The Goal Summary

The Goal by Eliyahu M. Goldratt tells the story of Alex Rogo, an industrial engineer with an MBA degree. He oversees one of the plants at UniCo Manufacturing Corporation. Alex’s plant is having difficulties in its operations, such as late shipments, production congestion, and lack of inventory. As a result, Mr. Peach, the VP of the company, gave him three months to turn around the plant, otherwise it might get shut down. Alex remembers his physics professor, Jonah, and asks him for advice. The main lessons that Jonah teaches Alex are that using traditional accounting data can be confusing and might not be the right way to improve the efficiency he needs in his plant. Jonah starts by differentiating between three measurements, which will be
Finally, Alex learned that to achieve the goal, he needs to start focusing on the system overall, and not just on separate parts. Several important lessons will be discussed further below. Just as mentioned above, one of the most important lessons mentioned in chapter 8, a conversation between Jonah and Alex takes place regarding the goal of the company and what that means, Jonah tells Alex that he has some set of measurements that help assess the financial situation of a company. These include throughput, inventory, and operational expenses. According to Jonah, throughput refers to “the rate at which the system generates money through sales.” (p. 66). The traditional definition of throughput is how much of a product or service can a company produce at a given time. The definition of Jonah makes more sense to me because he states that throughput is related to sales and production. This means that there would be no throughput and no money generated if a company produces a product but does not sell it. Inventory refers to “all the money that the system has invested in purchasing things which it intends to sell.” (p.