Book Report of “The Goal”

The Book “The Goal”

The Goal: A Process of Ongoing Improvement was written in 1984 by Eliyahu M. Goldratt. This book is based on the Theory of Constraints which the industrial engineering practices (Goldratt & Cox, 2004). The main character Alex Rogo is the plant manager of UniCo, a plant located in the Bearington. Right from the beginning of the book, the reader is acquainted with the problems that Alex faces while running the plant and the journey he makes to improve the plant’s performance. After reading the book, one can see that the plant operates on expediting. The process of having goods shipped on time does not have to have a steady process. The process of shipping orders is based on the orders with the most visibility. Despite Alex having an industrial engineering background, the plant does not seem to be efficient enough despite his efforts to improve the plant’s operations. At some point, Alex is given an ultimatum by Bill Peach, the regional manager for UniCo. The ultimatum is that Alex has to improve the performance of the plant or it will be shut down.

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Before the ultimatum, Alex met Jonah, an old professor of his. The ultimatum given to Alex by Bill made the former reflect on the discussion he had with Jonah. In the discussion, Alex had told him about his plans to improve the performance of his branch of UniCo (Goldratt & Cox, 2004). Jonah heard the plans but questioned their effectiveness to improve the performance. Thus, Alex hoped that Jonah would assist him in improving the performance of the plant because the ultimatum to shut it down was real and his plans were very effective, according to Jonah. Therefore, Alex decided to find Jonah so that they could have a deep discussion on the issues, facing the plant. Jonah used to teach Alex the Socratic Method that implied asking him a question but not correcting him when he gave a wrong answer (Goldratt & Cox, 2004). The method‘s main aim is to make Alex develop his own solutions. This is the kind of questions that begin with ‘what is the’. After reading the book, one can learn that solutions to most problems that people undergo in their current situation might be already within them and they only need someone’s assistance to realize that.


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The book illustrates how the mechanisms of ‘factory physics’ are useful in the manufacturing operations and logistics management. In the book, there is a clear definition of the key elements and the variables that are supposed to be considered when talking about ‘factory physics’. Dependent events are the processes that must occur before another process. For example, in the car manufacturing industry, the chassis of the car has to be in place before the engine is mounted on the car or the steering column has to be completed before the steering wheel is fixed in its position.

Statistical fluctuation is whereby a person is not capable of predicting the future in terms of events and qualities. In the book, there is a good illustration of this element in form of an example. During one of Alex and Jonah’s meeting in a restaurant, they cannot determine the capacity of the restaurant by literally counting the number of seats (Goldratt & Cox, 2004). Another event that they cannot precisely predict is the time the waiter will spend on completing their order. The uncertainty in correctly predicting the future event is what they refer to as statistical fluctuations.

The three main variables that are talked about in the book are throughput, inventory, and operation expense. Throughput is the measure of the rate, at which the plant generates money through the sales of the products manufactured by the plant, while inventory is the amount of money invested in the plant on purchasing the goods that are intended to be sold later. Operation expense can be defined as the total amount of money that the plant uses in order to turn the inventory into throughput. When looking at the discussions between Alex and Jonah, one can say that the book has a number of recommendations to manufacturing plants if they are interested in making profits. By using the elements and the variables discussed above, a plant can make profits by relying on forecasting and efficiencies.

From the book, it is recommended that the plant under Alex’s management should strategize on how they could reduce their cost of production and maintain a maximum efficiency of the processes they run. However, this recommendation is on the micro level of any manufacturing plant because it focuses on a specific area in the firm and not the entire plant. An example on how the firm can maximize its profit is by having and maintaining the work rate of workers and machines at 100% (Goldratt & Cox, 2004). If this is realized, the firm has the best out of its investment in the labor force sector. Nevertheless, in the real sense, 100% work rate efficiency cannot be realized in the real world so many companies have put the acceptable range of 85%-95%.

