Custom «Book Review of The Goal» Essay Paper

The book by E. Goldratt and J. Cox – The Goal: A Process of Ongoing Improvement –discusses about how to improve the management of a production plant. The author traces the art of cost accounting from the perspective of money-making. Goldratt and Cox provide a new angle of view to the world. They analyze the status quo to understand the outcome of things and why they happen as they do. The authors use Alex Rogo and Jonah as the main characters to present lessons about management of production plants. Indeed, the experiences of Mr. Rogo on his production plant are immense to Jonah and his colleagues. Alex and his friends equally learn from Johan’s escapades.

Alex and his group learned crucial lessons each time that Alex Rogo and Jonah spoke. Mr. Rogo and Jonah met at an airport when the first one was heading for a business trip. Jonah surprised Rogo by recounting on how well his production plant was performing. However, he had no knowledge of where Alex was working. Their adventure and later meetings gave Alex powerful insights on production plants. Some of the valuable lessons him and his friends learnt from Jonah are:

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Companies Have One Focus

The Three Company Management Terms

Concept of Balanced Plant

Bottlenecks and Non-Bottlenecks

Working Non-Bottlenecks to Maximum Capacity on Bottleneck Is Inefficient

Precision is Imperative in Management

Keys to Management and Skills of a Manager

Companies Have One Focus

Jonah tells Alex that all companies have one goal, which they strive to achieve. He stresses, every activity in a plant that leads to the achievement of the goal is beneficial, and the others are needless. This makes Alex learn of the need to draw focus in his plant. He sets goals for all employees to achieve. Alex deliberates on Jonah’s remarks and unravels that the goal he meant was money. He learns after all that all companies are after making money. He draws to the conclusion – all the activities of the plant should be designed to deliver money for the company. Those which cannot are less valuable. He puts his act together with one the company accountants and outlines programs to help the realization of the goal. He realizes that the principal operation should be to increase the net profits and get value for money in investments. He visualizes a future with the company and readies himself to turn the plant’s fortunes around (Goldratt and Cox 26).

The Three Company Management of Terms

Alex also gets knowledge from Jonah that there are three different terms can ease the management of his plant. These outlined to him are throughput, inventory and operational expense. He learns that the plant can be classified under three broad terms. The throughput entails the rate at which the plant is able to create cash from trade. The inventory involves the plant’s investment on buying things for trade while operation term denotes all the cash the system employs in order to turn inventory into throughput. He takes this lesson from Johan to a session with his staff where they discuss it to deeper detail. They derive that throughput is incoming cash.  Inventory is the cash within the system, and operational expense is the money they pay out to make throughput happen.  However, Bob, who is in charge of the production department, raises skepticism on how easily such a complex plant can be analyzed in only three terms. Lou – in charge of accounting – clarifies that tooling like machines, the building and the whole plant are examples of inventory. Moreover, he discovers the whole plant is an investment that can be sold. Stacey, in charge of inventory control, further reveals that investment is the same thing as inventory. From Jonah, Alex and his friends learn a triangle of terms on how the plant can be viewed. It is a paramount lesson for Alex and his group. This session with his staff provides clarity to these three concepts unknown to them. They learn that something radical needs to be done with the plant machines (Goldratt and Cox 57).

Concept of Balanced Plant

In another discussion with Jonah, in New York, Alex acquires information about the concept of balanced plant. After Alex explains to Jonah on the problems his company is facing, the latter is positive on the possibility of remedying them within three months. Nevertheless, Jonah dismisses the use of robots in the plant. He suggests, the plant where everyone works all the time is wasteful. Instead, the mentor introduces to learner the concept of a balanced plant. Alex finds out that kind of plant is one with the ability of each and every resource to stabilize exactly with demand from the market. When Alex is thinking of buying the idea of balanced plant, Jonah queries it. He raises concerns over the sustainability of such a concept. Alex then studies that a balanced plant may spell bankruptcy for the company. Jonah leaves Alex with another experience in the form of a riddle about dependent events and statistical fluctuations. Jonah explains that both of them seem harmless and ought to work hard on the production line. Alex then discovers the significance of dependent events in relation to statistical fluctuations. He notes that the restrictions are normal when considering fluctuations with dependent events. Alex finalizes that a balanced plant may not be the answer to his case; another of the cardinal pieces of experience from Jonah. From Jonah’s lessons in New York, Alex studies that he needs to devote himself to the plant more. He realizes the extra workload in the plant. It even becomes difficult for him to juggle his marriage duties and plant roles (Goldratt and Cox 77). 

