The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt

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 problems head on. In this quest, he is helped by his old Physics professor, Jonah. Rather than giving him ready made answers like a consultant, Jonah forces Alex to think by confronting him with pointed questions designed to help him bring out his intuitive skills. When Alex tells Jonah how he was able to increase productivity by thirty-six percent in one department alone with the use of robots, Jonah points it out to Alex how the robots could not possibly have contributed to the company’s goal – and that in fact in terms of its overall goal, Alex must actually be running a very unproductive plant. Prodded on by Jonah, Alex comes to the conclusion that as a first step, he first and foremost has to ensure that his plant makes money.

With a continuous barrage of questions from his teacher, Alex and his team learn how to define measurements so that they better reflect the money making goal of a manufacturing organization. Proceeding systematically, they discover the facts which point to how the bottleneck machine in their plant, or in any plant for that matter, determines the throughput and that the capacity of the entire plant is actually equal to the capacity of the bottleneck. They then devise a system whereby the bottleneck (a machine called NCX-10, in this case ) is kept busy for the maximum amount of time possible – this they do by first ensuring that the NCX-10 is kept running even during lunch breaks and later on by ensuring an adequate buffer in front of the bottleneck so that it would not be idle for want of parts. In the meantime they also save time on another suspected bottleneck, the heat treatment, by relocating ...

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...e omni-presence of two phenomena, dependency and variability, in manufacturing environments, it is vital that the system’s actual constraint be identified – which may or may not be physical. All other policies have to be built so that they work within the constraint. That is to say that the non-constrained resources have to be used to maximize the performance of the constrained resource. The next step is to try and improve the constraint itself, if possible.

Alex Rogo is successful in turning around his plant because he unwittingly, or by design, follows this same ordered thinking process wherein he goes from first defining his fundamental measures and then exploring the effects of different parts of his plant on these measures. He is then able to identify his constraints and effect changes that allow him to maximize his plants performance within the constraint. Later when he finds that his constraint is no longer physical but has become something intangible beyond his plant, he identifies it correctly as a market constraint and tries to improve it by encouraging his sales staff to come up with new orders. And if all this wasn’t enough, Alex has also managed to save his marriage!