In "The Goal: A process of Ongoing Improvement” Eliyahu M. Goldratt describes how a common sense approach can be effectively used to increase the goal of an organization, which is to make money. The story begins with how, Mr. Alex Rogo, the Plant Manager who is an overlarded circuit is struggling to keep up with the backlog customer orders. He seems to be in a fire-fighting mode all the time with no obvious strategy in place. He receives an ultimatum from his boss, Mr. Bill Peach, the Division VP that his plant will be shut down in 3 months if he doesn’t show improvement.
Mr. Rogo recalls his conversation with Mr. Jonah, Mr. Rogo’s physics professor whom he meets at the Airport few years ago. The questions Mr. Jonah asked during their meeting at the airport coerces Mr. Rogo to change his thought process about fundamental things in the sequential order given below:
“What is the Goal of an organization?” “What are the simple measures to assess the progress of his plant towards organizational goal?”
“How to effectively run a plant?”
Mr. Rogo, under the guidance of Mr. Jonah, discovers that the goal of an organization is to make money. The simple measures to assess the progress of goal are Throughput, Inventory Management and
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Rogo notices that the slow kid Herbie is the one who is holding up the line. By placing the slowest kid Herbie in the front of the hike and removing extra weight from his back pack, balances the fluctuations and increases the kid’s productivity, which increased the throughput of the team. With this sequence of events, he draws a correlation with his plant and discovers that the bottlenecks define the maximum capacity the plant can produce. Another real life example during the camping trip, with dice and match bowl game, Mr. Rogo discovers that because of the statistical fluctuations and dependent events having a balance plant with the market demand is not an ideal
Introduction: The Goal, written by Eliyahu M. Goldratt and Jeff Cox, is a management-oriented novel that illustrates the process of ongoing improvement. The novel revolves around several significant characters, including the main character, Alex Rogo, who is a manager in a manufacturing plant. Another prime character is Mr. Bill Peach, the vice president of the manufacturing plant. Lastly, the key character in the novel is the physicist, Jonah, who was a former professor of Mr. Alex Rogo. There were some other characters too, but these were the most fundamental ones.
The Goal is a story about overcoming manufacturing problems that is told through the eyes of a plant manager, Alex Rojo. Alex arrives to work one morning only to discover the division vice-president, Bill Peach, showed up unannounced to see the status of a specific customer order number, discovered the order was incomplete, barked orders at employees to assemble the products, and finally informed Mr. Rojo he has only three months to improve his plant's performance before it's closed because the plant cannot get orders out the door on time. In fact, the order Bill investigated was already seven weeks late and the product not even assembled. After Bill departs, Alex heads to the floor to discover Bill's unexpected arrival has created more problems. The master machinest Bill yelled at before Mr. Rojo arrived quit but only after setting up a machine to complete the seven-week-late order that Bill demanded be shipped out today. The machinest, however, forgot to tighten two adjustment nuts on the machine so several parts must be scrapped, but even worse is that the machine, which just so happens to be the only one of its kind in the plant, is broken.
In The Goal: A process of ongoing improvement, Eliyahu Goldratt uses a form of literature that can be used even in today’s society to introduce his business theory of constraints. This theory is based on a chain with shortfall link in it. Basically, when analyzing any multipart system at any specific time, you will find the area of the system has a limited ability to maximize its goal. In order for this system to accomplish significant improvement it’s necessary to identify the constraint and redefine the system. Goldratt offers a great deal of information that is so basic to today’s management system that any who reads could absolutely benefit from.
Eliyahu Goldratt's "The Goal" is an entertaining novel as well as a thought-provoking business book. It is about a plant manager, Alex Rogo, whose plant and marriage are going downhill. He finds himself in the enviable position of having 90 days to save his plant. A meeting with an old acquaintance, Jonah, introduces him to the Theory of Constraints (TOC). The main character of the book is Alex Rogo, a plant manager working in the UniCo Manufacturing Corporation, located in a declining industrial town.
