Unlike almost every other educational business books that talk about facts and theories one after another, "The Goal" is different in that the author presents and details his things in the form of a fictitious account, he creates a character and details his work, family and life interactions and experience.
I found myself interested in the character, the situation he found himself in and how he would extradite himself and his manufacturing facility from a situation that seemed basically doomed. With all the pharmaceutical plant I work in due to close down in the next twelve months I could really relate with some of the themes that are frequented in the booklet and everything being said discovered that as well as the key approaches and techniques that were described, the publication is also very much a positive and motivational source.
The first few chapters create us to the reports protagonist Alex Rogo "only herb controller" who has the unenviable process of supervising a manufacturing plant that is battling to survive. One day after arriving into work Alex is met by his boss Mr. Peach, the Department Vice Chief executive who makes it clear that unless Alex converts things around in the vegetable within 90 days that it will be closed down down.
The inefficiencies and dependencies that can be found in the seed are right away helped bring home by the overdue order #41427, the grasp machinist that quits and the need to really have the NCX-10 machine "the only person of its enter the flower" ready to go to complete the order. The fact that late purchases are considered the norm signifies that things aren't heading well but really they are just a symptom of the many problems present.
Although it offers only been half a year since Alex took up the job and changed himself, his better half and children to his home town the pressure is starting to mount, his wife is starting to feel that he's neglecting her and their children. The neighborhood publication has run an article on him and he can see the steady decay and loss of businesses in the immediate area, what's on the line is put into perspective.
Chapter three and Mr. Peach has called a meeting at UniCo's headquarters for everyone his immediate staff. It's as of this meeting that the true picture of how lousy things are is disclosed to all present. Alex finds out that the complete division has a year to boost or that too will be eliminated, but he cannot concentrate, his focus has gone and he reminisces on a chance appointment at O'Hare international airport with a vintage acquaintance Jonah a physicist or more to the idea a scientist, currently doing work in the science of manufacturing company.
It's very clear that Jonah is actually the alter ego of the catalogs author, he has written himself into his own book, the similarities between them are plain to see for the reason that the author is an Israeli physicist who naturally has become a management expert. We'll see as the publication progresses that Jonah will impart onto Alex essential information and course much like the author does to the reader.
What makes Alex remember the fortuitous meeting they had is the fact that somehow Jonah with no prior knowledge of Alex's employment can, based on a few simple questions about the launch of robots, anticipate the shortcoming of the herb to meet shipment dates and the high inventories that can be found. Jonah also puzzle's Alex with finding what the main one goal for any companies is?
Having got enough of the conference Alex strolls out to clear his head, the idiom is usually that "requirement is the mother of invention", however, in Alex's case from the pizza and a 6-pack of beer, the goal becomes obvious, to make money, and any activity that brings the business nearer to acquiring it is beneficial, all the activities are non-productive.
Alex sits down with Lou his plant controller and between them they try and establish what the minimum amount measurements that they might have to have in place to create if the flower is making money. It's not as easy as it appears to be, expressing the target does not give itself well to daily businesses of a developing organisation, they struck a roadblock, going to sleep that evening he resolves to try and save the plant and to do that he must contact Jonah.
From his mother's house Jonah is approached again, what's established is that the goal remains the same but it could be expressed in another manner, Jonah has a set of measurements that share the goal of making money, there are three of them:
(1) Throughput-rate at which the system generates money through sales.
(2) Inventory is all the amount of money that the system has committed to purchasing things where it intends to sell
(3) Operational charge is all the amount of money the machine spends to be able to carefully turn inventory into throughput.
Using these measurements probably everything in Alex's flower is covered.
Chapter 9, as he leaves his mother's house Alex realises that any business would like to have an increase in it's throughput and to reduce operating expense and inventory, even better would be if these occurred simultaneously, this is actually the way to best express the goal. Back again at the job in the place he assembles a team of his acquaintances and explains "the target" and the necessity to carefully turn the flower around in three months or face closure.
What he discovers is usually that the launch of the robots has increased the expenses, operational expenses and that immediate labour has only transferred around the seed, no efficiency or cost savings has been gained. All present agree immediate action is necessary, specifically with regard to the robots, Johan is again called, however, a night time flight to New York is required, his partner is far from happy.
Over breakfast time Jonah, instructs Alex that only he and his team can save the herb by showing advancements within the three month period, he's struggling to help directly credited to his active timetable and commitments.
Just like those who browse the book, the ability to effect change for the good is up us and also in the way that Alex must figure out for himself this is of the two phenomena of reliant events and statistical fluctuations. Alex is to call Jonah when he can tell him what the blend of the two mean to his seed.
