In the book, “The Goal”, (Goldratt, 2004) by author Goldratt, the writer offers us a business book that is not only educational but entertaining, as well. We are told about a character, in this fictional story, by the name of Alex Rogo, who is a company manager at a metal working plant, and it is easy to see that both his profession and marriage are in trouble. He must think quickly to gain ideas about saving his company.
The company that Alex works for is behind schedule and he is given an ultimatum. Alex Rogo is given a short period of 90 days to get his plant back on track and in good running order and when he remembers an old friend, by the name of Jonah, he then learns about the Theory of Constrains. Alex and Johah talk on the phone many times and have several business meetings which offers Alex new ways of thinking about business.
Rogo has to look deep into various areas for problem solving and decide what needs to be changed or altered, and how he must then go about making these important changes for the steel-working company . He must also increase Throughput, reduce the inventory and operating expenses, at the plant.
We learn from this book that throughput, (T) is the rate in which the system produces funds from the number of sales. He uses (I) inventory to represent the total that the system invests and needs to sell. (OE) stands for the total expenses Alex Rogo must invest to operate, in order to change inventory into throughput.
This book offers a great story line, while teaching readers so much about how to operated a business and to bring a company that is failing up to point to where it starts to generate money. We also learn how to make a company more productive than it is so that it can generate more cash flow for profits.
The author also teaches us how to use the Socratic method in making one think and also Goldratt utilizes Socratic questions to cause one to think differently about business.
Using strategical business methods, the author uses his character, Alex Rogo to try to get his employees motivated, in order to build a more successful company. The author uses models, like a game that uses bowls and matchsticks, in his entertaining demonstration.
In this book, we watch as Alex Rogo tries so hard to turn his company around and the author makes this story personal, as you hope that Alex and his wife will patch things up.
The goal of this book is to teach about economics in business. We learn how to make a company successful, by using productive methods in running a business, successfully. We learn to focus on quality in the company and also how to minimize cost by eliminating things that we don’t need.
Goldratt teaches about bottlenecking or constraints in manufacturing. We learn how to identify these problems before solving them and we also learn from the author useful ideas to generate productivity. The five steps that Alex Rogo and his employees carefully utilized in fixing the problems, at the plant eventually bring tremendous success and we learn that these critical methods in business are necessary. We also learn that the steps that Johah taught his friend, truly did work! In the business world, sometimes it is extremely important that we talk to other individuals, who possess knowledge in the field that we are working in.
We learn that by finding sources that can help us and working together as a team, after discovering what the problems are in a company, it is highly possible to revive a dying company, if everyone pulls together and works toward a specific goal, which is running a company and running it, productively.
During this story, Alex Rogo and his wife do get back together and the book eventually ends, happily. We not only learned how to make a company earn profits, but we learned that everything can turn out good in the end, with hard work and determination. Alex Rogo had both, we learn in this educational story, and his employees and company and his marriage were better off because of his unending attempts to turn things around.
“The Goal: A Process of Ongoing Improvement” is an incredible educational tool for anyone thinking about operating a business. We are given many good ideas and examples in this story, which we can use to be more productive in our work and make our companies more successful.
I would highly recommend this book to everyone and especially to business students who are working toward management positions. The five steps which are demonstrated in this book can be beneficial to anyone who applies them and should prove to raise profits and moral in any company.
Eliyahu M. Goldratt was wise to use this fictional story, in order to hold the attention of his reading audience, as he teaches about being better leaders.
Goldratt, Eliyahu M. (2004). “The Goal”. North River Press.