like Alex Rogo’s, the Plant Manager for the Bearington Division of UniCo Corporation, who has been given three months by his boss to either show a profit or face shutdown, one can be tempted to consider an easy option – quit now and look for another job while your reputation is still intact. The temptations for Alex to consider this option are many – his plant has not shown any profit for quite some time, orders are often shipped months late, the inventory position is so bad that the aisles of the plant floor are crammed with in-process parts, almost all jobs are designated as “rush” and upon all this his marriage is on the precipe because he has been spending all his time in the plant.
However, Alex decides to take the…show more content…
After about a month during which they make other changes like flagging of bottleneck parts, forming dedicated crews for heat treatment and the NCX-10, outsourcing some heat treatment jobs to outside vendors and making engineering changes to some parts, Alex and his team manage to ship a record number of customer orders. However they then perceive a new problem in which their bottlenecks have spread. Jonah steps in again at this point and shows them their erroneous policy of continuously releasing material just to keep the non-bottleneck machines busy all the time. This policy has caused an explosion of the work-in-process. To correct this situation, they work out how much of new material to release so that there is only about a few days of inventory in front of the bottlenecks even though this means that non-bottleneck machines would remain idle at times. Jonah assures them that this is perfectly acceptable and makes sense because ultimately only the bottleneck machine would define their plant throughput.
After another good showing, Alex is assured by his boss that if he can show a further fifteen percent increase in his bottom line then the threat of closure of the plant would be withdrawn. Here Alex realizes that he may now be constrained by the market. On Jonah’s suggestion he cuts batch sizes on all his non-bottleneck machines to half and requests his marketing department to quote four week delivery times. The rationale behind this
The Goal: A Process of Ongoing Improvement Essay
1123 Words5 Pages
“The Goal” is a book written by Eliyahu M. Goldratt and Jeff Cox in 1984. The book is very famous in the management field. In 2004, the author published the third revision of it and celebrated selling over than three million copied of it around the world. Also, the goal book is taught in over than 120 collages. The book was recommended by my professor to be read and summarize as an extra credit. The book is about a plant manger in a manufacturing company, Alex, who was hired in this position six months ago. His plant was suffered because it was running with neither profitability nor productivity. His boss, Mr. Peach, told Alex that the plant will be shut down in three months unless shows some improvements. Alex then, meets with…show more content…
Otherwise, the plant will be closed. The problem starts off when his plant cannot ship quality products on time and with a competitive price. A few days later, Alex get an e- mail from his boss, Mr. Peach, the division vice president invited him for an important meeting in the headquarter with all plant managers and his employees. Mr. Peach began the meeting by talking about the bad performance in the first quarter. During the talk, Alex found a cigarette in the pocket of his jacket. The cigarette reminded Alex of the conversation between him and Jonah, a physics professor, at the airport coming back from a business trip. Professor Jonah believes that the problem of Alex is because he does not know the goal of his company.
Alex took a decision to stay in his position for the next three months and started looking for Jonah. Alex got Jonah’s phone number from his friend who knows about Jonah. Alex talked with Jonah eventually. The conversation with Jonah helped Alex to define the main goal of the company, Making Money, and put some measurements to evaluate his progress toward the goal. The three measurements are: throughput, inventory and operational expenses. Also, Jonah has an opinion about the robots in the plant. He thought that robots do not increase