Summary and Review of The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt and Jeff Cox

This summary was prepared by Jennifer Barnes while a Business Administration major in the College of Business at Southeastern Louisiana University.

Executive Summary

The novel explores the life of Alex Rogo a recently transferred manager of one of the plants of UniCo Manufacturing Corporation, located in a slowly declining industrial town.  The author’s use of real life situations to write a business fiction was ingenious.  I felt I was studying algebra in parts of the book, physics in the next chapters and a good fiction in other parts. 

Alex’s plant performance has been gradually sinking into a hole that is not profiting UniCo.  The plant must both get the shipments out and start showing an income or the plant will be closed in 3 months.  Alex gathers his department heads into a team.  Alex and his team threw out a lot of questions concerning daily operations, procedures and in some cases abandoned company policies to try new methods. 

The author was able to teach many aspects for identifying problems and possible solutions any corporate office might could utilize to improve overall performance management processes.  He points out that lengthy studies and reports used for management may be just paper generating and not a good measurement of events really occurring.  I feel he is identifying a large problem in stating with company guidelines and policies constraints that are in place only limit’s the mind of its employees.  In addition, he did it all in a supposedly fictitious setting.   I feel the title of the book infers that change and processes should be ongoing. Just as Alex and his team changed their 5 steps to critical problem solving, this process is often not followed up, determining weaknesses.  Most employers and in addition, I feel the title of the book infers that change and processes should be ongoing. Most employers and many employees still function on the old saying, if it works, don’t fool with it. 

Cover via Amazon

The Top Ten Things to be Learned

1.    Always start a solving a problem by finding out what is really going on by “walking around” discover the process. Review each area for breakdowns.

2.    Hire skilled people who will benefit the company.

3.    Remember you have a life outside of your work life.

4.    Brainstorm how the changes will affect employees and the community. Expect to receive feedback.

5.    Big changes are not always the answer. Start slow by making small changes that will make a big difference.

6.    Have an open communication with employees.

7.    Notice details. Not all details are important.

8.    If one change creates another problem, backup refocus on the first problem.

9.    Inventory should be kept to a minimum – too much is a waste of money.

10.   Know what the expected outcome needs to be.

The Goal: Full Summary

In my long career as a part time student, I have rarely enjoyed reading a required fiction novel.  This reading was different in that I found myself enjoying the fiction aspect while becoming involved in the learning actions of this “text” book, recognizing my own career likenesses.  The novel fit both categories of fiction and textbook.

As I began reading, I easily related to the author’s story.   I have seen the opening events occur.  My thoughts were that the stealing of parking spaces and petty co-worker envy and resentment could be traits of those employee’s observed in any job setting.  As I continued to read, the book became less fiction to me and more to the levels of management problems.  It gave me a different insight into an upper level of management achieving a purpose.  But most importantly, the book refines the way I thought management made those changes.  It probably wasn’t a matter of my supervisor just waking up and telling us to try something different.

The author gives one a different way of thinking of executive functioning.  Why was the company started?  I never saw Southeastern University as a profiting business, but rather as a need of supply and demand. Employee’s positions were created to make it possible to meet the need.  A few examples are the housekeepers to clean; the secretaries to type and file; the professors to teach, and the students to learn.  Mr. Goldratt has opened my eyes that this university produces scholars and that are a profit!  No, not an assembly line of parts but an assembly line of scholars.  These scholars become graduates who will become employers and employees with new ideas and insight to make adaptations in an ever-changing world.  Any corporate venture can use the concepts offered to achieve their main reason for being, which is to make money.  

The novel explores the life of Alex Rogo a recently transferred manager of one of the plants of UniCo Manufacturing Corporation, located in his hometown, a slowly declining industrial town.  The authors use of real life situations, e.g. The Boy Scouts, the matches game, etc. was ingenious.  I felt I was studying algebra in parts of the book and then physics in the next chapters. 

The story opens with Alex arriving early to get a start on his day only to find his parking space taken by a familiar car.  That car belonged to his boss, the divisional vice president.  Alex enters his plant to find several employee’s very distraught about the vice presidents presence.  Bill Peach is waiting in Alex’s office and he is here to determine the cause of shipment delays from this plant.  Alex soon learns it is not the shipment delays that are the biggest threat.  Bill Peach has dropped a bombshell.  Alex’s plant performance has been gradually sinking into a hole that is not profiting UniCo.  Either get the shipments out and start showing an income or the plant will be closed.  The deadline was only 3 months in the future. 

