The Goal Analysis

Eliyahu M. Goldratt’s book The Goal tells the story of Alex Rogo (a plant manager) and the transformation that both he and his plant go through as he attempts to reorganize and restructure his facility in order to bring it back to a profitable state and to save it from closure. Throughout the story we see a relationship form between Alex and Jonah (an old professor) as Alex (and his team) receives advice on his operational problems through a series of questions posed by Jonah. These questions eventually lead to noteworthy improvement to the plant’s operations (the most profitable plant in the company) and a promotion to Division President for Alex.
Throughout this transformation story the reader is able to learn many valuable theories related to system and production management. Most notably the reader sees how Alex and his team (with the help of Jonah) learn and then implement the “Theory of Constraints” in their plant to improve operations. I will discuss the details of this theory in the following paragraphs.
The “Theory of Constraints” is the notion that every production system has at least one constraint that prevents or limits operations from achieving their goal. In order to identify these constraints management must first identify what their “goal” is. What is the purpose of their operations? What is the ultimate reason they exist? In the case of Alex’s situation (as well as many other organizations) the goal is to make money for the firm.
Once the goal of the firm is identified all activities of operations should be analyzed in light of this defined goal. Any activities that bring you closer to the goal should be considered productive while everything else is considered counter-productive. Looking at operations under this framework allows for a more well-rounded understanding of plant activities as related to the ultimate goal. It allows for both the understanding of what activities are taking place during the production process and