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 33 Summary & Analysis

Summary
Analysis
Alex approaches Lou, intending to recruit him to division management as part of his team. Before Lou can offer the new job, he tells Alex that the plant will achieve an estimated 20-percent profit improvements for the next two months. However, Lou has discovered another serious flaw in UniCo’s traditional accounting system. Currently, although excess inventory is a liability, their methods count inventory as positive assets. Thus, when the plant reduced its inventory, what was actually a good sign appeared to be a bad sign. Lou states that he’s already explained it to Ethan Frost, which was part of why Frost was so supportive of Alex’s claims. Before Alex can even offer Lou the job, Lou tells him that he wants to keep reforming UniCo’s accounting methods. He wants Alex to make him his division controller, and Alex agrees.
Lou’s desire to keep developing suggests that although Jonah proposed three effective metrics, even those measurements need to be continually improved upon. As the nature of business and manufacturing continue to change, people like Lou must continue refining them and searching for flaws, ensuring that they are well-suited to the task at hand. Lou’s satisfaction in doing this sort of work suggests that finding better metrics is a valuable and essential pursuit. Significantly, Lou has a clear goal for his endeavor.
Themes
Ineffective vs. Effective Business Metrics Theme Icon
Next, Alex offers Bob a job on his new division staff. Bob flatly refuses. He tells Alex that after Burnside visited the plant, he realized how integral good production can be to sales and client relationships. Rather than oversee production for the entire division, Bob wants to master plant-level production systems and understand how to scale and adapt them. To continue rethinking old processes, Bob wants to be the plant manager once Alex leaves. Alex agrees, so long as Bob will consider moving up to the division level if he ever feels he’s mastered plant production and management. However, they are not sure who will replace Bob in his current role.
Like Lou, Bob’s desire to continue innovating and refining manufacturing plant production suggests that, despite Jonah’s effective strategies, there will always be more to improve upon. Through Bob’s decision, Goldratt effectively argues that even his Theory of Constraints should be reexamined and modified—productive as his theory is, someone else can always improve upon it. Like Lou, Bob has a clear goal for what he wants to achieve.
Themes
The Importance of Goal-Setting Theme Icon
They call Stacey and Ralph in. Stacey states that she wants to take over Bob’s role as production manager. She recently discovered that, although the bottlenecks are taken care of, a secondary problem arises with what she calls “capacity constraint resources” (CCRs), machines that fall behind only if sales increase at a rapid pace. Stacey wants to become production manager so that she can build and implement new measures to protect the manufacturing system from derailing due to newly arisen CCRs.
Although capacity constraint resources are introduced in the novel like another business term, Stacey will soon discover how to solve them, making them a negligible part of Goldratt’s overall theory. Even so, her observation provides a warning for managers to be watchful for new constraints, even when they have handled the initial bottlenecks.
Themes
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Ralph feels he’s contributed more in the past few months to solving real problems than ever before. Now, he wants to develop a newer, better data system that can help deliver answers to specific questions, like the ones that Bob or Stacey or Lou will have as they design their new ideas.
Although Ralph’s data management is less explored than the other character’s concerns, his sense that he’s helped solve important problems suggests that good data gathering and utilization are essential for overcoming complex obstacles.
Themes
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
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