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The Goal: A Process of Ongoing Improvement [Paperback]

Eliyahu M. Goldratt (Author), Jeff Cox (Author)
4.5 out of 5 stars  See all reviews (217 customer reviews) |
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Book Description

Publication Date: July 2004
Written in a fast-paced thriller style, The Goal is the gripping novel which is transforming management thinking throughout the Western world. The author has been described by Fortune as a 'guru to industry' and by Businessweek as a 'genius'. It is a book to recommend to your friends in industry - even to your bosses - but not to your competitors.

Alex Rogo is a harried plant manager working ever more desperately to try and improve performance. His factory is rapidly heading for disaster. So is his marriage. He has ninety days to save his plant - or it will be closed by corporate HQ, with hundreds of job losses. It takes a chance meeting with a colleague from student days - Jonah - to help him break out of conventional ways of thinking to see what needs to be done.

The story of Alex's fight to save his plant is more than compulsive reading. It contains a serious message for all managers in industry and explains the ideas which underline the Theory of Constraints (TOC) developed by Eli Goldratt. Eliyahu M. Goldratt is an internationally recognized leader in the development of new business management concepts and systems, and acts as an educator to many of the world's corporations. The 20th anniversary edition includes a series of detailed case study interviews by David Whitford, Editor at Large, Fortune Small Business, which explore how organizations around the world have been transformed by Eli Goldratt's ideas.

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Editorial Reviews

Review

"A survey of the reading habits of managers found that though they buy books by the likes of Tom Peters for display purposes, the one management book they have actually read from cover to cover is The Goal." -- The Economist

"Anybody who considers himself a manager should rush out, buy and devour this book immediately. If you are the only one in your place to have read it, your progress along the path to the top may suddenly accelerate...one of the most outstanding business books I have ever encountered." -- Punch Magazine

"Like Mrs. Fields and her cookies, The Goal was too tasty to remain obscure. Companies began buying big batches and management schools included it in their curriculums." -- Fortune Magazine

"This theory provided a persuasive solution for factories struggling with production delays and low revenues." -- Harvard Business Review --This text refers to an out of print or unavailable edition of this title.

About the Author

ELIYAHU M. GOLDRATT is an Israeli physicist, inventor, and philosopher whose unconventional approach to business management has made him one of the most sought-after consultants in the world today. Through his lectures and writings, as well as his work with such corporations as General Motors, Ford, Proctor & Gamble, and AT&T, Dr. Goldratt continues his crusade to teach businesses to re-examine their basic assumptions in order to compete effectively in the new global market place. --This text refers to the Audio CD edition.
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Product Details

  • Paperback: 384 pages
  • Publisher: North River Pr; 3rd Revised edition (July 2004)
  • Language: English
  • ISBN-10: 0884271781
  • ISBN-13: 978-0884271789
  • Product Dimensions: 9 x 6.1 x 1.1 inches
  • Shipping Weight: 1.2 pounds (View shipping rates and policies)
  • Average Customer Review: 4.5 out of 5 stars  See all reviews (217 customer reviews)
  • Amazon Best Sellers Rank: #457 in Books (See Top 100 in Books)

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› Visit Amazon's Eliyahu M. Goldratt Page
Eliyahu M. Goldratt
Eli Goldratt is an educator, author, scientist, philosopher, and business leader. But he is, first and foremost, a thinker who provokes others to think. Often characterized as unconventional, stimulating, and "a slayer of sacred cows," Dr. Goldratt exhorts his audience to examine and reassess their business practices with a fresh, new vision.

He obtained his Bachelor of Science degree from Tel Aviv University and his Masters of Science, and Doctorate of Philosophy from Bar-Ilan University. In addition to his pioneering work in Business Management and education, he holds patents in a number of areas ranging from medical devices to drip irrigation to temperature sensors

