Author : Eliyahu M. Goldratt and Jeff Cox
This book had been on my list for well over a year and it was definitely worth finally getting to. I listened to this one on audio which I definitely recommend (even over the book). The reason I suggest this is because of the great production in the audio version. All the characters are different voices and they definitely add to each personality of the characters in the story. They have added sound effects, background sounds and music where appropriate. It’s the best audio book I’ve ever heard for the quality and production aspects of it.
Its written as a fictional story about Alex Rogo, a manufacturing plant manager, struggling with the success of his plant as well as his marriage. His plant has undergone a serious downturn despite various improvements with new technology and higher efficiencies. He’s been given an ultimatum to turn the plant around or it will be shut down and the story is about his struggle and realizations of trying to recover the plant. His work centric lifestyle drives his wife to question their marriage and she moves out on him during this time so Alex is in a real bind and has to find ways to save both his plant and marriage!
Alex gets in touch with a past professor, named Jonah, who helps to guide Alex toward a series of steps and continual process of drastic and continual improvement. They explore and challenge the conventional methods in place despite the barriers from corporate head quarters and Alex’s skeptical boss. He learns to bridge the gap in tackling productivity by analyzing bottlenecks or constraints in the overall system, and not just individual areas within it that had otherwise always been the points of measure. Shockingly, he discovers what seems like common sense is not so common after all, and that putting into practice the non-conventional shifts can make a major impact on what he has learned the goal to be; to make money. Its not to cut costs, reduce wages, increase efficiency, or any of the other traditional measures that were in place. Its about balancing 3 critical areas of the plant’s operations in order to make more money, regardless of those other measures. These three components need to happen simultaneously in order to have any significance and these are:
- Reduce Inventory
- Reduce Operating Expense
- Increase throughput
He further implements changes at his plant based on the guidance of his new mentor, Jonah. He learns that in the plant there is a chain of dependent processes and with those, statistical fluctuations that can occur at any step and cause lags down the chain. This slows productions and ultimately makes the performance of the system much worse than the constraint on its own, since other barriers and delays keep piling up. Alex begins to restructure the thinking of his people and changes the process to maximize the use of the bottlenecks in his plant, while looking specifically at the 3 items listed above. This process is known as the Theory of Constraints . This theory comes into practice in the following 5 steps:
- Identify the constraint
- Exploit the constraint (or bottleneck) by keeping it running and maximize its output as much as possible
- Subordinate. Get everything to run at a pace that keeps up to the bottleneck, to avoid inventory jams.
- Elevate. Increase the throughput of the constraints no matter the costs since they limit the entire system throughput.
- Repeat with new constraints. As constraints are improve, new constraints will emerge, repeat with these next.
So, the values in this book are many. It is written brilliantly to portray an understandable method of analyzing a system to improve its performance and it demonstrates a method that can easily be applied and practiced in any organization or life. The details within the book are presented in such a simple and clear way, the context of them are transparent to other lines of business and not limited to the operations of a manufacturing plant, which the story is based on. The 1st person narrative style really emphasizing the thought processes of examining such a problem and definitely gives the reader a chance to think the same way even while reading the story!
I highly recommend this book. It was a much more useful with applicable steps than I thought from Peter Senges’ The Fifth Discipline , but that book is also an good read very much related. I had read it first, but I would recommend you read The Goal first, then Fifth Discipline.
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