The goal how many chapters

Rogo shows leadership, saying;. I say we go ahead with this. And if efficiencies drop, let them. Chapter 27 Video Summary Chapter Rogo delivers much improved results to Bill Peach at corporate. The chapter resolves with Alex and Julie discussing relationships, marriage and goals. Rogo and his team understand constraints, dependencies, fluctuations and the importance of a goal.

Jonah advises to cut their batch size. If our plant is a system, and if our goal is throughput — then smaller batches flow through faster. Smaller batches get results faster, can get tested faster and can accelerate pacing — provided the three cost metrics throughput, inventory and opex remain optimized.

The team cuts the batch size. The customer takes the negotiation and the order is won. Rogo translates his plant learnings into commercial wins. When plant and commercial combine, businesses are capable of phenomenal growth. Rogo is back at corporate, defending his metrics to a snippy Hilton Smyth. Smyth cannot reconcile good financial performance with wasting efficiency metrics.

Rather than search for understanding, he pursues a blistering critique of Rogo. In many ways, Chapter 31 ends a major portion of the book. Rogo reflects on his promotion, and Goldratt uses this to lay out a framework for change management. Rogo faced urgency to turn his plant around. His team created consensus around the Theory of Constraints by experiencing the results and seeing that it explained their situation and prescribed how they should behave.

Rogo continues to prepare for his next role, and as he does so he explores the relationship between sales and operations. The capabilities of the Bearington plant are now known — by following the Theory of Constraints, UniCo now knows how much capacity it has available to sell. Further, by understanding the benefits of the Throughput Accounting method focusing on throughput, inventory and opex , as opposed to backwards looking cost accounting and vanity metrics — Rogo knows that he can bid mor eaggressively on business and still have it create cash flow.

Rogo works with Johnny Johns to negotiate for new business. By starting with his capabilities, which he knows from his work with constraints, he is able to bid and come to terms with customers in new ways.

The team has managed the constraint to the point that it exists at the boundary between Bearington and its customers. By documenting their internal processes, the constraint has been pushed outside.

Rogo asks his team to think about the best ways for him to walk into his next position. They talk through re-organizations, fact-finding and the faddish nature of management practice.

Goldratt positions these as activities that do not serve a goal — they are action for the sake of action and not necessarily effective. There are echoes of modern data-mining, where teams look backwards at data and farm it for results — rather than beginning with a hypothesis and proving it.

The conversation focuses on the value of data and models of systems. Having a model or framework for how a system works is very valuable — without that model it is hard to predict how change can occur. Having an idealized model of how a system should work makes it possible to move towards that system. The combination of data and a model of the system that generates the data is extremely valuable.

Goldratt built the whole book off the foundation of teamwork and data — without these two concepts Rogo could not have succeeded. Chapter 36 Video Summary Chapter Goldratt is using this transition to help the reader take the Theory of Constraints and apply it to any new situation — not just a promotion.

As in past chapters, the plant team serves up strawmen, draws from their experiences focusing on the constraint and the tools they took to setting and achieving their goal.

Chapter 37 Video Summary Chapter Customers had plenty of demand for their products, the team had to be more effective with their constraint. Once the production process was understood, Rogo worked with marketing to pursue deals and opportunities that made use of their increase in throughput to increase their cash flow. This might seem pretty flip — and a reader who had picked up the book and started reading at this page would think any manager who was so cavalier with his business was being too commercially aggressive.

Throughout these challenges Rogo has had great plant data from Ralph Nakamura. Rogo knows he cannot win the business unless he goes for it — and he has confidence in his numbers.

Chapter 39 Video Chapter Systems that worked with less volume struggle to convert the orders into throughput — processes have to be updated. Rogo reflects on his pursuit of the business and realizes that the challenges they face now could have been anticipated. Once a system is mapped and the constraints are known, then that same map can be used to model what is needed in the future!

Chapter 40 Video Chapter The Goal must have been a hard book to finish. Goldratt has promoted some complex ideas and succeeded in making them easy to digest — but it is easy to imagine that he found it difficult to bring everything to a close.

Small wins are necessary to create change — but small wins are not sufficient to create broader organizational growth. Leaders must be constantly looking for a higher order change to promote in order to find bigger constraints to unlock greater throughput. You must be logged in to post a comment. Fred Lybrand. Skip to content. Home The Goal Books About. Readers of The Goal experience a unique combination of styles: This is a first person novel told from the point of view of Alex Rogo, the narrator.

The manufacturing topics are introduced through the tutelage of Jonah, a consultant and former professor to the main character, Alex Rogo. As a novel, it includes family and parenting plot arcs that are also framed within ToC.

