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 36 Summary & Analysis

Summary
Analysis
The next day, Bob and Stacey spend the morning dealing with new problems in their production line, and Alex privately wonders if everything will fall apart again. Once they begin their meeting, they realize that they need to set a new goal for themselves as managers, both over the division and the plant. Lou proposes that they make their new goal to create a “process of ongoing improvement.”
Alex’s staff’s need for a new goal suggests that goals may change as one achieves their initial ambition. Just as Lou and Bob’s career goals suggest that new people should iterate and improve on metrics and production systems, Lou’s proposed goal implies that even Goldratt’s revolutionary ideas will need improvement and refinement.
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Bob initially thinks that the phrase sounds like corporate jargon, but Lou points out that they have made improvements thus far by measuring every idea’s effect on throughput, rather than trying to reduce meaningless expenses as most people do. That is what made their work over the last few months successful. Rather than thinking of expenses as the most important function, they prioritized throughput, then inventory, and considered operating expense as the least important measurement. Alex considers Lou’s observation critically important and reflects that it represents a shift in the basic culture of the business, though he wonders how he can spread that to the entire division.
Lou’s reflection implies that businesspeople should focus on increasing their net profits rather than stressing about minimizing their expenses, as the novel suggests that most do. Lou offers an order of importance to the three metrics and believes that focusing on throughput rather than operating expense was the key to their success, indicating that Goldratt’s Theory of Constraints will only work when a manager prioritizes net profit over additional costs.
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Ineffective vs. Effective Business Metrics Theme Icon
Related Quotes
Bob still feels that they’re missing something, that the improvements they created were different in more ways than just the measurements they used. After thinking awhile, he excitedly exclaims that the word “process” is critical. Not only did they come up with new ideas, but they implemented them as a process of steps. They decide to write their process out: Step 1: “Identify the system’s bottlenecks.” Step 2: “Decide how to exploit the bottlenecks.” Step 3: “Subordinate everything to the above decision,” by matching the whole system to the pace of the bottlenecks. Step 4: “Elevate the system’s bottlenecks” by finding ways to increase their capacity. Step 5: “If, in a previous step, a bottleneck has been broken, go back to Step 1.” Written out, Alex thinks that it all seems simple. Stacey advises replacing “bottleneck” with “constraint.”
Bob’s claim that their improvement succeeded because it was a process reinforces the novel’s earlier suggestions that every process requires constant iteration and improvement. The five steps offer the novel’s most concrete instructions on how to perform that process. Notably, Step 5 loops back to Step 1, indicating the process will be a continual cycle of testing, improving, re-testing, and making new improvements. That is, managing a complex system is an ongoing endeavor.
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Working with Constraints Theme Icon
At home with Julie, Alex feels both elated and nervous. He isn’t sure how to increase throughput anymore without taking on so many sales that it derails the plant’s natural flow. Julie suggests he let Bob worry about the plant now, since he will soon take charge, and Alex realizes she is right.
When Alex is finally willing to share his life and his work with Julie, Julie turns out to be a wealth of good advice, suggesting that she could have helped him earlier if he had been willing to listen and accommodate her needs in return.
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The Cost of Corporate Success Theme Icon
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