The Goal Report

Identify the system’s constraint itself. Learning that the true constraint is often a lack of availability of a specific skill or piece of equipment is helpful in quickly identifying the constraint, and the manager is encouraged to continually ask “why” to diagnose the constraint.

Some of the operating expenses incurred would be selling, general, and administrative; also research, development, and engineering. They are treated as period costs because as they are accrued or incurred, they are allocated for a designated period an labeled as period costs. Two common examples of period costs are Marketing/Selling and Administrative. Such costs usually occur either after the manufacturing stage or outside the factory.

It is stressed in the Goal that there is a massive difference between throughput and efficiency. The novel makes the case that having an efficient operation does not equate to profitability. What does equate to profitability is to increase the throughput of any given operations system. Jonah tells Alex, “Throughput, is the rate in which the system generates money through sales.” (Goldratt, E.M. (2014), The Goal, pg. 60). Jonah goes on to explain to Alex that inventory is all the money that was invested in purchasing things that the system intends to sell. (Id). Furthermore, operational expenses are those costs that are required to turn inventory into throughput. (Id, at pg. 61). The definitions of these three measurements are not standard definitions for an MBA student. It is an interesting perspective on how to view operations.

Alex with great success utilizes the theory of constraints to come across Bottlenecks in the manufacturing plant. Jonah explained to Alex that bottlenecks are any resources whose capacity is equal to or less then the demand placed upon it. Alex has to identify the bottlenecks in the system and try to eliminate them, which will allow the control of the flow of materials in the system. This will lead to the decrease inventories, decrease operational expenses, and increase the throughput of the whole plant.

The Goal, story circles around Alex Rojo, the manufacturing and production plant manager at UniCo and the challenges he faces to save his plant, which is on the brink of shutting down. He’s given 3 months’ time to turn around the dying manufacturing plant. Alex is torn between professional and personal life issues, and novel does excellent job depicting the protagonist’s struggle to save his plant and his marriage.

The next morning he meets up with Jonah in the hotel in New York. They begin to talk about the goal and the problems at the plant again. The next two figures that Jonah tells him about are statistical fluctuations and dependent events. He explains how these affect his plant the runs out of

The first way throughput can be increased is by making sure that the bottleneck’s time is not wasted. According to the text, this means that a bottleneck should never be sitting idle or working on defective parts. When a bottleneck is down for an hour, it is not only the cost of the bottleneck that is lost, but the cost of the entire system. This is because the bottleneck’s capacity is equal to the entire system’s capacity, and whatever a bottleneck produces in one hour is what the corporation produces in one hour. In addition, if a bottleneck works on defective parts or parts that are not needed, it is a waste of time that the bottleneck could be spending on good parts that are needed. Without good parts from a bottleneck, you can’t sell a product or generate throughput.

One more time, Jonah explained Alex another concept. Jonah explained, “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”. Alex with the help of his team could identify the bottleneck in the plant and organized the

I must also identify how I can “abolish local efficiencies” for a bottlenecked resource and which vital changes would introduce significant capacity enhancements at the bottlenecks. Book suggests using “simple actions such as ensuring that a capacity-constrained work center will not stay idle during lunch-break or shift changes, and offloading work to less efficient work centers that have ample excess capacity (p. 359).” I can build upon this suggestion and introduce off-shore IT team working “ten-hour shift schedule” to offset the costs and still providing around the clock 24*7 crucial IT support for the global digital supply chain. Also, this continuous production improvement process requires on-going attention and remediation strategy implementation and attentive manager to evaluate if remediation strategy has worked and/or if it requires any changes. Because systems’ bottleneck can “move,” if we increased the capacity at existing bottleneck, then other “bottlenecks” can be found at different place in the same department or in other departments, creating entirely “new” bottleneck. The main goal of management should be to utilize ongoing improvement policy to stay on track with the company’s long-term money-making

Utilizing the Goldratt Constraint Theory, there are many constraints that can be identified but we will discuss those with the greatest impact on the production process. There is a significant issue with bottlenecking in the

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Say we have identified the bottleneck machine of a production process. List at least four things suggested in the book that will result in a greater throughput without actually expanding the physical capacity of the machine.

The Goal, by Eliyahu M. Goldratt, demonstrates the theory of constraints through an elaborate story of a fictional manufacturing plant. We learn throughout the story what the goal of a business is and he suggests a number of methods that could be applied in both in the manufacturing and service worlds.

The Theory of Constraints (TOC) developed by Goldratt and Cox (1986) is a production-flow management system. In every system there is one process, known as the constraint, which has the least capacity (or slowest production rate). Output for the entire system is determined by the production rate of this constraint, or bottleneck. Theory of Constraints is a pull system much like Toyota's manufacturing system. However, TOC is based on identifying and optimizing the bottleneck. Because the system cannot produce faster than the bottleneck production rate, the constraint should be fully utilized. A disadvantage to TOC is that it results in higher constraint utilization and greater throughput levels.

The synopsis of “The Goal” per Goldratt, E. & Cox, J. (2014). is about the principle of manufacturing and a process of ongoing improvement. This novel was about understanding manufacturing, how and why it works and how understanding manufacturing, and applying the correct principles can bring order to chaos. This novel highlighted a plant Manager, Alex Rojo and his determination to save his Bearington Manufacturing Plant, which was facing some challenges in meeting customer needs and improving productivity and performance. With added frustration, Mr. Peach the plant president gave Alex three months to show improvements otherwise the plant will be shut down.