The book recommends to the firm to have a major analysis of the plant in terms of bottleneck and non-bottleneck stations. The main aim of the plant is to make profit; therefore, the management should make the effort to minimize the bottleneck stations that might become liabilities if not reduced (Goldratt & Cox, 2004). According to the book, optimal operations refer to the maximum output of the plant in terms of production (Goldratt & Cox, 2004). This is achieved by reducing the inventory and maximizing on the input to increase the throughput of the plant, while a balanced operation has the input and the output of the plant in a good proportion. The management makes sure the bottleneck station is reduced and that the production capacity meets the market demand.

Theory of constraints can be stated as a methodology, used in the identification of the important limiting factors that hinder the achievement of a goal. After the identification, there is a systematic improvement of the limiting factors until they are no longer there. After reading the book, one can define constraints as the bottleneck to the manufacturing process. This theory is explained by Jonah who uses the example of hiking. Jonah thought that while being the team leader (manager), he could allow all the processes (operations) to take place simultaneously and reach the destination (throughput) in the shortest time possible (Goldratt & Cox, 2004), assuming that the leader has no knowledge of the physical capabilities of all team members. After starting their hiking journey, the team leader could easily identify the bottleneck among team members by spotting the slowest one who is also the last member of the group. In the manufacturing sector, the manager will be able to identify the workers or the machines that have a low-efficiency rate. By allowing the bottleneck to be the second last person in the hiking group, the space between the bottleneck and the last person will continuously decrease, and the distance between the bottleneck and the person ahead will increase with time.

There is a need to synchronize the group to have them maintaining the same pace (Goldratt & Cox, 2004). This can be achieved by taking the bottleneck in front of the group to make the group (operation) move at the same pace because if the bottleneck is left behind, the distance between them and other group members will continue to increase. After the leader does this, it will become evident that the group will not be scattered over a large area and the speed of the last person will be slightly improved (throughput). Thus, theory of constraints gives an important concept to learn. There is a great need to increase throughput, but also another concept is the synchronization of the group because the group has to move as a whole, but achieving this synchronization is a key thing. As one bottleneck is moved from behind to the front of the group, another bottleneck will be realized behind, and the synchronization process has to be done to the new bottleneck (Goldratt & Cox, 2004). This is done over and over until no bottleneck is seen in the group.

UniCo plant, which is located in Bearington, is in trouble because of the first impression that is brought into the story by the branch manager of the plant, Bill. He informed Alex, the manager of this plant, that it has not been making profits in the previous months and that it is going to be closed within the next three months if no improvements were to be seen.

Alex thought that the use of robots at his plant was good as he tried to convince Jonah when he had been asked if the use of robots was a success. When Alex had a chance meeting with Jonah at the airport, they discussed robots in detail. Thus, Alex thought why using robots was a success because they were used in a couple of other departments, and he thought they had a 36% improvement in a single department.

After realizing that the Bearington plant was in trouble, Alex had to find solutions to the problem, and according to Jonah, the normal way of managing and solving the problems faced by the Bearington plant was to use the Socratic Method. This method presupposes asking questions and getting the answers or the solutions to the problems. Moreover, the people, giving the answers, should be convinced themselves about solutions (Goldratt & Cox, 2004). They should not just be given the answers. Another normal way is by thinking and using common sense even though it might not be very common. This approach could even contradict the common practices of the organization.

Using robots in production was not such a good idea, according to Jonah. During the chance meeting between Jonah and Alex at the airport, they had a lengthy discussion about robots. Alex stated that in his plant, they used robots in a number of departments and he thought the machine had a production improvement of 36% (Goldratt & Cox, 2004). However, Jonah immediately suspected that robots had made the plant’s inventories very high, while the delivery of orders was delayed. When Alex was asked about the productivity of the plant, he gave the wrong answers. Another suspicion that Jonah had was that Alex did not know the main goal of the plant, and thus, he asked him about the productivity of the plant.

