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 29 Summary & Analysis

Summary
Analysis
In their house in Bearington, Alex lies awake next to Julie, who is sleeping. It’s four a.m., but Alex can’t stop thinking about the plant. Johnny Jons won them a host of new contracts, and the decreased batch sizes have sped the entire plant’s manufacturing process up. Although there is still some idle time for non-bottlenecks, the smaller batch sizes make everything move quicker, providing all workers and machines with more consistent work to do. Inventory is lower than ever. But there is also bad news, and Alex climbs out of bed to think about it. Julie approaches him from behind and asks him to come back to bed.
Once again, the fact that Alex is awake and thinking about work rather than sleeping with his wife—especially when they spend so little time together—demonstrates Alex’s corporate career’s cost to his personal wellbeing and relationship with Julie. However, the increased productivity at the plant suggests that Jonah’s decreased batch sizes are effective, allowing the plant to generate more throughput and have even less money trapped in inventory.
Themes
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
The Cost of Corporate Success Theme Icon
Alex tells Julie that he can’t sleep, and she intuits that it is because of his work. When she asks Alex to tell her about it, Alex is surprised that she would be interested, but he begins to explain: although their actual expenses haven’t gone up at all, because more people handle each part more often, the way that corporate headquarters wants them to do their accounting makes it appear as if their cost-per-part is swelling. The traditional metric assumes that all workers will always be fully occupied and to handle more parts they have to hire more people, but this isn’t true for Alex’s new system. Rather than dwelling on this, though, Alex opts to take Julie out for breakfast.
Alex wrongly assumes that Julie wouldn’t have any interest in his work problems— she does want to know about what consumes so much of his life. This suggests that some of their marital strife could have been avoided if Alex had been more willing to share his feelings and fears with Julie. Alex’s struggle with traditional metrics suggests that such dated metrics often provide an inaccurate picture of what is truly occurring within a business.
Themes
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization Theme Icon
The Cost of Corporate Success Theme Icon
At the plant, Lou tells Alex that he’s found a new way to calculate cost-per-part that doesn’t make their expenses appear artificially inflated. However, it breaks with traditional corporate accounting rules, and Lou knows that Ethan Frost would never allow it if he knew about it. Alex and Lou agree to use Lou’s new method and hope that Frost doesn’t notice. Shortly after, Johnny Jons calls Alex and tells him that Bucky Burnside wants to buy from them again, but they appear to be desperate—they’re asking for 1,000 products made and shipped in two weeks. Jons tells Alex that it seems nearly impossible, but if Alex can pull it off, Burnside will make their plant his preferred supplier. Alex tells him he’ll call back this afternoon with an answer.
The fact that Lou must develop his own accounting method and hide it from Ethan Frost again suggests that traditional corporate metrics are deeply flawed and don’t accurately describe a business’s overall health. However, Lou’s ability to develop and use his own accounting method that does provide a clearer picture implies that better metrics and accounting systems are possible, if corporate leadership will allow people like Lou to invent them. Burnside’s seemingly impossible order gives Alex the chance to test the limits of their new system.
Themes
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization Theme Icon
Alex meets with Bob, Ralph, and Stacey to discuss Burnside’s order. Alex wonders if they could cut their batch size in half again, if that would save them the time they need. However, Stacey realizes that a control module they need is currently out of stock and must be shipped from California, and the provider can’t deliver them for four to six weeks. After negotiating early partial shipments with the control module supplier, Alex calls Johnny Jons back and tells him that they could ship Burnside 250 products per week for four weeks, with the first rolling out in two weeks. Jons thinks Burnside might accept, though he thinks that it still sounds like a hard order to fill.
Alex’s ability to predict their own capacities and offer a compromise deal to Burnside likely wouldn’t have been possible with their old system, since they struggled to ship anything on time or estimate how quickly something could be produced. This ability to predict demonstrates another advantage of a steadily-paced, organized manufacturing system, which only appears possible within Goldratt’s Theory of Constraints.
Themes
Working with Constraints Theme Icon
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