The Goal Summary

The Goal tells about the story of Alex Rogo who is the plant manager of a manufacturing factory which might get closed down. Late shipments, growing backlogs and increasing inventories are the main problems of the plant. Moreover, Alex has only 90 days to revitalize the plant; otherwise, the factory will be closed and hundred of employees will lose their job. At the same time, Alex has problems with his marriage because of his very busy business life. While he was struggling to survive the plant, he luckily encountered with his old physics professor, called Jonah. This meeting became the milestone for saving the plant thanks to Jonah’s advices. Following the Jonah’s measurements, Alex and his team try to improve the flow of production to

Also, he learnt about three measurements of Jonah’s translation for making money which were throughput, inventory and operational expenses. Throughput means generating money through sales besides inventory is the sum of the money invested in the product to be sold where operational expenses are the money invested by the system to convert the inventory to throughput. Thus, Jonah’s measurements described the goal as simultaneously increasing the throughput while reducing the operating expenses and inventory.
Also, Jonah states that it is not possible to balance the capacity with demand in a perfect way due to two phenomena. One of the them is dependent events and the other one is statistical fluctuations. Every plant has dependent events and statistical fluctuations and the combination of these two is the issue. Alex first encountered with statistical fluctuations during his boys scout hike that helped him to find out the

They cut down their lot sizes into half for the non-bottleneck lines in the product line which brougt a big success to them. Thanks to this strategy, their throughput increased and their inventory reduced. Although this strategy was successful, it should have limits. The limits can be understood when the money you earn by speeding up the system is lost with additional transfer fees and not getting wholesale discounts. It is cheaper to give order in bigger amounts because you can get wholesale discounts, also transfer fees are higher when you ordered in small