Bottlenecks and Non-Bottlenecks

Jonah also introduces to Alex the notion of bottlenecks and non-bottlenecks. Alex studies from his experienced friend that a bottleneck is when the routine or ability of a system is a restricted by a single or a limited number of components. It entails resources whose capability equates or is lesser than the mandate required of it. He also notes that non-bottlenecks are reserves, which have more ability than required of them. Jonah explains to Alex that his target should not be trying to balance ability with mandate, but instead balance the movement of product through the plant. Alex takes this lesson aboard together with his team. He outlines the situations where capacity does not equal demand. He realizes as well that production is a process, and it cannot be altered easily. It involves a systematic series of actions dependent of many processes. He discovers that he would need more machines and capital – a situation the division could refuse. In his visit to the plant, Jonah explains to Alex that plants have bottlenecks; otherwise, they could be enjoying excess capacity. Alex draws back because he had adopted the idea of raising capacity by increasing machines that can minimize on bottlenecks. Still Jonah explains that machines in operation could increase capacity already but lack the ability to think. He details the need to ensure that machines are working on quality products only to reduce time wastage. They should also discharge the workload by farming and employ vendors to do the work. Jonah deliberates on the cost of bottlenecks and Alex learns on the losses of the plant. He finds an urgent need to re-organize the bottlenecks. His friends learn the importance of keeping the bottlenecks busy. The staff develops a priority system that increases the efficiency of the plant (Goldratt and Cox 137).

Working Non-Bottlenecks to Maximum Capacity on Bottleneck Is Inefficient

Inventory diminishes when the staff develops a new priority system for portions going through the bottlenecks.  Though it is an appropriate progression, investigation on the lower inventory reveals more bottlenecks. Jonah visits the plant again. He queries Alex whether there are additional bottlenecks.  Jonah discovers that as a result of old thinking in working non-bottlenecks to maximum capacity on their parts, it has caused a problem. Every section is in order ahead of the bottlenecks, and others are waiting for non-bottleneck portions for the ultimate assembly. There is a need to strike a balance.   Ralf, one of the employees, notes that he can rectify the menace and come up with a new schedule to ease any surplus inventory ahead of the bottlenecks. They learn this valuable lesson in Jonah’s second visit to the plant (Goldratt and Cox 157).

Precision Is Imperative

Alex’s elevation to division manager makes him call Jonah to help him manage the division. However, Jonah declines since Alex is not precise on what he wants him to do. He turns his request down until he drafts questions for him. Alex learns from Jonah that one needs to be precise in management.

Management Keys

After deliberation of Johan’s discussions, Alex comes up with some queries: what can be transformed? What to transform to? How to implement the transformation? Responding these inquiries are the rudiments to management. The expertise needed to respond to them is the keys to a good manager. These are the crucial lessons that Alex learns from Jonah. They are the principles that promote him from a plant on the decline to a division manager three plants on renaissance (Goldratt and Cox 259).

Discussions and Conclusion

Alex learnt crucial lessons on how to revive a production plant every time Jonah spoke to him. He took over the lessons and discussed them with his staff. They understood, discussed and implemented those. Alex was able to revive the fortunes of the plant. This step did elevate him to a division manager.  His staff also developed a model of analyzing the challenges of the division.  The employees created a mechanism of revitalizing the division through in-depth examination of the production system and constraints. Jonah was indispensable to Alex and imparted him with crucial management skills. The lessons Alex learns from Johan are secrets to administration and form the prime characteristics of an ultimate manager.

In conclusion, every professional should make a point to read this novel. The book suits a wide range of professionals especially auditors, production managers and chief executives. Goldratt and Cox have provided an in-depth analysis of the fundamentals that are supposed to form a part of every administration prospectus. This novel has been and remains a towering advantage in the industry of making progression toward the continuous improvement.