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 Great framework for improving anything October 3, 2008
Though geared to an industrial environment, this book teaches how to think when in need to improve processes. Makes great introductory reading for business process management professionals.
Extremely useful manufacturing throughput concepts September 25, 2008
Goldratt's examination of throughput and cultural belief issues in a manufacturing environment are highly informative for anyone involved with a product slated for manufacturing. He illustrates his concepts with adeptly conceived metaphors and parables which makes grasping them much easier. In fact I would even go so far as to recommend this book to those involved in service industries, where his concepts of throughput and bottlenecks may be applied with great utility.
Additionally, on the financial side Goldratt presents models for cost of inventory which I found illuminating, although I am more concerned with the throughput side of the operation.
An excellent easy read I recommend to almost anyone in business.
 Julie Rogo Knocks It Down One Star September 17, 2008
Per my graduate class in quality engineering:
"Read The Goal and provide an executive summary of the book. The summary should cover the main points of the process that Mr. Rogo and his team took to turn around the plant. In addition to the summary, answer the following questions."
Part I -- Executive Summary
The problem of production has challenged human beings since they first evolved. Even hunters and gatherers had to do elementary planning to evaluate local resources and ration their prizes to assure they met the basic needs of the tribe. Moreover, gathering these basic commodities from nature -- wild game, fruits, nuts, roots, stems, berries, and so forth -- constituted only the first step of the tribal production process. A primitive division of labor within the tribe created the equivalent of an assembly line on the micro scale with hunters, gatherers, preparers, tribal elders, caretakers, medicinal specialists, etc.
Over the millennia, this division of labor continued to specialize and to multiply the range of possible productive occupations. This trend exploded with the advent of new individual freedoms after the American Revolution. The resulting Industrial Revolution greatly swelled the diversity, complexity, and specialization of knowledge needed in the rapidly modernizing society. It resulted in the modern fields of engineering and especially industrial engineering, the study of systems that keep industries humming.
Because of their long history of storytelling, humans still show a strong preference for learning through dramatic interpretation. Young people learn moral lessons like the just rewards of industry through stories such as "The Little Red Hen." Such fictional tales of virtue tend not to make their way so much to older generations. A few exceptions exist in novels such as Atlas Shrugged by Ayn Rand, a story which illustrates the role of the mind in man's life. A more recent exception comes in The Goal by Eliyahu Goldratt, a story which illustrates his "Theory of Constraints" dramatically.
Goldratt, a consultant by profession, considers himself a philosopher in his own right. His frustrations in the early 1980s in attempting to convey his new theory of production to his clients led him to write The Goal with the help of professional writer Jeff Cox. Goldratt seeks to show, in the form of a novel, how commonly held yet faulty assumptions about ideal production plant behavior, such as using all processing resources to capacity, neglect integrated thinking at a systems level and lead to net profits far short of potential. To borrow the words of Ayn Rand, Goldratt tells the reader, in effect: "Check your premises." By the end of the tale, protagonists and readers alike have profitably done just that.
Goldratt cleverly tells the story from a first person point of view of its main protagonist, Alex Rogo. The novel opens with Alex struggling to keep his manufacturing plant afloat. As the plant manager, Alex has done his best to apply his degree as an industrial engineer to solve mounting production problems at his plant. But he has had to face the hard truth that his best simply will not do. The plant has fallen into a perpetual "fire fighter" mode in which jobs get "expedited" based on whichever higher manager screams the most loudly on that particular day. Preposterously long work shifts resulting from this modus operandi have placed stresses on his marriage to his wife, Julie, as well as his relationship with their two young children.
Alex encounters Jonah, an old friend and science teacher who challenges Alex on a number of his basic assumptions with a Socratic method of inquiry. "Then, tell me, what is the goal of your manufacturing organization?" he asks Alex after a brief series of opening questions. Although seemingly innocuous, the answer to the question of "the goal" actually opens a floodgate of other questions. These in turn cascade into answers that help Alex and his team of managers to transform the plant from the biggest loser in the company to the most profitable one.
For any plant, of course, "the goal" proves actually quite simple -- to make money. But Alex takes pages and pages of thought and dialogue in the early part of the novel to answer this question, first refuting other common answers such as "to produce products as efficiently as we can" and other misleading slogans before arriving at the final answer to his own satisfaction. His ensuing exchanges with Jonah over the remainder of the novel, combined with many other plot elements, help Alex to work backwards from this goal to the intermediate tasks the plant performs to achieve it. This leads to open challenges and confrontations with management up and down the chain of command in the company as Alex and his new converts strive to drive dogma from the corporate culture and replace it with a well-reasoned production philosophy -- the "Theory of Constraints."
The "Theory of Constraints" itself seems obvious by the end of the novel. It simply shows, for example, that the throughput of a plant will remain constrained by the narrowest "bottleneck" in the production line, with that line including the market demand itself. Hence, attempts to use other resources up and down the line from that bottleneck to full capacity result in backlogs before the bottleneck and idleness after it. Other problems, such as excess inventory and untimely retooling, also result from the "full capacity" fallacy. Moreover, as a plant reorganizes its resources to make the plant more effective, thus increasing its overall capacity, it can experience the phenomenon of moving bottlenecks. Alex Rogo and his team of experts deal with just this occurrence as their plant improves and they later document this as a key component of their process improvement strategy. (See Part II Question 1 for the step by step strategy.)
