The Goal: A Process of Ongoing Improvement

The Goal: A Process of Ongoing Improvement

by

Eliyahu M. Goldratt and Jeff Cox

Teachers and parents! Struggling with distance learning? Our Teacher Edition on The Goal can help.
Lou is Alex’s plant controller (chief accountant). Although Lou is both intelligent and experienced, Alex notes that he initially makes the same wrong assumptions as anyone else about why the plant fails (poor workers, labor union interference, and so on), suggesting that those flawed assumptions are ubiquitous among businesspeople. However, when Alex and his staff begin implementing Jonah’s new ideas, Lou quickly realizes that the traditional corporate metrics he uses to measure the plant’s performance are deeply flawed and outdated. Even after adopting Jonah’s guiding metrics of throughput, inventory, and operating expense, Lou recognizes that their cost accounting measures provide inaccurate data. As a result, Lou spends much of his time developing better ways to calculate expenses and measure efficiency, even going against corporate guidelines to do so. When Alex becomes division manager, Lou asks Alex to make him his division controller so that he can reform the division’s cost accounting methods and implement a new, more accurate system for all of their plants. Alex grants Lou’s request, and they prepare to take over the division together.

Lou Quotes in The Goal: A Process of Ongoing Improvement

The The Goal: A Process of Ongoing Improvement quotes below are all either spoken by Lou or refer to Lou. For each quote, you can also see the other characters and themes related to it (each theme is indicated by its own dot and icon, like this one:
The Importance of Goal-Setting Theme Icon
). Note: all page numbers and citation info for the quotes below refer to the The North River Press edition of The Goal: A Process of Ongoing Improvement published in 1984.
Chapter 36 Quotes

“Everywhere, improvement was interpreted as almost synonymous to cost savings. People are concentrating on reducing operating expenses as if it’s the most important measurement.”

“Not even that,” Bob interrupts. “We were busy reducing costs that didn’t have any impact on reducing operating expenses.”

“Correct,” Lou continues. “But the important thing is that we, in our plant, have switched to regard throughput as the most important measurement. Improvement for us is not so much to reduce costs but to increase throughput.”

Related Characters: Lou (speaker), Bob Donovan (speaker), Alex Rogo , Eliyahu Goldratt
Page Number: 297-298
Explanation and Analysis:
Get the entire The Goal LitChart as a printable PDF.
The Goal: A Process of Ongoing Improvement PDF

Lou Character Timeline in The Goal: A Process of Ongoing Improvement

The timeline below shows where the character Lou appears in The Goal: A Process of Ongoing Improvement. The colored dots and icons indicate which themes are associated with that appearance.
Chapter 6
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization Theme Icon
...is just busyness for its own sake. He wonders if all the measurements his controller, Lou, uses to check the plant’s efficiency really only measure how busy they keep the employees. (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...messages from Bill Peach, but when Alex tries to call him back, no one answers. Lou enters Alex’s office to let him know that he’s sending Peach all of their accounting... (full context)
Ineffective vs. Effective Business Metrics Theme Icon
Lou asks Alex if the plant is about to be closed, and Alex admits that it... (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Late in the evening, after Lou goes home, Alex sits with a pad of paper and a pencil. He writes out... (full context)
Chapter 8
Ineffective vs. Effective Business Metrics Theme Icon
The Cost of Corporate Success Theme Icon
...numbers and measurements with Peach (who is furious that Alex walked out on his meeting), Lou, and Ethan Frost. After dark, Alex is about to go home when he remembers his... (full context)
Chapter 9
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization Theme Icon
...plant, he thinks about Jonah’s new metrics—which aren’t so different from what he brainstormed with Lou—and how to apply them to the overall goal of making money. Alex decides the plant... (full context)
Chapter 10
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...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... (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
The Cost of Corporate Success Theme Icon
...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... (full context)
Chapter 17
Working with Constraints Theme Icon
Alex expects his staff—Bob, Lou, Stacey, and Ralph Nakamura, his data processor—to be as thrilled as he was about what... (full context)
Chapter 18
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
...where she is. On Tuesday morning, Alex arrives at his office to find Bob, Stacey, Lou, and Ralph there waiting for him. They discuss what happened the day before. Alex points... (full context)
Working with Constraints Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...table is covered with charts, data sheets, printouts, and so on as Alex, Bob, Stacey, Lou, and Ralph search for their bottlenecks. Ralph is frustrated—much of their data is years behind,... (full context)
Chapter 19
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
...new problems on the way. When Jonah arrives at the plant, Bob, Stacey, Ralph, and Lou meet him. Bob states that they still need a way to increase their throughput without... (full context)
Chapter 20
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
The Cost of Corporate Success Theme Icon
...Afterward, Alex holds a meeting with his staff to decide how to implement Jonah’s advice. Lou determines that at least 80 percent of everything they work on must pass through the... (full context)
Chapter 25
Working with Constraints Theme Icon
...once again and brings him to the plant to meet with Stacey, Bob, Ralph, and Lou. Stacey explains that they have new bottlenecks, but Jonah suggests these new delays might not... (full context)
Chapter 29
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization 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... (full context)
Chapter 30
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization Theme Icon
At the start of the new month, Alex and his staff have their monthly report. Lou reports that they had a 17-percent improvement thanks to Burnside’s order, which meets Peach’s demand.... (full context)
Ineffective vs. Effective Business Metrics Theme Icon
...methods, even though Alex insists that it gives a more accurate representation of their expenses. Lou receives a warning from Frost to stick to the traditional measures, but other than that,... (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
While Lou and Alex are meeting about the revised numbers, they hear a helicopter land in the... (full context)
Chapter 33
Ineffective vs. Effective Business Metrics Theme Icon
Alex approaches Lou, intending to recruit him to division management as part of his team. Before Lou can... (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...can help deliver answers to specific questions, like the ones that Bob or Stacey or Lou will have as they design their new ideas. (full context)
Chapter 36
The Importance of Goal-Setting Theme Icon
...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.” (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
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... (full context)
Chapter 37
The Importance of Goal-Setting Theme Icon
Efficiency vs. Optimization Theme Icon
...more of a bottleneck than the NCX-10 and heat-treating machines—they are limited by their sales. Lou agrees but wonder why the NCX-10 is still working at capacity. Stacey admits that to... (full context)
The Importance of Goal-Setting Theme Icon
Efficiency vs. Optimization Theme Icon
Everyone is satisfied except for Lou, who realizes that with this new process, every metric they’ve used to measure progress (including... (full context)
Chapter 38
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
Alex picks Ralph and Lou up early in the morning and drives to headquarters, calculating in his head how he... (full context)
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
Alex and Lou think a moment, then tell Jons they can produce products for the French at 10... (full context)
Chapter 39
The Importance of Goal-Setting Theme Icon
Lou and Alex chat in Alex’s office. Lou is impressed with Bob’s new leadership, but Alex... (full context)
Chapter 40
The Importance of Goal-Setting Theme Icon
Lou and Alex drive home from headquarters together, as they have every day for the last... (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
The Cost of Corporate Success Theme Icon
Alex fears that all they are doing is collecting data, but Lou insists data collection is not inherently bad. The problem is that their measurements are still... (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Later, Lou and Alex meet to analyze their issues: Lou believes that bad metrics are the division’s... (full context)
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...will have to learn to be “[their] own Jonahs” and figure it out for themselves. Lou puts an arm around Alex and tells Alex that he is proud to work for... (full context)