A good specific indicator can the companies use to measure progress and performance is by having a list of questions to be answered from both companies and see how satisfied are they.
Many people believe that in order to succeed in a business that is having difficulties, it is important to focus on a particular area in order to be better productive in each of them, and be able to reach the goal. Instead, Goldratt and Jonah demonstrates that is important to focus on the company as a whole, but at the same time, it shows that it is incorrectly to only focus in an specific manufacturing department, or one plant, or a department within the plant, because people should not be concerned in local optimums.
The Success Measure: The success measure is to maximize the daily operating profit and to gain market share.
Operations are all the processes in transforming inputs into desired outputs. These processes must be efficiently and effectively coordinated by managers and eventually they must accomplish specific organizational goals. All operations, despite how well managed they are, are capable of improvement. In order for the operations to be improved however, weaknesses should be identified first. Therefore operations need some kind of performance measurement as a prerequisite for improvement.
Ensure that effective measurements and monitoring mechanisms are in place to determine whether implemented solutions have yielded predicted benefits and to drive continuous process improvement.
Goldratt takes a very practical example of today’s world, an Engineer with an MBA degree, Mr. Alex Rogo, as his protagonist and his struggle to get a loss making company to a profit making one along with his family in the back-ground, obviously an important one, to explain the drudgeries of a manufacturing engineer’s life. Goldratt explains several management skills to be inherited in any professional’s life with ease, in this thought provoking novel based management textbook. The ideas expressed in this book, although difficult to be digested normally, are easily conceptualized in the form of a novel, which any professional can easily relate to.
From what I haven taken from this book, I have come to a conclusion that with a few steps, you can find a way to make your company productive and meet the overall goal of your company. A clear understanding of what your company’s goal is and to be able to use this goal to understand what being productive means in terms of your company. Knowing the measurements that are needed to reach your goal. The ability to try new experiments and be able to brainstorm and talk together with a dedicated team of researchers that want to reach the goal and wont stop experimenting different processes until the end goal is met.
Establishing metrics is crucial to any organization, especially in technology related company projects. Metrics permit organizations to measure its performance against industry sectors to determine how well the company is doing. Furthermore, metrics allow organizations to evaluate and improve the effectiveness and efficiency of its processes. Metrics are designated in different categories. The categories identified in this document include output, in-process, and people. (Duris 2003) The organization must first determine exactly what the company is trying to accomplish or determine. Metrics are then identified based on what is relative to the subject matter. Finally, metrics are verified when tracking progress against previous records or a company given standards or goals.
‘If you can’t measure it, you can’t management it’, [Dan vesset and Brian, M. 2009]. Performance management is concerned with the measurement of results and with studying progress to achieving objectives base on the results. Managing performance can tell you what you’re doing well in, and also reveal areas where you need to make adjustments. Measuring performance tells you how far you’ve gone achieving your ultimate
The lack of success at Omega, Inc. rested in the hands of an incompetent sales staff who were not informed of the company’s mission statement and goals. The staff received limited training on the jobs they were to perform. Omega was faced with the challenge of getting the employees to achieve their sales quotas. According to (Aguinis, 2007), “There are two important prerequisites required before a performance management system is implemented: knowledge of the organization’s mission and strategic goals and knowledge of the job in question.” The benefit of superior knowledge of the organization combined with clear and agreed upon mission and strategic goals of their unit would afford employees the opportunity to make contributions that will have a positive impact on the organization as a whole. In addition, one must possess the knowledge of the job in question to execute the tasks necessary to be done and how they should be done. This knowledge is obtained through a job analysis. Omega failed to implement strategic planning throughout all the franchises. According to Aguinis (2007), “Strategic planning allows an organizati...
Traditional performance measurement designs system of measures that mostly are cost-efficiency-oriented and are measured only in financial terms. This system does not provide non-financial measures that are also link to the organization’s business strategy. The application of this system is basically suitable for mass production companies with the purpose of minimizing cost.