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Summary: The Goal: A Book Review
Review: June 25, 2003 What is the "Goal" of a business? The only clear objective is to make money. However, as this book points out, cost efficiencies, bad decisions and a steadfast tradition in the business world have overshadowed the "goal". Alex Rogo, the main character in the novel, has been given a timeline of 3 months to turn around his plant. Alex entails the assistance of Jonah, his old professor. The reader is soon taken on a journey through Alex's professional (and personal) world. During this expedition, he is forced to ask questions that at first seem trivial, but eventually open the doors of clarity in both of his worlds and his thought process is changed forever.
The major concept that I got from the book did not lie only in the three key elements of throughput, inventory and operating expenses or in determining where the constraints (bottlenecks) were in the production line. I feel that the unspoken (almost unspoken) element was in the paradigm shift of Alex and his associates' thought processes. It was the managerial way of analyzing problems that Jonah was ultimately changing, not the realization of bottlenecks and throughput. Yes, the location of the bottlenecks and change in the flow of production through them, helped increase throughput and led to the solution to the current problem. However, these were just symptoms of the true illness. The true problem was the way that management perceived situations and reacted instead of forecasting and planning. When Alex realized that he really didn't know "how" to manage was the major breakthrough in the novel for me. He finally discovered that his brainwashed way of thinking was what Jonah wanted him to eradicate. Only then did logically thinking through the problems, following a process and eventually managing through common sense did he make good decisions concerning his family, the plant, and eventually the division as a whole..
I believe that The Goal gave good insight into what generally occurs in the decision making process that management faces daily and that the purpose for managers to read this book is so that they can analyze their own way of thinking and then make adjustments accordingly. The book revealed to me that the religion of "old school" business is quite possibly the true constraint.
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Summary: Real education
Review: NO matter what your background this book can educate all. When a friend suggested this book to me I thought a novel set in a manufacturing plant won't be much of an entertainer let alone a business book. But my assumption was completely wrong...not only I found it to be gripping but I found myself reaching for that dairy and taking down a few notes.
The book is full of absolute gems and shows how businesses might have lost "The Goal" of actually being in business by missing the complete picture and instead concentrating on local optimums. A system of local optimums is not an optimum system but may turn out to be very inefficient.
The author starts from simple principles of making money - increasing net profits, return on investment and cash flow. He goes about defining some basic parameters which are so simple that they can be applied to any plant or a grocery store. I, being an electrical engineer was even able to draw parallels with the design of microprocessors. These are: THROUGHPUT - rate at which the system generates money through sales. It is the money coming into the system.
INVENTORY - all the money that system has invested in purchasing things that it intends to sell. It is the money currently inside the system.
OPERATIONAL EXPENSE - all the money the system spends in order to turn inventory into throughput. It is the money we have to pay to make throughput happen. In all, one measurement for the incoming money, one for the money stuck inside the system and one for the money going out. Any money lost is operational expense and any investement we can sell is inventory. So the goal is not to improve one measurement in isolation but to reduce both operational expense and inventory while simultaneously increasing throughput. Then it goes about describing bottleneck and non-bottleneck resource where a bottleneck is any resouce whose capacity is equal to or less than the demand placed upon it. Hence, the capacity of the plant is the capacity of the bottleneck. So whatever the bottleneck produces in an hour the plant produces in an hour. The authour again introduces new parameters like setup time, process time, queue time and wait time any tries to study the phases of production scientifically. But all these parameters simply do not fit a linear model and the author tries to show how non-linear dependencies creep in. I think I might have missed a few points but I plan to reread it sometime soon.
Moral of the story - if you are going by the book and still things are going wrong start from ground zero and question all the set beliefs.
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Summary: Great book...plus
Review: This is a great book. But, I would also recommend "Strategic Organizational Change" by Beitler. Both books together are a great combination for managers.