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Jonah suggested to Alex an effective way of knowing if the plant achieved its primary goal, which was to make profits. Thus, he suggested three main parts of the plant that should be put into consideration when evaluating the performance of the plant. One of the areas was throughput, or the measure, at which the plant makes money through its sales, and it should be high. Another area was the inventory or the things that had been purchased by the system and that were intended to be sold should be low or reduced. The last part was the operational expenses, or the money spent on the system to turn the investments into profit. It should very small.

When the system capacity is reduced to the market demand level, it means that the goods manufactured by the plant have an equal demand capacity from the market. Therefore, there will be no idle capacity, and their cost of production will be at the minimum amount (Goldratt & Cox, 2004). This is achieved by having minimum occasions where the market demand for goods is higher than amount of goods, supplied to the market.

Alex participated in the hike with Herbie and the Boy Scouts with the intention of learning a thing or two about plant management. He learned that the plant might have all members working continuously and there was no one idling. However, the goal of the plant, which was to make a maximum profit, was not achieved because the overall improvement of the plant’s profit was fully dependent on the effort put by each member of the plant. Thus, if one or two members did not work at their fullest capacity, they are pulled the entire group down.

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The experiment with the die and matches indicated that fluctuations in the speed of operation would cause inventory to rise, thus reducing throughput. By repeating the process of rolling the die, the last player will have no matches to produce at the end of the 20th round (Goldratt & Cox, 2004). The attempt to prove the late order was identical to the factory floor because both explained why every member of the team had an important role in the production process. Bottleneck is a resource that has a supply capacity as equal or less than the demand it is required to match, while non-bottleneck is a resource that covers its demand by having a greater supply. The time value given on bottleneck according to the book is 30 minutes.

Alex and his staff had gained the knowledge about bottlenecks at the plant and they developed a plan to manage them. They made a list of the orders that were usually late and noted down the components of the orders that passed through the bottleneck machines. Then, a schedule was created that listed the due date of the orders, while strict instructions were given to the bottleneck operators that jobs should only be done in that order.

The major cause for bottleneck spread was the fact that late order components were not regularly in front of the bottleneck machines waiting to be acted upon. Therefore, there was a need to introduce the red and green tags in order to make sure that the late orders were given the first priority by the bottleneck machines. This meant that at some point, the non-bottleneck station was to be put in idle state in order to move the late order in front of the line. Therefore, there is no concern in increasing the idling time of the non-bottleneck station as long as the production is constantly high.

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Cutting batch sizes was done to increase the revenue by 15% (Goldratt & Cox, 2004). The size of the batch for non-bottleneck parts had to be cut by half. This resulted in WIP to be reduced by half and the time spent was significantly reduced. These changes led to improved responsiveness (6-8 weeks reduced to 3-4 weeks). The part cost does not matter as long as the increased setups occurs on the non-bottleneck operations

The aim of the plant is to realize profits by the end of the financial year. This was Alex’s task when he was asked by Jonah about the goal of the Bearington plant. It would not be easy in life to achieve the goal of the plant because the main solutions that had been given for the problems of the plant are theoretical and they come from trials that are not exactly related to the plant. Therefore, various considerations have to be put in place in order to realize the goal of the plant. One of such considerations is acquiring the service of an expert in identifying the bottleneck stations at the plant.

The book by Goldratt is a very educative reading when it comes to new managers and those who have already worked for long. The book offers valuable lessons and pieces of advice that Rogo’s old professor Jonah gives to his student. The book explains the consequences of having a plant that brings profit. One gets to know the how to evaluate the business and where exactly one should look at. The book also explains some of the most common setbacks in businesses that limit the plant from realizing its main goal, which is to make profits over time. The book uses an experiment to provide the solutions that could affect a plant and teaches how to identify them. Generally, The Goal is an interesting management book that has a good lessons managers and these lessons are delivered with many fictional characters, which makes it easy to information, presented by the book.


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