THE GOAL

The book tells us the story of a plant manager, Alex Rogo, who is trying to save his plant, at least show some improvements within 90 days to keep it open. Alex's primary problem is that his plant can not consistently get a quality product out of the plant on time at the cost that can beat the competition. His plant is losing money and if he cannot make it profitable, the management eventually will decide to close the plant. In his fight to save his plant, a physician, Jonah, helps him in achieving his objectives.
Alex, with the help of Jonah, finds that the goal of a manufacturing organization and all organizations in general is to make money. Jonah explains the measurements which express the goal of making money in a different way. These measurements are:
• Throughput
• Inventory, and
• Operational expense
Throughput is defined as the rate at which the system generates money through sales. Inventory is all the money that the system has invested in purchasing things which intends to sell, and operational expense is all the money the system spends in order to turn inventory into throughput. Then it turns out that the goal of an organization is to increase throughput while simultaneously reducing both inventory and operating expense.
To help Alex in achieving his goals and solving problems in his plant in terms of the measurements which express the goal of making money, Jonah introduces him the theory of constraints. Theory of constraints approach includes the following steps to improve the performance of a system:
• Identify the system's constraint(s)
• Decide how to exploit the system's constraint(s)
• Subordinate everything else to exploit the constraint(s)
• Elevate the system's constraint(s)
• If in the previous steps a constraint has been broken, go back to step 1, but do not allow inertia to cause a system's constraint.
Theory of constraints approach requires answering three basic questions. These questions are:
• What to change?