If written in — nearly 25 years later — a shorter book would be expected. Chapter 08 Video Summary Rogo takes flack from Peach for bailing out of the meeting in Chapter 4 and realizes that he must track down Jonah. He has looked at cost accounting from the outside and has developed a whole new system because of it. Because of its fundamentals, it should be part of the curriculum of every accounting program. This novel has and continues to help the industry to make strides toward continuous improvement.

The first chapter gets the reader acquainted with Mr. Alex Rogo and his apparent problems with his production plant. This is shown through a confrontation between Mr. Rogo and his boss Mr. Peach, the Division Vice President. The dispute is over an overdue order Peach will not settle for anything less than the order being shipped today, and since the plant is neither productive nor profitable, Alex has three months to show an improvement or the plant will be shut down! You also experience Mr.

By the way, the order does get shipped, but not very efficiently. All hands in the plant are working on one order with forbidden overtime to boot. Peach calls a meeting at headquarters for all plant managers and his staff. At the meeting everybody finds out how bad things are and are given goals to achieve for the next quarter. Through the grapevine Mr. Rogo finds out perhaps why Mr. While at this meeting, Alex thinks back on a recent business trip where he ran into an old physics professor, Jonah, at the airport.

Jonah has no knowledge of where Alex is employed. Johan predicts the problems of high inventories and not meeting shipping dates. He also states that there is only one goal for all companies, and anything that brings you closer to achieving it is productive and all other things are not productive.

Alex decides to leave the meeting at the break. He needs to understand what the "goal" is. After a pizza and a six pack of beer it hits him, money. Rogo sits down with one of his accountants and together they define what is needed in terms of achieving the goal. Net profit needs to increase along with simultaneously increasing return on investment and cash flow.

Now all that is needed is to put his specific operations in those terms. Alex makes the decision to stay with the company for the last three months and try to make a change. Then he decides he needs to find Jonah. Alex finally speaks to Jonah. He is given three terms that will help him run his plant, throughput, inventory, and operational expense. Jonah states that everything in the plant can be classified under these three terms.

This gets Alex thinking of the efficiency of these robots. With the help of the accountant, inventory control woman, and the production manager, Alex discovers the robots increased costs, operational expenses, and therefore were less productive. Implementing the robots increased costs by not reducing others, like direct labor. The labor was shifted to other parts of the plant. After explaining everything, Alex and his staff Bob from production, Lou from accounting and Stacey from inventory control hammered out the meaning of throughput, inventory and operational expense until satisfied.

Lou, states the relationships as follows. Inventory is the money currently inside the system. And operational expense is the money we have to pay out to make throughput happen. Lou explains that tooling, machines, the building, the whole plant are all inventory.

The whole plant is an investment that can be sold. Stacey says, "So investment is the same thing as inventory. But how can they do that without lowering efficiencies? Another call to Jonah is placed and Alex is off to New York that night. The meeting with Jonah is brief. Alex tells Jonah of the problems at the plant and the three months in which to fix them. Jonah says they can be fixed in that time and then they go over the problems the plant has.

First, Jonah tells Alex to forget about the robots. He also tells Alex that "A plant in which everyone is working all the time is very inefficient. According to Jonah, this "is a plant where the capacity of each and every resource is balanced exactly with demand from the market. Jonah says no, "the closer you come to a balanced plant, the closer you are to bankruptcy. Both of those seem harmless and should work themselves out down the production line.

This short chapter tries to capture the essence of the problems the job is causing at home with the extra workload. The marriage is very strained because of the devotion Alex needs to give to the plant. Stuck for the weekend as troop master, Alex discovers the importance of "dependent events" in relation to "statistical fluctuations".

Through the analogy between a single file hike through the wilderness and a manufacturing plant, Alex sees that there are normally limits to making up the downside of the fluctuations with the following "dependent events". Alex discusses this idea with Lou, his chief accountant.

Lou agrees but thinks they need metrics for measuring their goals. Alex calls Jonah and asks for help. Alex needs to figure out whether the plant is making money, so he must measure throughput, inventory, and operating expense. Throughput describes how much money a manufacturing system makes from sales.

Inventory describes the money contained in that system as raw material or equipment. Their conversation is cut short as Jonah needs to leave for his flight. Jonah leaves Alex with a question. Anything that brings him closer to that goal is productive. Any other activity is non-productive! They discuss how they could go about achieving the goal of making money and the new targets.

Alex runs the numbers, the new targets seems almost impossible. Their conversation goes late, and Alex finds himself in trouble with Julie again. Returning home from work late, Alex is surprised to be greeted by his daughter Sharon.

After tucking Sharon into bed, Alex returns to thinking about his work situation. He realizes that he might need more guidance from Jonah. At work the next morning, Alex tries to call to apologize to Peach about missing his meeting the previous day.