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Summary: Entertaining and Informative - A Unique Approach to Teaching
Review: Goldratt carefully combines strategy and fiction into his book, The Goal, providing a resource no manufacturing manager should miss. The story follows Alex Rogo as he races to improve profitability at his plant while also saving his rocky marriage. Goldratt employs a unique writing style, weaving the basic concepts of manufacturing strategy directly into the narrative. The Goal is a quick read that both entertains and informs. How often is a plant manager asked to "improve efficiency" by keeping the assembly line flowing, reducing employee downtime, and increasing inventory stockpiles? Far too often, according to Goldratt, who convincingly proves that 'bottleneck' activities are the ultimate constraint in a manufacturing system. Likening bottlenecks to the slowest member of a hiking group, he contends a manufacturing line can only move as fast as its slowest activity - a bottleneck activity. Poor production planning can result in an inventory pileup in front of a bottleneck activity. Activities circumventing the bottleneck cause inventory problems in assembly and are similarly constrained by market demand. The solution is to pull inventory through the bottleneck activities according to this demand, while utilizing non-bottleneck activities as necessary. Idle time at non-bottlenecks is perfectly acceptable. Goldratt also examines the critical flaw of cost accounting systems - reducing total product costs do not simply correlate to higher profits. In many manufacturing organizations, performance measures are based upon efficiencies and variances, rather than bottom-line impact. Therefore, the goal of management (make more money) is misaligned with that of the front-line worker (increase efficiency). They are simple, yet often forgotten lessons. What is the GOAL of a business? It is simply to make more money, and any action you take towards that goal is a good decision. Any action taking you away from that goal is a poor decision. Goldratt makes the distinction clear both in a personal and professional context. He concludes his discussion by asking the reader to consider how such action can successfully be implemented across an organization. Without providing a definitive answer, he implores the reader to examine the lessons learned throughout his writing - seek and ye shall find. One word of warning can be drawn from the narrative - many managers will be tempted to duplicate the examples without regard for the process leading to those conclusions. Many will consider their own organization a "special case" to which these lessons do not apply. Such criticism is clearly unfounded; the true lesson of The Goal is that change is implemented through a process of ongoing improvement specific to each organization. The framework outlined through the narrative is broad, providing the fundamentals necessary to drill down into the core problems plaguing manufacturing profitability. For successfully authoring an entertaining and informative composition, based upon the Socratic method, Goldratt deserves high praise. Joshua A. Gerlick
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Summary: Educational and Entertaining
Review: The Goal gives you an important understanding of business and is a great reading experience. This book is about Goldratt's theory of constraints (TOC), and puts the theory into a interesting story. The story goes on with essential questions and answers. Alex Rogo, a fictional plant manager and the main character of this book, solves plenty of problems in his plant by trial and error. Readers can learn the idea of the TOC by following the thought process with Mr. Rogo. Regardless of whether you are a plant manager or not, I recommend you read this book.
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Summary: A must-read business classic
Review: This book is the ultimate paradox - a "business novel", a love story in fact. It is the first in Goldratt's series following Alex Rogo, and how he turns his manufacturing plant around through some relatively simple (though not necessarily easy) principles. It is through this book that Goldratt introduces the reader to his Theory of Constraints, which should rank among the top five business concepts of the 20th century (including, for example, six sigma and the assembly line). Not in a manufacturing business? This book is set in a manufacturing plant, but the concepts apply broadly. I currently work in a service business, with no tangible products whatsoever, and the keys of this book are as useful here as anywhere. This book is engaging and easy to read, but it's not written to the lowest common denominator. It's for people who want to improve the way their business is run, no matter what level they are - though obviously, the higher you are, the bigger impact you can have. I read this book for the first time in college, and have reread it every two or three years since. It belongs in the company of such business and self-help classics as Seven Habits, See You at the Top, One Minute Manager, and Win Friends/Influence People. Perhaps the highest recommendation I can give this book is that I have bought it and given it as a gift, out of my own pocket, to about half a dozen different people in the company I have worked for over the last six years - all VPs, SVPs, and EVPs. I figure, if they apply the principles, it's ultimately going to make the company (and me) more successful. All of them have commented positively on the book, and some have in turn passed it along. Whether you are just starting out in business, or have already attained a high level and want to broaden (and brighten) your horizons, this is a must-read that will positively impact your business, and your life.
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Summary: Enlightening, April 29, 2003
Review: This book clarified so many terms and ideas for me I was astounded!! By putting managerial accounting ( a pretty dry subject) into novel form with subplots about real life, I was better able to understand where managerial accounting fit in and how it could be applied to a real life situtation. It kept my interest the whole time, there were times when I would forget I was reading an accounting book. The theory of constraints isn't really a hotbed of suspense and drama but put into this format it not only makes more sense, but much to my amazement was interesting too. A definite must-read for aspiring managers!
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Summary: Fun to Read
Review: The Goal is a wonderful book to read and quite entertaining. Goldratt's use of Socratic reasoning is a great way to approach problems that we face in everyday-life (something that we usually do not take the time to do with our busy lives). The book is very easy to read and a informative. However, the book is too simplified for the real world; after all, it is just a fiction so readers must caution themselves.
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Summary: Helps Shape Future Leaders
Review: I have enjoyed reading "The Goal." It is very educational and many could learn a lot. It is a great resource for managers and potential managers. Also, it should be required for managerial accounting students to read this book. It could enhance their learning and give them a better idea of what managing a company is all about. Not only does this book teach about different accounting principles, but it teaches time management. This was a great book and I recommend that everyone, young and old, take time out of their schedule and read "The Goal."
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Summary: Critique on The Goal
Review: As a college student, this book opened up my eyes on the idea of theroy of constraints. Being that I have never been in an actual plant, I have no idea what exactly goes on there, I just know when I place an order on jcrew.com, some how my order magically apears on my doorsteps in three days. Of course, jcrew isn't the same as the plant in the story, Unico but they both make something and all plants experience bottlenecks. No company is perfect. This book starts off with a guy name Alex who is at his wits end. His plant is going under and he is having marriage problems. I read the book just to keep up what was going on with the wife...(kidding) but The Goal, isn't just about a firm going down, it has interesting plots all tied around Alex. I would recommend this book for anyone who is considering doing something in the business field. Use the book as a guide. Enjoy!
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