So Jonah cannot just give him immediate instructions, real understanding is gained in working it out for oneself, again this pertains to anyone reading the reserve. Effectively we've been given the tools.
This then leads on nicely to the scouting expedition as referred to in Chapter 13, here Alex faces a constraint in the form of the slowest boy in the group, Herbie.
This is a perfect situation where he gets to see a real situation involving the two concepts Jonah talked to him about "dependent occurrences" (situations in which the output of 1 event affects the input to some other event) and "statistical fluctuations" (common cause variants in output variety or quality), as illustrated by the rolling of the dice game.
What he discovers is the fact that in a string where operations are reliant on one another, statistical fluctuations can occur at any point along the way. These cause time lags between your procedures that can gather and be more clear the further down the chain you go, the result is the fact that performance becomes worse than the average capacity of the constraint, this combined with the undeniable fact that throughput is governed by the slowest moving part in the process, Herbie regarding the marching column of scouts.
By moving him to the front of the brand and lightening the load in his backpack, the overall rate of the scout column is greatly improved, he has lowered the inventory and increased the throughput. Similarly a successful milestone in understanding has been reached, on the other he happens home to find that his better half has still left him.
I believe this second concurrent theme (Alex's family life) that the writer describes throughout the storyline, is to emphasize another balance that needs to be come to, that of a work and family life. The thought of achieving a balance is a theme running through the complete book.
On the next call to Jonah, the team are built again and they are advised to
distinguish between two types of resources in the flower, bottleneck and non-bottlenecks. Bottleneck are any resources whose capacity is add up to or significantly less than the demand put after it, non-bottle neck of the guitar are any reference whose capacity is higher than the demand put on it. Jonah advises them to balance movement of product through the flower rather than capacity. The duty that is defined to Alex this time, prior to inserting the next call is to find what bottlenecks they have got, if any?
After a time, the team uncover the bottlenecks within the vegetable, the areas where capacity and demand aren't identical, that NCX-10 machine again can be used as a good example, inventory is stacked up beside it and training on it takes six months, another example is the heat-treat team, furnaces jogging half empty. The issues from the bottlenecks aren't an easy or quick fix for Alex, the production process cannot be changed around so easily, so he packages to carefully turn the bottleneck to non-bottlenecks by increasing capacity, but the costs involved to do this won't run with Mr. Peach, especially at the moment, given the entire state of the company and an impending site decision.
Chapter 19, as he's relaxing around the breakfast time table with his mother and kids we learn that Jonah is coming to town, specifically to visit the place. Jumping straight into it, Jonah sets himself on the shop floor and trips the bottlenecks, what's required is to boost the capacity of the bottlenecks, essentially a seed without bottlenecks has excess capacity, every seed must have bottlenecks. This idea confuses everyone at the appointment, why should bottlenecks be there?
So that the bottlenecks can become equal to the demand, this can be attained by increasing the capacity of the bottlenecks by taking advantage of their concealed capacity. Hidden because they are not self-explanatory or obvious, an example explained in the e book is the heat treatment machine, the true cost per hour the device is down is determined with Jonah's help, it's an vision opener for those present from what they believed to be $21 dollars one hour is in reality $2, 735, each is flabbergasted.
A system of tagging the overdue purchases in put in place by Alex, along with moving the QC trials to a spot before the heat treatment process, this reorganising of the bottlenecks should improve efficiencies along with the implementation of new rules for lunch break breaks. The saga along with his wife continuous, with no need for an exclusive detective he tracks her right down to her parent's house, a fresh start is required, very much much like situation in the plant, he is heading to have to change too.
Chapter 22 and the herb is needs to see some advancements, twelve orders have delivered and the lead time on the overdue items have reduced, the production manager has curved up some old zmegma machines that will assist with capacity, however, there is still room for improvement.
A new set of problems become evident. Some parts are spending a lot of time in the furnace and there continues to be down time on NCX-10 scheduled to staffing levels. The solution for both problems is to dedicate staff which will be entirely stationed at the machines. Alex let us it be known to the foremen on the heat-treatment machine that there will be great rewards for anyone that can improve the end result of the heat-treated parts. It does not take miss one of the night shift foremen to create a means of handling more parts by combining the parts by top priority and sorting the stacks in advance, efficiency increases 10 % because of this, it also works out that some of the parts may not need heat treatment in the end, twenty percent in truth, more very good news.
