Of course, read this book!

Every engineer, every MBA candidate, every manager must read this book. It gives very simple and clear explanation of manufacturing side of life. Bottleneck concept can not be explained better than this. Technological advancement (like robotics, in this book) needs some adaptation time. This book helps to minimize that adaptation time. Also, he defines real metrics of success "Money". He suggests that every manager should ask himself "How much money I made for my company". This is the goal to attain, do not go with other secondary measurements.

I hate to read books - I liked this one

I had to read this for a class. I never put it down. I can't believe how much I liked it.

The Goal by Eli Goldratt

Eliyahu Goldratt's The Goal is a highly recommended book that engineering students (IE/MFE) should read and learn. The book demonstrates the "Theory of Constraints" in a very interesting and fascinating manner. It vividly shows what the goal of a business and suggests a number of methods that are both practical and logical. These methods could be applied in manufacturing and service companies.

In the book, Eli Goldratt raised key issues that concern management and family decisions. The author empahsizes that fact that society can be a source of information and inspiration where relationships can be applied relating to the business world. This was illustrated by the author using the hiking experience that was an essential chapter of the book. Also, it encourages managers or future managers to use common sense in making decisions and consider alternative ways of approaching problems or challenges. Furthermore, managers should be able to identify the need for change. It is very important to know what changes to make, what to change to and how to cause this change.

The Goal is a fictional story of a man who is at his crossroads and tells what direction the man decides to take. The story is about a plant manager named Alex Rogo. Alex is just six months into his first plant manager's position at UniCo which is a division of UniWare. This manufacturing plant is located in Bearington, Massachusetts where Alex Rogo grew up. What the plant manufactured was unclear or never answered in the book.

The story begins when Alex's supervisor, Bill Peach, comes in the plant and changes everything. Bill Peach turns the plant upside down. Bill tells Alex that the production of his plant has gone down in the six months that Alex took over the plant mananger position. This situation created irate customers like Buky Busnside who has an order that is fifty six days overdue. Alex must get thsi order shipped before anything else. Bill Peach gives the plant an ultimatum that if the plant does not turn around in the next three months, he will recommend that the plant be closed. The next few days, Alex hears more of the same news at a corporate meeting and figures why Bill was upset. During the meeting Alex reaches for something in his pocket and comes across a cigar he received from a chance encounter from an old physicist he knew during his college days.

Waiting in between flights at O'Hare, Alex wandered into the airport and found himself sitting next ot the physicist name Jonah who worked on mathematical models wile he was an undergraduate engineering student. Alex and Jonah started talking. Alex mentioned that he si going to speak at a seminar and his topic is "Robotics: Solution for the 80's to America's Productivity Crisis." He tells Jonah that his plant has more robots than any other plant in the division. Jonah was not impressed. Jonah asks how much productivity has improved because of the use of the robots. Alex answers that just one department is producing 36 percent more. Before leaving Alex at the airport, Jonah raises this question to Alex, "What is the goal of hsi company?" Jonah tells him to think about it as he leaves Alex at the airport.

As Alex spends an entire afternoon thinking about "the goal", he finally comes up with the answer: The goal of the company is to make money and everything else they do is a means of achieving the goal. Once Alex figures this one out, he decides to get a hold of Jonah to learn more about productivity. As he gets a hold of Jonah at 2 a.m. in London, Jonah explains that an action towards the goal is productive, and an action away form the goal is unproductive. He also gives Alex three measurements: Throughput, the rate at which the system generates money thru sales. Inventory, all the money that the system invested in purchasing things which intends to sell. Finally, Operational Expense, all the money that the system spends in order to turn input into throughput. To make money, Alex must increase throughput while simultaneously reducing the inventory and operating expense. In a meeting in New York over breakfast, Jonah explains to Alex that Traditional manufacturing goals are always to run a balance plan where the capacity of each and every resource is balanced exactly with the demand from the market. But Jonah stressed that the closer you come to the perfectly balanced palnt, the closer you are to bankruptcy.

Alex is woken by his son woho reminds him that he promised to help lead the scout hike overnight. Alex leaves without saying goodbye to Julie, his wife, and finds himself the only parent helping on the hike. Throughout the course of the hike, Alex realizes that on overweight boy, named Herbie, slows down the middle and the end of the line. Alex does not understand why the line separates so greatly if all the boys are walking at two miles per hour. Eventually it dawns on him that Herbie is the statistical fluctuation and the rest of the line of kids are dependent events. He fixed the problem by putting Herbie in front of the line and distributing the load of Herbie's backpack to the rest of the scouts. As father and son returned home from the hike, Julie has left. Alex realizes that he needs to work on his marriage as much, if not more that his work. Both are on the rocks. This is where Alex reevaluates the way he has been looking at things for the past few months or maybe hsi entire life.

Alex's mother moves into the house to look after the kids. Alex calls Jonah to expale what he leared from the hike and how it relates to the factory. Honah explains that Alex has two kinds of resources, bottlenecks and non-bottlenecks. A bottleneck resource is one in which capacity is equal to or less than the demand placed on it. A nonbottleneck is where capacity is greater than demand placed on it. Alex must determine which processes are bottlenecks. Alex and his staff seach the plant to find bottlenecks.

Alex and his staff determine that the plant's bottlenecks are heat treat and the NCX-10. Jonah explains that they mus increase the capacity thru the bottlenecks in order to increase thoughput and improve cash flow. At this point Jonah introduces new ways for Alex and hsi staff to look at machine hours and costing. Over a few weeks, with many trial and error, Alex and his staff finally turn out the first month of profit along with lowering invetory and improving cash flow. Also, Alex starts to think about his marriage more and talks with Julie again. They even went on a few dates together. Alex begins to include Julie in his process of growth, by explaining to he the changes that are going on in the plant, and finds that she is very interested.

The next step for Alex is to cut his batch sizes to cut his invertories down and improve overall efficiency of the plant. With shortened lead time, the whole production process is able to respond to market demand faster. Alex starts promising sales that orders that used to take five months, will now only take four weeks due to the shorter lead times. The three months is up and Bill Peach still is not completely convinced whether or not this current success is not just a sudden spark. Bill tels Alex that if he does not see a 15% improvement the plant will close. Business is great and Lou, Alex's accountant, helped in showing a 17% improvement however according to traditional accounting this is only a 12.8% increase. Hilton Smythe, the productivity manager and rival aof Alex takes notes and make his rocommendation for the plant to be closed because of the awkward style of productivity. Alex haunts down Bill Peach to see what he has to say about this. Bill tells Alex to calm down and congratulated him on his new position as division manager. Bill wanted to see who would be able to see beyond conventional methods, in order to compete in the new market.

Alex is successful at home and at work. Julie decides to move back in after rekindling and working on their relationship. In her time away, Julie read about Socrates and found that Jonah had been using the Socratic method all along. She shows Alex that giving the answer isn not always the key but helping one ask the questions is the true answer.

The book is easy to understand and read. This book should be in every engineers book collection or library. I hope you guys enjoy reading it as much as I did.