A Critical Thinking Review of
The Goal: A Process of Ongoing Improvement

Introduction:

The Goal is a well-written novel that illustrates a model for systems and operation management. Reading through this book gave me an insight to the amount of effort that goes into managing a plant with all employees as well as keeping your home together.
The main character, Alex Rogo who is the plant manager, is found in a dire situation with his plant on the verge of being closed down. He is given 3 months to turn the plant around and make it profitable. Alex comes into contact with an old professor, Jonah, who helps him along the way by teaching him successful methods of running a production plant.

Meeting Number One

* Initial state: Alex is a manager of a manufacturing plant when he happens to bump into Jonah, a Physics Professor, in the airport. Alex is trying to get Jonah to remember him while Jonah is attempting to catch his plane. As Jonah is heading to his terminal, him and Alex are conversing about the plant and how great Alex believes that his machines are. * Advice: During this whole conversation Jonah is asking Alex, is his plant making any money from the machines and are they being truly efficient? At the time Alex did not get what Jonah was referring too. * Actions taken: At this point Alex did not realize how dire his plant was performing. * Results: Jonah had to catch his flight and the two went their separate ways at that point. Alex continued to ponder on what Jonah meant by those questions.

Meeting Number Two

* Initial state: Alex has just found out that his plant is in danger of closing its doors, which would cause him and the many people that work for the plant to be out of a job. Alex remembers the conversation he and Jonah had in the airport. So Alex rushes over to his mothers house late at night in effort to find an old phone book that he keep with all numbers that he use to have, including Jonah’s. * Advice: Alex finds the phone book with Jonah’s number and decides to call him. At this time he could not immediately get into connect with him but he left a message for the person that answered the phone. When Jonah returned Alex’s call, Alex explained to him the state of his plant and how he only has three months to turn it around. * Actions taken: During the conversation, Jonah asks him several questions to analyze his company’s situation. The conversation leads ultimately to the question, “What is the goal of any business?” * Results: Alex was forced to think of what Jonah was trying to relay to him. After rethinking the conversation, Alex realizes that the “goal is to make money”. Furthermore, “the goal is to make money and any action toward that goal is considered to be productive and any action not moving towards that goal is nonproductive”.

Meeting Number Three

* Initial state: After Alex has concluded that the Goal of his company is to make money. Alex contacts Jonah again to continue the search for more answers. * Advice: Once Alex contacts Jonah they define the measurements to define the success of any plant’s production. Alex writes down key terms that he will follow to get his plant back on track, like: throughput, inventory, and operational expense. Jonah explains to Alex that a “plant that is continuously productive is considered inefficient”.
Actions taken: Alex assembles a team from across the different functions of the plant. The team consists of production manager, inventory manager, head accountant and marketing manager. They are able to help Alex get a clear picture of what is going on in the plant in terms of the newly developed goal. * Results: Based on the facts that Jonah has pointed out, Alex would need to reduce operational expense and inventory to improve throughput to demonstrate a balanced line of production.
Alex learns that the newly purchased robots that were suppose to increase productivity and plant efficacies are not doing what they were believed to be able to do when they purchased them. * I believe this relates to chapter 5 in the textbook that talks about statistical process control.

Meeting Number Four * Initial state: With his new team in place, Alex found the issue with the robots that are causing his company to lose money. Alex talks to Jonah again to tell him the problems that he is now facing. * Advice: Jonah introduces the concepts of dependent events and statistical fluctuations to Alex. Jonah informed Alex to a new term called, a bottleneck. Which basically means that the robots are not as productive as they could be and that they are holding up his production in his plant, therefore reducing throughput.
Actions taken: While on a hike with his son’s Boy Scout troop, Alex comes up with a way to improve productivity. * Results: After Alex’s hiking trip with the Boy Scout troop he shares his revelation with his team about dependent events and statistical fluctuations. He sees that the capacity of a system is limited by bottlenecks within the system. * I believe this relates to chapter 7 in the textbook that refers to capacity and facilities design.

Meeting Number Five

* Initial state: It is apparent to Alex and his team that their figures for how much it costs to run the bottleneck are all wrong. * Advice: Jonah tells Alex the actual cost of a bottleneck is the total expense of the system divided by the number of hours the bottleneck produces.
Actions taken: Alex and the team learn the only way to reduce the cost and make the bottleneck machines more productive is by maintaining a flow sufficient to meet demand and make money through finding added capacity. They move quality control to a point in the system that occurs before the parts reach the bottleneck machines so that parts that don’t meet their quality standards can be scrapped before the take up capacity in the machines. They also implemented a tagging system that places priority on the backlogged orders so that they can catch up. * Results: Alex and his team learn that they need to balance flow in the plant not capacity. Alex and his team restructured the process of operations so that no capacity is wasted with their bottleneck machines. As a result, the plant begins to experience positive effects of the changes. The company started to become more profitable.

Meeting Number Six

* Initial state: At this point Alex and his team have turned their plant around and things are starting to look up. The plant is making money and backlogged order have been shipped out the door. However, some problems do occur. They are able to diagnose the problems with the help of Jonah. The new problems faced are the non-bottleneck machines have excess capacity because materials are being released faster than bottlenecks can process it. This eats into profits through increases in inventory and operating expenses. * Advice: Jonah ends up actually coming to the plant and meeting with the entire team. Alex learns that by decreasing the batch sizes he can reduce the lead-time on orders and respond faster to market demand.
Actions taken: The technique that was given by Jonah allows Alex’s company to further increase its throughput and its sales. * Results: Due to this Alex’s plant is able to achieve the overall goal in making money. * Alex and his team are implementing a type of Forecasting to not create non-bottleneck into bottlenecks, which this is referred to in chapter 12 of the textbook.
Meeting Number Seven

* Initial state: Alex’s plant is doing great and he just got a promotion to become the district manager over 3 plants. He then contacts Jonah to give him the great news and ask for more advice on how to manage a wide range of plants. * Advice: Jonah leaves Alex to wonder how to manage multiple plants while having them all reach the same overall goal.
Actions taken: Alex communicates with his team about the promotion and asks them to come with him to his new position. Some took his offer and some stayed with their job function. * Results: Alex then has a meeting to discuss how to run his new division.

Meeting Number Eight

* Initial state: Alex and his team determined techniques for effective management. * Advice: The conclusion that they come to is the Socratic / scientific method of analyzing a problem.
Actions taken: Through this process the intrinsic order of things can be determined and basic assumptions can be used in the decision making process. * Results: Alex concludes that the purpose of the organization requires the synchronized efforts of more than one person and the performance of the organization if largely dependent upon the performance of individuals.

Learning Summary:
The most powerful and fundamental concept that I learned this semester was: the process of business operations. Learning the different functions of operation management such as Aggregate Planning, Inventory Management, Production Management, Scheduling, Quality and Reliability have all gave me a better understanding of the concepts for operations management and business operations. These listed concepts all play vital role in any corporation and all need a person who specializes in each field to have a successful company.
I would personally apply these major concepts within my job for the many design projects that I work on. Being able to successfully manage each one in the proper manner will ensure an on time delivery with a quality product.