TO-WARD IMPROVING ORGANISATIONAL PERFORMANCE

The Goal is a business novel that preaches a simple but insightful truth: productivity is the act of bringing a company closer towards its goal. If the company’s goal is to make money, then we should focus on increasing throughput, decreasing inventory, and decreasing operational expenses. By teaching us how to search for process bottlenecks and apply the Theory of Constraints, Eli Goldratt helps us achieve a fundamental understanding of how we should design productive systems.

Summary of the “The Goal” by Eliyahu Goldratt and Jeff Cox is a business novel that follows the journey of Alex Rogo, a plant manager, as he tries to save his failing manufacturing plant. The book introduces the Theory of Constraints (TOC), a management philosophy that focuses on identifying and improving the constraints that limit an organization performance.

Management represented by Alex is faced with numerous challenges at his plant, including late orders, low productivity, and financial struggles; including declining revenue and accumulating debt profile. He is given an ultimatum by his boss to turn the plant around in three months, or it will be shut down.

Through a series of conversations with his old physics professor, Alex learns about the TOC and its principles. The main idea behind TOC is that every system has a constraint that limits its overall performance, and by identifying and improving that constraint, the entire system can be improved.

Alex begins to apply the TOC principles to his plant and starts by identifying the plant’s constraint, which turns out to be bottlenecks in the production process. He focuses on maximizing the output of these bottlenecks and reducing the time lost due to maintenance.

As he makes changes to the plant’s operations, Alex faces resistance from his employees and colleagues who are skeptical of the TOC approach. However, as the plant starts to show improvements, the skeptics become supporters, and plant’s performance begins to turn around.

Throughout the book, the authors use the story of Alex’s journey to explain the principles of TOC, such as the importance of identifying and exploiting the constraint, the concept of throughput, and the need for continuous improvement.

In the end, Alex successfully saves his plant and achieves his goal of improving its performance. “The Goal” provides readers with valuable insights into the world of manufacturing and operations management and offers practical guidance on how to improve overall organizational performance by principles of TOC.