Goldratt keeps the story interesting with side plots to illustrate his theory, such as a Boy Scout hike that stretches or shrinks depending upon the sequence and ability of the hiking troops. He also shows that "constraints" apply beyond manufacturing plants to human relations as Alex struggles to hold his family together under the "constraints" of 16 hour work shifts. By the end of the novel, Goldratt resolves the conflicts among the characters satisfactorily and shows the happy reality of practicing his "Theory of Constraints."
Readers who liked Atlas Shrugged will enjoy The Goal. While much narrower in scope, it nevertheless remains a novel that challenges many widely held assumptions. As did Ayn Rand, Eliyahu Goldratt demonstrates himself a profound thinker who dares all of us to think more profoundly.
Part II -- Questions and Answers
1. Review the step-by-step approach implementing the Theory of Constraints (TOC) approach. In your opinion, which is the hardest step and why?
Per Chapter 37:
1. IDENTIFY the system's constraint(s).
2. Decide how to EXPLOIT the system's constraint(s).
3. SUBORDINATE everything else to the above decision.
4. ELEVATE the system's constraint(s).
5. WARNING!!!! If in the previous steps a constraint has been broken, go back to step 1, but do not allow INERTIA to cause a system's constraint.
In my experience, the overcoming of inertia mentioned in Step 5 represents the greatest challenge to implementing TOC. Comfort embodies the core of inertia. With management content with how a process currently operates, overcoming that inertia can prove almost impossible.
2. The first edition of this book hit print in 1984. Are the lessons still relevant? Explain.
The lessons of this book remain as relevant today as they did in 1984. Although the industrial culture has learned much since then, the principles remain timeless and warrant consistent and unyielding repetition. Only repetition of a principle assures its continued practice.
3. What is your biggest takeaway from this book and why?
First, my personal takeaway: Julie Rogo behaves like a psychotic drama queen from hell, and her parents, lying sacks of garbage. I fantasize a novel called Alex Shrugged in which immature Julie leaves her hard-working, productive husband under cover of her conniving, coddling parents only to return to the house to find the locks changed, the house sold, and her husband, children, and assets vanished without a trace. She would have gotten her just deserts.
Now, my professional takeaway: The largest lesson I took from this book involves the importance of setting forth principles dramatically. The compelling and engaging story complete with plot, theme, character, and style help to illustrate otherwise dry principles. One can say much the same for Ayn Rand's great novel Atlas Shrugged which illustrated the role of the mind in man's life.
4. The author claims that the TOC is hard for management to accept because the result runs contrary to common practice (i.e., 100% utilization may not be good). Which of these results, or measurements, or practices is the hardest to accept for management (in your opinion)? Explain.
I agree with the author that a result such as using a resource at less than full capacity remains the hardest pill for management to swallow. Management mythology suggests the old nineteenth century whip cracking slave driver who gets maximum effort from his minions and punishes those who "slack." Reality shows that slack remains a vital and indispensable part of any good management system.
5. There is an old saying that "if you measure it, they will do it." How does this phrase relate to the TOC approach?
Every measurement implies an acceptable range of performance. When the plant measured efficiencies of individual components in the system rather than the overall performance of the system, the metrics misled management to focus on "improving" those efficiencies at the expense of overall plant performance. Once the focus changed to the right metrics, plant performance improved dramatically.
6. As the demand on the system increased, problems arose in the plant -- first diagnosed as moving bottlenecks. As the demand on any system reaches capacity, what are the keys to implementing TOC?
Per the answer to Question 1, management must follow the process of constraint identification regularly.
7. Would you have accepted the French order for $701 per part (Model 12)? Is the answer the book takes always the correct answer? Explain.
Per Chapter 38:
"We calculate the load that this large deal will place on the bottlenecks -- no problem. We check the impact on each of the seven problematic work centers -- two might reach the dangerous zone, but we can manage. Then we calculate the financial impact -- impressive. Very impressive. At last we're ready."
Yes, I would have accepted the order. Yes, the book offers the right answer under the conditions given. The Goal of the plant is to make money. This decision served that goal.
8. Are there any flaws in this philosophy? State your perceived flaws, if any, and defend your answer.
The philosophy assumes that management can identify and control all constraints. This does not always hold true, especially in an age of intrusive government regulations with origins in political ambitions. The novel could have at least mentioned this externality as a "constraint" to the effectiveness of the Theory of Constraints.
Outstanding read September 2, 2008
Great book! I couldn't put it down. Very interesting how the author used a novel to present a breakthrough business theory.
Manufacturing world at a glance July 14, 2008
I have just started to read this book, and from the very beginning it feels like you are inside the normal reality of manufacturing.
It is easy to write books about theories, but giving a real feeling of daily manufacturing issues is something new.
I expect a lot form reading the whole, since page by page you discover more as the guy who's involved in story.
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