Alex now instead of learning to deal with a new promotion, has just inherited a large problem.  The author is inventive because he makes the character of Alex deal with keeping the business open.  I would have begun to pack up and lay off with only a three month dead-line.  Mr. Goldratt gets right into saving a failing company and if one were to use the data outlined in this book, one could possibly turn a seemingly bad situation into a productive agency.

Alex recruits his department heads into a management team to identify concerns and to begin dealing with the problem.  Alex and his team threw out a lot of questions concerning daily operations, procedures and in some cases abandoned company policies to try new methods. 

The author used the term bottleneck frequently in the book referring to the problem area’s blocking the production line.  Another term I thought he used without naming the word was brainstorming.    Alex had to really think about each situation with all the affecting factors to attaining a solution.   In one situation, a robot had a larger capacity than it was producing.  The breakdown was traced to the products being robot machinery ready.  This slowed the time for end product completion.  By on-site study of the situations, this problem was corrected in one working day.  But then this situation caused breakdowns in other areas.  And the author was able to work the reader through the many situations impacting an overall work quota. 

I began admiring Alex’s actions at this point.  He seemed to really care for the plant and what the impact of it closing would mean to the community.  He didn’t start sending out memos and changes.  He preceded slowly, first making actual observations on the working floor and the functioning of all areas of the plant.

Alex also met an old acquaintance, Jonah, who became very beneficial to Alex as an adviser or consultant, during the process of turning the plant around.   I have always heard brainstorming in the text of throwing out idea’s that might work.  Jonah’s method of not problem solving and giving easy fixes made Alex and his employees work out their own answers.  Jonah gave a leading question.  He made Alex and his team seeks the answers they needed.  I think in this way, one would resolve problems and concerns in a manner pertinent to their situation. 

Alex and his Team were able to determine that if the goal of the organization was to make money, then the steps to achieving that goal fell within three functions.  These were 1) cost effective operational expense and net profit, 2) throughput, which is effective production that leads to the rate at which a corporation can produce for sales, and 3) a slim and trim inventory, which is not maintaining a high stock of non-profiting backlog, which decreases profit.

Alex and his Team determined these steps as critical to solving throughput problems:

I.  IDENTIFY the systems constraints. This can include bottlenecks, policies, etc.

II. Decide how to EXPLOIT the systems constraints.  This includes what to change, what to change to and how to change it.

III. SUBORDINATE everything else to the above decision.

IV. ELEVATE the system constraints.  This may involve re-evaluating constraints.

V. WARNING: If in the previous steps a constraint has been broken, go back to step 1, but do not allow INERTIA to be the cause of a system constraint.

The author was able to teach many aspects for identifying problems and possible solutions any corporate office might could utilize to improve overall performance management processes.  He reviewed the intrinsic order that occurs and highlights the fact that arbitrary orders are factors that should be reviewed.  He reviews the importance of redefining priorities in the process of achieving the end goal. 

Alex was constantly striving higher and re-developing his and his team member’s ideas to be able to utilize an improved profit.  As I continued to read, the book became more to the levels of scientist, mathematician and upper level management and I saw the problems at a new level.  As I continued to read, I realized the efforts that it takes to continually strive to attain a goal and to keep a business open.   Once Alex’s production was productively profiting in quantity, this was not cause for a celebration but for improving quality.  He took his team and again, aimed to step higher.  One idea he introduced is the fact that the robot had replaced other obsolete methods.  Although easier, and requiring less overall man hours, the robot was costly.  However, if the new systems ran side by side with the old methods, the production could increase to almost double.  This greatly increased the product and the pride of its employees because they went from a failing company to the top performers (money making).

He also points out that lengthy reports used for management may be just paper generating and not a good measurement of events really occurring.  I feel he is identifying a large problem in stating this as many guidelines and intrinsic constraints that are in place limit’s the mind.  Many businesses waste man hours and cost waiting for studies and project reviews when the data is not pertinent. 