Customer Reviews

Most Helpful Customer Reviews
335 of 341 people found the following review helpful
Format:Paperback
Eliyahu Goldratt's "The Goal" is an entertaining novel and at the same time a thought provoking business book. The story is about a plant manager, Alex Rogo, whose plant and marriage are going downhill. He finds himself in the unenviable position of having ninety days in which to save his plant. A fortuitous meeting with an old acquaintance, Jonah, introduces him to the Theory of Constrains (TOC). He uses this new way of thinking to ...
TOC postulates that for an organization to have an ongoing process of improvement, it needs to answer three fundamental questions:
1. What to change?
2. To what to change?
3. How to cause the change?
The goal is to make (more) money, which is done by the following:
1. Increase Throughput
2. Reduce Inventory
3. Reduce Operating Expense
Goldratt defines throughput (T) as the rate at which the system generates money through sales. He also defines inventory (I) as everything the system invests in that it intends to sell. Operating expense (OE) is defined as all the money the system spends in order to convert inventory into throughput.
The author does an excellent job explaining his concepts, especially how to work with constraints and bottlenecks (processes in a chain of processes, such that their limited capacity reduces the capacity of the whole chain). He makes the reader empathize with Alex Rogo and his family and team. Don't be surprised if you find yourself cheering for Alex to succeed.
The importance and benefits of focusing on the activities that are constraints are clearly described with several examples in "The Goal". One example from the book is the one in which Alex takes his son and a group of Boy Scouts out on a hiking expedition. Here Alex faces a constraint in the form of the slowest boy, Herbie. Alex gets to apply two of the principles Jonah talked to him about - "dependent events" (events in which the output of one event influences the input to another event) and "statistical fluctuations" (common cause variations in output quantity or quality). He realizes that in a chain of dependent processes, statistical fluctuations can occur at any step. These result in time lags between the processes that accumulate and grow in size further down the chain. This leads to the performance of the system becoming worse than the average capacity of the constraint.
It is interesting to note that TOC practitioners often refer to TOC concepts in terms of references from this book. For example, a constraint is often called a Herbie.
The Goldratt Institute (goldratt dot com) has illustrated TOC Analysis in the form of five steps used as a foundation upon which solutions are built:
1. Identify the constraint
2. Decide how to exploit the constraint
3. Subordinate and synchronize everything else to the above decisions
4. Elevate the performance of the constraint
5. If, in any of the above steps the constraint has shifted, go back to Step 1
Although this book is excellent in the context of Operations, the "Goal" to "make (more) money by..." is limited in its focus. It is concerned with the cost centers internal to a business. Business performance in today's increasingly competitive market depends on a variety of factors that exist outside the business. These include competitors, external opportunities, customers and the non-customers. Executives need to focus on these in order to see the bigger picture.
This book is necessary reading at the best MBA programs. In addition to being a review, this write-up was intended to serve as a summary of the core concepts of this book and TOC. If you are reading this as part of your coursework, please feel free to share the link with your fellow students.
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24 of 27 people found the following review helpful
Concepts from The Goal February 21, 2005
Format:Paperback
The author of this business novel thinks he's the Messiah. The gist of the 384-page book could have been expressed in a page, and some of it is obvious. But it may be useful anyway, and it's an entertaining read.

His schtick is that one can achieve great gains by identifying the bottlenecks ('constraints') that are blocking improved performance toward your goal, and then doing anything necessary to unblock those constraints - even if this means inefficiently using other non-bottleneck resources.

He says that one should think of the cost of each resource as including its effect on the whole system. So if a machine costs $1K/month to operate, but its rate of production is preventing the business from accepting or fulfilling extra orders that would represent $10K/month in profits, then the true cost of the machine is $11K.

It follows that anything one can do to remove that bottleneck would be worthwhile, provided it adds less than the amount saved to the cost and doesn't introduce a new bottleneck. It's fine if you have to overpay for other resources or use them inefficiently as long as you accomplish this.

It then becomes a matter of analyzing and brainstorming all the ways that bottleneck can be reduced. For instance:

- Can extra capacity be added, even if it is less efficient or uses antiquated equipment or is outsourced to a vendor?

- Can you prioritize the use of the bottlenecked resource so that high-profit and time-sensitive work comes first?

- Can you divert work that doesn't need to go through the bottleneck, even if it would then go through another more cumbersome process?

- Can you prevent work from reaching the bottleneck if Quality Control will eventually reject it?

- Can you increase the rate of output of the bottleneck resource by doubling up batches?

This logic applies regardless of the nature of the bottleneck - whether it relates to a machine (production capacity), marketing effort (how much business is coming in), or any other element of one's environment.

To help identify the bottlenecks and judge tradeoffs, one should identify one's goal as a measure (in a business context this is generally profits or ROI), then identify the factors that influence that measurement and create an equation. For instance,

Profits = Sales - Cost of Inputs - Cost of Transforming Inputs

or,

Return On Investment = (Sales - Cost of Inputs - Cost of Transforming Inputs) / Money Trapped In Unfinished Goods And Inventory

Essentially, his thesis is that by focusing on these bottlenecks, and analyzing and brainstorming their solutions, one takes advantage of the 80/20 rule by prioritizing those few factors that most greatly impact one's performance.