Chapter 24 and the champagne has gone out, a new herb record in shipments of product has been established and a twelve percent net decrease in work-in-process inventory, even Monthly bill Peach is on the phone thanking him for the improved upon customer service. The occurrence with Alex slipping in the entranceway of his house with Stacey is amusing, timing is obviously not one of his good things and again he is in the wife's bad books, will this switch for the worse with his personal romantic relationship be reflected / mirrored with a work problem? You guess it'll.
Apparently new bottlenecks are revealed as the inventory decreases. This example is nearly the same as the "Sea of Inventory" example employed by Taiichi Ohno, the daddy of lean developing, and is commonly used in Low fat (Method 4) trained in the pharmaceutical industry. Ohno talked about a boat that is sailing across a sea of inventory. Every waste in the machine is like a concealed rock in the bottom of this sea which could possibly sink the boat. When the tide is high, no rocks (problems) are seen, however when the tide decreases (eliminating inventory) the dangerous rocks are revealed. Eliminating the visible rocks is important.
Just as well Jonah's coming to the herb again and what he discovers is that working the non-bottlenecks to capacity with bottleneck parts has resulted in there not being enough time to process the parts, the key to resolving the issue is obtaining balance in the operations and developing a signalling process.
This is where the computer expert Ralf shines, using traditional data obtained from the bottleneck parts, he is able to produce an accurate timetable for when they have to be released, the effect being that inventory is reduced at the front end of the bottlenecks and non-bottlenecks. Jonah needs to be retained in the loop with how things improvement.
At another big corporate appointment Alex details the advancements in results, without describing how they were achieved, in his opinion he has not received enough reward for the results they've obtained, on talking to Monthly bill Peach he wishes to really know what it will require to keep carefully the plant wide open, fifteen percent improvement in the next month to ensure the plants future, so near to the finish lines, the backlogs have been basically cleared so where will the orders result from?
As for his romance with his better half that too is near being solved, balance in work and family ratio is required to get things again on the right track, so similar to the plants balancing requirements.
Chapter 28 and the telephone wedding rings, it's Jonah in Singapore, he'll be unavailable for another few weeks, however, he does indeed give Alex the "next logical steps" to progress, trimming the batch sizes in half on non-bottlenecks, thus reducing the amount of cash tangled up and easing cashflow, negotiations with the vendors would be required, worthwhile for the faster response times and reduced order lead times. Now you have to place the improvements to the test, ship 250 model 12 products weekly for a month, attained by utilising smaller batch sizes model.
The auditors from head office have came on site and discover only a 12. 8% improvement, what's interesting here is the way author describes the reaction of the accountants when they notice the change in way the costs are established, how it is rather "irregular", the same kind of response he gets the next day at divisional head office meeting. These individuals are making decisions and judgements based on tradition rather than critical thinking, they cannot grasp the big picture that "the goal" is to generate profits not solely reduce costs. All's not lost as Alex has been advertised to lead the section, luckily some can recognise the fantastic work he did. Alongside the good news from work from the perfect time for Alex and his wife to patch things up between them. By building his priorities he has found the balance between work and family that he lacked in the beginning of the book.
What's now required is a way to recreate the lessons discovered, his team for department is assembled and between them they trash out the rules that can be applied across the board, these are the following:
Step one - identify the systems constraints;
Step two - decide how to exploit the systems constraints;
Step three - subordinate the rest to second step decisions;
Step four - evaluate the systems constraints;
Step five- If in the last steps a constraint has been busted, go back to the first step, but never let inertia to cause a system constraint.
Alex has come a long way, what are the main element things that's he has discovered on his voyage, production can be an ongoing process of improvement, and when new problems happen they have to be handled accordingly. He evolves his own questions: What things to change? What things to change to? How to cause the change? Responding to these questions are the secrets to management, and the abilities had a need to answer them signal of your good director and eventually the answer to Jonah's question.
Conclusion: THE TARGET is about making effective and educated decisions, and in that respect it truly succeeds, it educates the reader by providing concentration and direction though the characters identified in the publication. Clever details by the author throughout the book facilitate it's relevance, for example by not entering detail on what's specifically being produced in the place the author is rolling out a way of motivating the audience to give attention to the process and the decisions being made rather than the product itself.
The fact that it was initially printed in 1986, is extraordinary, for a small business e book to be still relevant after one fourth of a hundred years shows how relevant and true the established rules are, many of the items in the publication are mirrored by current trends in the pharmaceutical industry to make use of lean thinking in regards to to methodologies and tools for transforming processes to provide customer value faster, improve work stream and eliminate waste material.