Summary: The Goal (2013)

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Universidad Universidad Internacional de Cataluña (UIC)
Grado Administración y Dirección de Empresas (ADE) English Programme - 3º curso
Asignatura Production
Año del apunte 2013
Páginas 2
Fecha de subida 08/06/2014
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Universitat Internacional de Catalunya Facultad de Ciencias Económicas Grado en Administración de Empresas Asignatura: Production 1 Prof.: August Casanovas Geraldine A. Leirós Martínez Summary: The Goal Alex Rogo (Production manager of UniCo Manufacturing) is given an ultimatum to turn the plant around in three months. Therefore he seeks the help of a past acquaintance named Jonah. Jonah is a physicist who will be vital to Alex’s success.
The name of the novel comes from the question the main character ends up asking himself: “What is the goal of any business?” He realizes that the goal of any business is to make money and that the actions in a plant can be divided into two groups. The first one involves the activities that make money and therefore are productive. The second one involves the activities that do not make money and as such are considered nonproductive.
After he contacts Jonah they both define 3 measures to define any successful plant: throughout, inventory and operational expense. Throughput is the rate at which the system generates money through sales. Inventory is all the money that the system has invested in purchasing things which it intends to sell. Operational expense is all the money the system spends in order to turn inventory into throughput.
The main character stumbles upon the idea that the bottleneck’s speed of production is what determines the speed of the other dependents. Knowing this, the Theory of Constraints is introduced in the book. This theory is based on the premise that the rate of goal achievement, using this method, is limited by at least one constraint. A constraint is the element factor that works as a bottleneck. If we consider, as the ideal case a total elimination of waste, the result would be an infinite throughput. Based on the previou,s a series of steps have to be followed in order to apply this theory and achieve the maximum throughput.
The steps are: 1. Identify the system’s constraints 2. Decide how to get the most out of the constraint.
3. Establish a vertical hierarchy system (subordination).
4. Make everything possible in order to elevate the system’s constraints (break the constraint).
5. If the last step was successfully achieved, go back to step 1.
Going deeper on this theory we can define three types of constraints: equipment, people and policy. This way the constraint is used as a focusing mechanism in order to manage a system. On other subject we can define the concept of Buffer. Buffers are used to avoid starving the constraint. They are also used to prevent any failure from blocking the constraint’s output. They are mainly a tool used to protect the constraint from variations in the rest of the system, and therefore they are a tool that at the end helps you to buy some time in the process.