Unable to connect, Alex decides to try Jonah instead. Throughput is the rate at which the system generates money through sales. Inventory is all the money that the system has invested in purchasing things which it intends to sell.

Operational expense is all the money the system spends in order to turn inventory into throughput. The head of UniCo arrives for a photo shoot with the factory robots. This causes Alex to reflect on the viability of the robots. Alex pulls together Lou — the head accountant, Stacy — the inventory control person, and Bob — the production manager to discuss the robots.

During the discussion, they discover that the robots increased operating expenses but did NOT reduce any costs. Not even direct labor. The costs were merely shifted to other parts of the plant. Since operating costs stayed the same and throughput did not increase, the profits of the plant actually decreased as a result of adding the robots!

Alex and his team Bob, Lou and Stacey reviewed the meaning of throughput T , inventory I and operating expense OE until they reached agreement and understanding. Lou, summarized. Throughput is money coming in. Inventory is the money currently inside the system. And operational expense is the money we have to pay out to make throughput happen.

Bob was suspicious that everything could be accounted for with just 3 measurements. So Lou explained that tooling, machinery, and the building are all just various forms of inventory. But they were not clear on how what they could do that would not lower the plant efficiency.

So, it was clear that another call to Jonah was in order. To catch up Jonah, Alex needed to take a trip to New York. Jonah listens, then assures Alex that the problems they discussed could be resolved before the deadline. First, Jonah advises Alex to stop focusing on the robots.

And to forget about chasing efficiencies. After all,. Of course, Jonah needs to leave. But he gives Alex another clue. Returning home, Alex argues with his wife about not answering her phone calls. At this point their marriage is very strained. Alex promises to set aside some time for her and his family over the weekend. On Saturday morning, Alex awakes surprised to find his son Dave dressed and ready for the hike he had promised.

During the hike, the troop keeps getting separated and spread out in distance. This helps Alex to discover the true meaning of dependent events as related to statistical fluctuations.

A manufacturing plant and a single file hike through the mountains are a good analogy. Thinking about the similarity helps Alex understand the difficulty of making up being on the downside of fluctuations following dependent events. The last event would need to make up the difference of all the down fluctuations to average things out.

To understand this effect more fully, Alex creates a dice game and instructs the Boy Scouts on how to play. The game makes it clear that a balanced plant with statistical fluctuations and dependent events will experience throughput decreasing and inventory going up.

This means that Jonah was correct that a balanced plant is not the answer. The next day, the troop resumes the hike. This time, with new understanding, Alex asks the slowest kid named Herbie to lead.

In addition, he distributes some of the weight that Herbie was holding in his backpack. Julie is missing on Sunday evening when they return home from the camping trip. Julie left a note for Alex. In the note, Julie explains her frustration about Alex spending all his time at the office and has again broken his promise to spend time with her.

After several calls to friends and acquaintances, Alex is unable to locate Julie anywhere. He is able to prove his point by completing a large, overdue order using these principles. The starts to buy-in and even the skeptical production supervisor agrees. So now, Alex ponders … now what? The team is beginning to trust Alex and appears ready to proceed. But Alex is unsure about what to do next. Time to reach out to Jonah again. A bottleneck is any resource whose capacity is equal to or less than the demand placed upon it.

A non-bottleneck is any resource whose capacity is greater than the demand placed on it. Jonah continues to explain that Alex should NOT make the mistake of balancing capacity with demand. Instead, Jonah explained he must balance the flow of product through the plant. Now Alex and his team need to find their bottleneck.

They identify the NCX machine and heat treatment. Jonah visits the UniCo plant in person. He shares that every plant should have a bottleneck, and that a system can only increase output by increasing output at the bottleneck. Alex wonders what he needs to do to increase the capacity of the plant? A number of questions were asked and answered.

What is the cost when the bottlenecks NCX and heat treatment machines go down? How much does it cost when the whole plant stops? And, how many working hours are there in a typical month? About hours. He explains that the output of the constraint is the output of the entire plant.

A minute of down-time at the constraint translates into a minute of lost output and throughput for the entire plant! Work for the constraint is prioritized so they work on the most overdue orders down to the least. While this plan is being executed, Alex discovers Julie has been staying with her parents.

When they next talk, he tries to convince her to come home. She declines, insisting that she needs more time. The UniCo team creates a detailed plan to ensure the bottlenecks are fully utilized. In doing so, they discover that they need to be clear about the priority sequence at non-bottlenecks as well. Red and green tags are used to map priorities visually. Red tags are for bottleneck parts and should be worked on first. Green tags are for non-bottleneck parts which are second in priority.

In an attempt to make up with Julie, Alex asks her out for Saturday.