The Goal !!!

I purchased “The Goal” by Eliyahu M. Goldratt in 2006. While travelling, I had read the first half of the book till just about the first climax of the story (which I discovered recently). After my trip, I somehow managed to lose it in my shelves and subsequently it became a TBR (to-be-read) item up there. I had never come across a fast, easy read, thriller style management book before. Today I finished reading it and am glad that I did.

The story is about Alex Rogo who is a manufacturing plant manager. His plant is going through a rough time with the revenues falling due to delay in production schedules, backlogs and competition. The company decides to close down the plants which are underperforming. Alex is given a time frame of 3 months to make the plant profitable to the company or face closure. The plant has already laid off 600 people before this. And now another 600 people are in line for unemployment if Alex fails in his measures to turn around the plant’s performance. To make matters worse, Alex is having problems in his marriage. His entire focus and concern towards the situation is seen by his wife as a deliberate attempt to stay away. Consequently, Julie i.e., his wife decides to leave the house. Now, Alex is completely caught up between his family and his concerns to save his plant. At the plant, he is following all the norms that a typical plant manager is supposed to follow. The workers at the plant are always busy and the plant is always operated in full capacity. Yet, the plant seems to be constantly running behind production schedules and is unable to meet orders on time. To improve efficiency the plant has acquired technologically advanced robot machines but matters only turn worse after the same. The backlog of pending orders keeps on piling up even after working on full capacity. The net result being that the local efficiencies of the machines/workers are increasing while the plant would increasingly lack in performance.

Alex decides to consult a physics professor, Jonah, who works as a consultant to manufacturing companies. Alex had worked on a project in his early career with Professor Jonah. Jonah being a very busy man doesn’t have much time to dedicate on Alex’s problems. Nevertheless, he does try to understand Alex’s problems and would constantly challenge his thoughts/ideas on fundamentals by posing questions. At every stage Jonah’s questions are a challenge for Alex and also seek considerable brainstorming amongst his team. The answers to the questions at every step become the guide towards the solution for continuous improvement. The simplicity of the solution always seems to be mere common sense once it is achieved. Here, the ideas to the solutions sometimes came from basic activities say the kid’s weekend hiking expedition for which Alex was the group leader.

The book challenges a lot of conventions and principles and highlights our resistance to change. It lays down the importance of knowing and defining the goals before getting into the process to achieve the same. It defines productive actions as any action which brings us closer to our goals. Hence the book emphasizes on the overall goal of the organization and in turn, aligning the local tasks accordingly. It deviates from the purist aims of cutting costs, reducing wages and increasing local efficiencies in a plant. And instead it focuses on balancing inventory, operating expense and throughput. It argues that making money through sales is the ultimate goal and hence the calculations for all the operations have to be made in the context of the throughput achieved through sales. The idea is to simultaneously aim to reduce inventory, reduce operating expense and increase throughput. The book suggests that a plant in which everyone is working all the time is inefficient. It explains the concept of dependent events and statistical fluctuations leading to bottlenecks/constraints. The bottlenecks/constraints decide the productivity of the plant instead of the local optimums. This lays the foundation for Theory of Constraints. It also lays down a step by step process to counter the constraints. The sequence of events leads to Alex’s plant turning profitable by utilizing maximum capacity of the plant. He is in turn promoted, to seek further challenges in managing the division. Parallel to the events, his personal life also stabilizes. The story ends with the spirit and endeavor to constantly seek improvement by objective analysis, deduction and learning.

The first edition of the book was written in 1984 which was further revised in 1986, 1992 and 2004 respectively. I see the book as completely relevant not only in the manufacturing industry but also in various other sectors like retail, distribution, IT etc. The essence of the book is about Science and Education. Science refers to the deductive process and the manner in which we place our assumptions to explain any phenomenon i.e., the thinking process. Education reflects the need for constant learning from our environment. We also notice in the book that giving readymade solutions to issues is just a recipe for creating further problems. It’s critical to learn and deduce our own solutions for sustaining and improving in the long run. This thinking process can be applied to our personal and professional lives and also to balance the same. It makes us understand that most of our complex problems have very fundamental and simple solutions. Hence objective analysis, deduction and learning can fuel our endeavor for ‘Ongoing Improvement’ in all walks of lives, leading to our GOAL.