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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Throughput Term Analysis

Throughput is the money that a business generates through sales. A manager should keep their throughput as high as possible.

Throughput Quotes in The Goal: A Process of Ongoing Improvement

The The Goal: A Process of Ongoing Improvement quotes below are all either spoken by Throughput or refer to Throughput. For each quote, you can also see the other terms 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:
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Throughput Term Timeline in The Goal: A Process of Ongoing Improvement

The timeline below shows where the term Throughput appears in The Goal: A Process of Ongoing Improvement. The colored dots and icons indicate which themes are associated with that appearance.
Chapter 8
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Jonah congratulates Alex for finding the answer. He offers three new measurements to operate by: throughput, inventory, and operational expense. “Throughput” describes the money generated explicitly through sales. “Inventory” describes the... (full context)
Chapter 9
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization Theme Icon
...to the overall goal of making money. Alex decides the plant needs to increase its throughput while keeping operational expense and inventory as low as possible. He wonders if the robots... (full context)
Chapter 10
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...it. The four of them continue to debate how various functions and costs fit into throughput, inventory, and operating expense. (full context)
Chapter 13
Working with Constraints Theme Icon
...the back, represents the plant’s increasing inventory. Alex’s slowed walking speed represents the plant’s decreasing throughput. Soon enough, Ron stops the whole troop for lunch. (full context)
Chapter 15
Working with Constraints Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...It doesn’t matter how fast the fastest kids are—Alex, at the back (representing the group’s throughput) can only move as fast as the slowest variable. (full context)
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...troop moves along at a good pace, all staying together. Alex thinks, “Inventory is down. Throughput is up.” They reach their destination and Alex calculates that after reorganizing, the hikers achieved... (full context)
Chapter 19
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
...and Lou meet him. Bob states that they still need a way to increase their throughput without raising their operational expense. They need more capacity. Jonah assures them that if they... (full context)
Chapter 22
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
The Cost of Corporate Success Theme Icon
...the bottlenecks rather than after eliminated six percent of wasted capacity, which should increase their throughput. Even so, Alex feels like it’s not enough. He asks his staff for more recommendations... (full context)
Chapter 24
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
The Cost of Corporate Success Theme Icon
...bottle of champagne and Styrofoam cups. They celebrate their last month of progress, since their throughput has improved and their work-in-process inventory has decreased. Bill Peach calls Alex, and Alex braces... (full context)
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
The Cost of Corporate Success Theme Icon
...She also tells Alex that it seems their bottlenecks are spreading: now that the plant’s throughput has increased, they are running into shortages of non-bottleneck parts. And since they’ve decreased their... (full context)
Chapter 25
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
...some parts and shortages of others. This creates excess inventory and thus reduces the plant’s throughput. (full context)
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization Theme Icon
...can take all the way through the manufacturing process and turn into sellable product, or throughput. As they walk back to the conference room, Jonah tells Alex and his staff to... (full context)
Chapter 26
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Efficiency vs. Optimization Theme Icon
...individual worker and machine efficiencies in the monthly report. If they can’t make their plant’s throughput higher, they’ll lose their plant anyway. (full context)
Chapter 27
The Importance of Goal-Setting Theme Icon
Efficiency vs. Optimization Theme Icon
...seems only mildly impressed. Alex gives his own report of their efforts: inventory is down, throughput is up now that they can ship products much faster, and even their efficiencies have... (full context)
Chapter 28
The Importance of Goal-Setting Theme Icon
Working with Constraints Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
Efficiency vs. Optimization Theme Icon
...plant can deliver products faster than their competitors can, leading to more sales and more throughput. Bob worries about increased setup time, but Alex reminds him that since this mostly happens... (full context)
Chapter 36
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
...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... (full context)
The Importance of Goal-Setting Theme Icon
The Cost of Corporate Success Theme Icon
...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... (full context)
Chapter 40
The Importance of Goal-Setting Theme Icon
Ineffective vs. Effective Business Metrics Theme Icon
The Cost of Corporate Success Theme Icon
...yet still counting them as income rather than inventory. No one is considering their actual throughput, and people are reticent to accept new metrics, since that would expose their poor performance... (full context)