The Goal, By Eliyahu Goldratt Essay

4. What is the “Goal”? Why does Alex need two sets of measurement: (1) Net profit, ROI, and Cash flow; and (2) Throughput, Inventory, OE?

In order to be productive all members of staff should be aware of the goals of the firm. Knowing the goals allows the manager to make effective decisions. The goals of the firm can be viewed as the motives of the entrepreneur’s who own and run the firm. There a number of goals that a firm can pursue in its day-to-day

The Goal by Eliyahu Goldratt is an entertaining and thought provoking business book. The story is about Unico manufacturing plant and its manager – Alex Rogo whose job and marriage is hanging in the air. Bill Peach, who is the factory executive comes into the plant and notices that production has gone down since Alex has been appointed manager. There is six months of production backlog and late shipment of order to customers. Unico is neither productive nor profitable. As a result Alex finds himself in an uncomfortable position of having three months to turn things around or the plant goes downhill.

Throughout the entirety of the book, The Goal: A Process of Ongoing Improvement, author Eliyahu M. Goldratt focuses on demonstrating the importance of the Theory of Constraints and what corporations should do in order to increase profits. A major term used throughout the novel is “throughput,” which according to the text, is “the rate at which the system generates money through sales” (Goldratt 60). Once a bottleneck machine in a production process is identified, there are multiple ways to increase throughput without expanding the physical capacity of the machine.

Productivity according to Stevenson (2016) can measure the output over time, this allows the organization to evaluate the performance and determine where improvements can be made. My organization

Through that conversation, Alex realized that “productivity is the act of bringing a company closer to its goal” ( 1992). Alex thought the company’s goal is to increase efficiencies but he later realized that every company’s goal, including his plant, is to make money or to be profitable and anything that comes closer to the goal is considered as productive.

Many companies are doing a great job at being and remaining productive. As the companies productivity increase then so will the revenue. Increased productivity and revenue proves that the successful companies have taken steps to ensure their future and growth. This growth can be achieved with all companies that will follow the same formula. The formula can involve a number of different methods however the best methods that seem to be the most useful is by using cluster sampling, surveys containing open-ended questions and analyzing employees or the company as a whole. A company that could really use an evaluation to increase productivity is Best Buy. Best Buy is an electronics company that has been one of the leaders in electronic sales for years. However, over the years beginning in 1997 Best buy has had numerous makeovers and some downscaling. Some of the downscaling was the cause of less productivity or because they wanted to extend their electronics catalog.

The book has two parts. In the first 264 pages, a manufacturing plant manager turns his failing plant into a tremendous success. That part of the book ends with the manager's promotion to a position with oversight over several failing plants. In the second part of the book (73 pages), the manager prepares for his new job by trying to deduce a repeatable "process of ongoing improvement." He's trying to make sense of what happened in the first part of the book so he'll have half a chance of repeating that success on a greater scale.

Productivity is the cornerstone of any organizations profitability. This means that any organization can be deemed productive if all its moving parts are working

Since the beginning of the industrial revolution manufacturing organizations have followed the rules that idle time is lost time. That the only way to make money is to keep everyone and everything operating at 100 percent. When in fact a plant that runs it's resources at 100 percent all the time is actually a very inefficient plant. Most of the time the struggle to meet efficiencies is taking the organization further away from it's goal. Excess production creates excess inventories that in turn ties up money and slows down or impedes cash flows. The key to balancing production is to search out those places in the plant that slows down all the processes behind it, essentially a bottleneck. Obviously the bottleneck can't just be removed so the rest of the process must be governed by the speed at which the bottlenecks can operate. Release of materials must be staggered so that just as a batch is sent through the bottleneck another batch is waiting in front of it to be processed. No other non-bottleneck area can be allowed to operate faster than the bottlenecks can handle otherwise the inventories will begin to climb again.

The productivity of any organization depends on the satisfaction of the employees, as happier employees also make more profit as they work faster and harder.

I really enjoyed this book. It was easy to read and easy to comprehend. The examples used in the book make the main ideas of the book memorable and easy to understand. I loved how the authors described the thinking process of the main character, Alex, in a day to day every person’s situations.

“The Goal” is as it vividly explains, is a book on achieving goals. Eliyahu Goldratt, world famous Israeli physicist turned business consultant, the creator of the “Theory of constraints”, in his work “The Goal”, explains a lot about managerial skills, to achieve higher productivity and efficiency, in a simple and lucid manner.

The article “Service Quality and productivity: a synergistic perspective” proposes a conceptual framework to understand the interdependence and links between service quality and productivity. The article stresses a different perspective of productivity than the conventional perspective of productivity. It proposes a dual perspective of “company-customer productivity”. The article defines productivity from both the company and the customer’s perspective. The company views productivity as a measure of ratio of producer’s output to input. The customer views productivity as the service output experienced by a customer to the inputs provided by that customer as a member participant in the service obtained. So organizations need to concentrate on measures to improve productivity in such a way that all the stake holders viz-a-viz, the customer, employees and the organizations satisfied.

Introduction: Productivity is the ability of an organization to utilize its own available resources in order to produce profitable goods or services as desired by its customers or clients. Productiveness helps to increase the overall efficiency of any organization. Once the efficiency of the organization increased, the production capacity of the organization is utilized to the optimum level. Thus, all available resources are used in an efficient and effective manner to get the best possible results. Increased production lowers the cost per unit of the product which in turn, results in reliable prices for better quality, which also enhances a business’ competitive advantage in the market.