The most rewarding part of the book are the examples in the Testimonials section at the end. The testimonials describe creative solutions to tough bottleneck situations. The book doesn't help the reader come up with this type of creative solution - it only mentions where to look for the problem. Here are the memorable examples he cites:

1. A large office supply company (similar to Staples) was losing business to companies that were charging very low prices. Investigating this marketing bottleneck, they determined that from the customers' perspective, the larger problem was the overall cost of stocking and procuring and purchasing and tracking the office supplies.

Rather than competing on price, its owner fixed the Sales bottleneck with an innovative concept, where they arranged to place fully stocked cabinets filled with office supplies throughout their client companies, just like a hotel minibar. They'd visit each week, restock any items that were used, and charge the company for the items that were removed, thereby saving the company the aggravation and cost of even having to purchase or account for office supplies. They also supplied each customer with detailed information regarding what was used, when. In exchange for this unique convenience, they charged higher prices and achieved large profit margins.

2. A printing company, constrained by the number of presses available to print jobs, made more efficient use of its presses by routing jobs to different types of presses in a way that would maximize the total output of the presses.

3. A manufacturing company's output was limited by a saw that cut pipes. They dug up an old, inefficient saw, put it to work to remove that bottleneck, and increased output and profits significantly.

4. In the book itself, the protagonist's factory increased its Return On Investment (profit/money tied up) by shortening the time it took for a product to be manufactured (as doing that reduced the money tied up, hence increased ROI). This was accomplished by removing delays that were keeping costly unfinished products sitting around the plant. For instance, by reducing the 'batch size', a product would wait less time for its batch to be complete, allowing it to move to the next step of production sooner.
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10 of 11 people found the following review helpful
Format:Paperback
I didn't know what to expect when I began reading this novel about a manufacturing plant. As provider of a professional (legal and risk management) services, I initially thought this wouldn't have much application for me. But it certainly does. First, the story itself, told as a novel, is an enjoyable read. This must be the first business book that I didn't want to put down until I had finished reading it from cover to cover!

Key points in the book include the principle of finding and then focusing on the one true goal and not getting caught up on a lot of side issues that others (even others in management) might think are the goal. This requires learning how to stop and really look at the problem. It then requires new ways to look for and try potential solutions. This includes ask penetrating questions of yourself and others who may provide key information and insights. And it requires really listening to what the affected people have to say about different aspects of achieving the goal.

An important point that is made is that every individual within the organization has part of the knowledge needed to reach the goal, and that we need to create a genuine environment where we not only encourage their participation but we also teach everyone how to ask the right questions so they can see for themselves what needs to be done to achieve the goal.

Incidentally, the partnership of communication that ultimately develops between the lead character and his employees and superiors overflows into his relationship with his spouse and naturally changes their relationship as well. There is much to be learned from this book, and I can see why it has been such a huge success for so many years.
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Excelent Book, Excelent Experience.
It was the first time I read a book on the Kindle (iPad version). It was amazing.

The book itself is also great. Read more
Published 12 days ago by limejack
Great Read for Engineering Students
For those who spend endless amounts of hours reading text books learning about engineering like myself, this will be a good escape from that. Read more
Published 14 days ago by LanceI
Good for Business
An inspiring story. There are ways to look at the way your company is running and ways to fix issues. It is hardest when others buck the system but positive strategy will work.
Published 1 month ago by AuntE
Recommend
Really good book. I recommend reading, specially if you are starting to work with manufacturing operation.
Easy and quick to read.
Published 1 month ago by Rafael_Chicago
The Goal: A Process of Ongoing Improvement
Get ready to rethink your approach to solving business problems as you follow along with the characters to solve their perceived issues. Read more
Published 2 months ago by nana3
Everybody should read it
One of the best books ever written, not just for business, but for any goal in life that has obstacles in its way. Read more
Published 2 months ago by Kyle Bennett
Quick Service.
I ordered this book for our office. It came within 4 - 5 days of ordering. It has been passed around the staff and I have not had a chance to read it yet. Read more
Published 3 months ago by Sally Jarrett
Very easy read
I like the authors way of teaching Operations using a novel. The author has done a very good job of keeping the story interesting and informative.
Published 3 months ago by Praful
Great
This is one of the best business books I have read. The way it's been written definetely makes you learn.
Published 3 months ago by Vj
The Goal
Great book! A must-read for anyone in Production and Operations Management. It will open your eyes to a new world of perspectives on how a manufacturing facility, and business in... Read more
Published 4 months ago by Lupo
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