I don’t want to diminish the importance of this work being a fiction or a book to aid business improvement.  I felt Mr. Goldratt probably gave his input into generating a new thought process into the business side of management for any person to absorb.  In addition, he did it all in a supposedly fictitious setting. Let me note here, the fiction is probably more from input embedded by the co-author, Jeff Cox.  Mr. Cox has been the second author on seven plus business fictions, but his resume also list free lance in many areas of writing and report / presentation writings.   I was left with a feeling of more incompleteness on the fiction end of the book and I do feel the book would offer some relaxing reading while still establishing some guidelines for an executive.  Since my on preference is for self improvement and romance novels, I felt the book incomplete in the fiction end.

Alex’s home and family problems were projected into the book because a person does face these issues in his real life.  Each employee contends with work and family, separated but equally important.  This was pretty much where the fiction was entwined in the novel. 

I cannot end this paper without further remarking on the character of Julie, Alex’ wife.  I feel sure it is because of my own habit of reading romance novels rather than business fictions.   In trying to include my thoughts in the report, however, I can see why he left out details I would have considered pertinent to share.  The novel is a fiction but it is also more for the purpose of teaching a reordering of business. 

I just had to find out if the author was married because I felt he skimmed over that lady.  Yes he is! The home situation that developed in the story finally resolved satisfactorily but, I wander why Julie was not more involved.  She doesn’t work, the kids are in school, she‘s new in town, she‘s so un-involved from the life of Alex and his kids.  The setting was Alex’s hometown.  No effort is made to introduce her into his town of family because the author‘s switch from fiction writer to business writer.    The book was set circa the 90’s when women work.  No wander she was bored and alone.  The character of Alex for all his smartness never encouraged her to work or go to school or become more community involved.  To me, this character in the book was given the least amount of substance for her life.   She was just there, a character in the book, but rarely was her day acknowledged; just her night time loneliness.  Being a mother, I know my life is busy. I could do a whole research on the author…how much is he involved at home, what is his position of women working, or is he the man who, like Alex is dedicated to his job 24/7, although his home life is still very important,  but seems to be the  “dependable” item in his life. 

While doing this assignment, I started thinking of my own end job goal.  No, I do not go to work just for the pay check.  I do enjoy my job and the often-hectic demands.  Otherwise, a slow day just seems to make the day drag.  If this occurred very often, I would probably begin to wonder if I am there for the money and I want more for my life’s work.

Several issues were involved as Alex worked thru a marital problem with his wife.  Communication, work and home life each affecting the other.  The importance of listening and observing what is said, finally helped their problem resolve. Alex and Julie began talking and she, inadvertently became a part of his Team.

In addition, and back to the main idea of this work, I feel the title of the book infers that change and processes should be ongoing. Just as Alex and his team changed their 5 steps to critical problem solving, this process is often not followed up, determining weaknesses.  Most employers and many employees still function on the old saying, if it works, don’t fool with it.

Image via Wikipedia

Personal Insights

In my long career as a part time student, I have rarely enjoyed reading a required fiction novel.  This reading was different in that I found myself enjoying the fiction aspect while becoming involved in the learning actions of this “text” book, recognizing my own career likenesses.  The novel fit both categories of fiction and textbook.

The author gives one a different way of thinking of executive functioning.  Why was the company started?  I never saw Southeastern Louisiana University as a profiting business, but rather as a need of supply and demand and all the employee’s positions were created to make it possible to meet the need.  The housekeepers to clean; the secretaries to type and file; the professors to teach, and the students to learn.  Mr. Goldratt has opened my eyes that this university produces scholars and that is a profit!  Any corporate venture can use the concepts offered to achieve their main reason for being, which is to make money.  

Image via Wikipedia

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To contact the author of this summary/review, please email Jennifer Barnes at jbarnes@selu.edu.

David C. Wyld (dwyld@selu.edu) is the Robert Maurin Professor of Management at Southeastern Louisiana University in Hammond, Louisiana. He is a management consultant, researcher/writer, and executive educator. His blog, Wyld About Business, can be viewed at http://wyld-business.blogspot.com/. He also has a book summary/review blog that is a collection of his students’ works at http://wyld-about-books.blogspot.com/.  

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3 Comments
  1. Posted January 20, 2010 at 7:04 am

    nice review…..

  2. Posted January 21, 2010 at 5:23 am

    Good one!

  3. bob
    Posted October 12, 2012 at 12:18 pm

    nice one

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