The Goal - a Process of Ongoing Improvement by Goldratt - Book Report/Review Example

Running Head: The Goal: a process of ongoing improvement The Goal: A Process of Ongoing Improvement by Eliyahu M. Goldratt Customer’s Name Customer’s Course: Tutor’s Name: July 24th, 2012 ‘The goal: A Process of Ongoing Improvement’ by Eliyahu M. Goldratt is the first book I have ever read that made me realize it is possible to turn around a loss making company to a profit making company within three months. This book also made me realize that being a Manager in a company is not easy as one is faced with numerous challenges not only in the work place, but also in one’s personal life. In my own observation, Goldratt did an excellent job in examining how a company can improve production and also cut down on additional expenses. This book goes over and above this main theme and discusses the impact that a time consuming job can have on one’s personal life. In my own opinion, Goldratt illustrates how a good Chief Executive Officer should react in order to save a company that is on the verge of collapsing. This story is based on the life of Alex Rogo, the Plant Manager of Uniware; a branch of Unico. In the beginning of the story, the plant is on the verge of collapsing and this is evidenced by the numerous complaints that Alex’s boss, Bill Peach, receives from displeased clients. After reading the book up to this point, I clearly understood the point that Goldratt is trying to drive home: if a company offers substandard goods or services to its customers, there will always be complains. I concur with Goldratt that this is one symptom of a corporation on the verge of collapsing. If I was Bill Peach, I would have reacted in the same way that he did: issuing an ultimatum to Alex to turn around Uniware into a profit making plant within three months, or else lose his job as manager. What Alex does next, in my own opinion, was very ingenious. After realizing that his job is in jeopardy and time is limited, he decides to seek the help of Jonah, a physicist and a close friend of his. In my own opinion, Alex shows high level creativity by seeking Jonah’s help and advice since the three month ultimatum meant that there was not enough time available to seek external solutions such as business consultants and surveys. Sure enough, his gamble paid off as Jonah was able to give him a road map of how to turn around the company. In my point of view, Goldratt is trying to show us that necessity is the mother of all inventions. This is because Alex had been the Plant manager at Uniware for a significant time now but he had never taken measures before to turn the company around until he was issued with the ultimatum to do so. Just as Hrebiniak Lawrence mentions in his book entitled ‘Making Strategy Work: Leading Effective Execution and Change’, the issuance of ultimatums is an effective technique of triggering creativity and innovation from both employees as well as managers. The discussion between Alex and Jonah on the Plants processes was a real eye opener to me. In the discussion, they define terms such as throughput, inventory and operational expenses which are used to measure a company’s production success. According to Jonah, throughput is the measure of a product’s worth when sold at market value after all the operational costs and inventories have been deducted. Jonah sheds more light on this by defining inventory as the costs incurred in purchasing the existing stock and operational costs as the expenses incurred in converting inventory into throughput. I also learnt a lot from a number of explanations that Jonah offers to Alex. The good example of an eye opening explanation is the one about balancing a production line. Jonah explains that a company which is constantly productive is considered ineffective because continuous production results in rampant employee absenteeism, low quality as well as poor employee turnover (Goldratt, 2004). In order to find the ideal production quantity, Jonah explains that a plant should cut down operational costs as well as inventory so as to boost throughput (Goldratt, 2004). This book also enabled me to get a good understanding of bottlenecks. In my own opinion, Alex demonstrates creativity again by inventing a game for a few children during a hiking expedition to illustrate the concept an ideal balance line of production. Alex does this by creating dependents and employing dies to measure statistical fluctuations. After the children had finished playing this game, I was able to conclude that the bottleneck’s rate of production is the determinant of other dependents. Indeed, statistical fluctuation is what causes slow movement of stock and this usually results to huge bottlenecks over time. It was as a result of this understanding that Alex began to search for solutions to the bottleneck problem in the company. Alex successfully identified the NCX-10 robot in the firm as well as the heat treatment area as the major sources of bottleneck (Goldratt, 2004). In my own opinion Alex demonstrated his problem solving capability by putting two employees in charge of the robot as well as employing multiple measures to solve the problem of the heat treatment area. These multiple measures included hiring external vendors to help in heat treatment, producing lesser batches so as to maximize productivity as well as combining production batches that needed similar temperature levels. At the end of the whole improvement process, Alex was able to save Uniware and was promoted to the position previously occupied by Bill Perch. In my own estimation, Goldratt offers sound advice and great tips to managers who are in Plants that are on the verge of collapsing. Apart from the main theme of saving a firm that is on the verge of collapsing, the author also points out the impact that a time consuming job can have on one’s personal life. This is demonstrated by the fact that Alex was having problems with his wife during the period when he dedicated his time in saving the firm. However he was also able save their marriage by solving the problems between him and his wife. I personally believe that Goldratt was trying to communicate that it is important to establish a balance between work and personal life. In my own estimation, the book was interesting and easy to understand because it was written in novel form. References Goldratt, E.M. (2004).The Goal, A Process of Ongoing Improvement. Palmetto: North River Press Hrebiniak, L. (2005). Making Strategy Work: Leading Effective Execution and Change. 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