The Goal: A Process of Ongoing Improvement

The Goal: A Process of Ongoing Improvement

by

Eliyahu M. Goldratt and Jeff Cox

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The Goal: A Process of Ongoing Improvement: Chapter 10 Summary & Analysis

Summary
Analysis
After an hour and a half, Alex has explained Jonah’s concepts and new metrics to his staff. Lou observes that all of Jonah’s metrics directly relate to how much money is made or lost in any action. Furthermore, Jonah’s new metrics account for all of the old metrics they traditionally use but simplify them and make them less confusing. Bob, who remains wary of the new system of measurement, bickers with Lou, who sees the value in it. The four of them continue to debate how various functions and costs fit into throughput, inventory, and operating expense.
Lou’s observation that all of their traditional metrics can fit into throughput, inventory, and operating expense suggests that Goldratt’s new measurements are not completely changing the way people do business, but simplifying it and making it easier to understand. Simpler metrics produce a clearer picture of where money is being made or lost in a complex system.
Themes
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
The conversation briefly derails when Alex mentions that Granby will be at the plant in a few weeks to shoot his video. Lou, Stacey, and Bob worry about looking good for Granby. However, all Alex cares about is how to change the way they use their robots to make them productive toward their goal rather than counterproductive. To reiterate how important this is, Alex tells Stacey and Bob about Bill Peach’s ultimatum: they must become profitable within three months or the whole plant closes. They all agree that they should lower inventory because it wastes money, but they worry about giving the robots less to do, since lower efficiencies might upset Peach. Stacey suggests that they should call Jonah and ask for more help.
Lou, Stacey, and Bob’s concern about looking good for Granby appears to outweigh their concern for running a successful plant, suggesting that the pressure of corporate hierarchy often impedes good business practice. Additionally, their fear of upsetting Peach with lower on-paper efficiencies suggests that traditional corporate metrics can also be a hindrance. However, Peach’s ultimatum forces Alex and his staff to implement swift and immediate changes.
Themes
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
The Cost of Corporate Success Theme Icon
From their meeting, Alex calls Jonah’s number in London, but his office tells Alex that Jonah is currently in New York. Alex calls his hotel, realizing that it is the middle of the night there. Jonah answers but tells Alex that he needs to sleep—if Alex wants to talk, he should meet Jonah at his hotel for breakfast in the morning. When Alex hangs up, the rest of his staff encourage him to make the trip.
Alex’s willingness and his staff’s encouragement for him to make a last-minute, overnight trip to New York suggests that they are desperate for solutions to their problems with the plant.
Themes
Ineffective vs. Effective Business Metrics Theme Icon
The Cost of Corporate Success Theme Icon