By: Ankit Khator 15 Mahesh Chavda Nelson Rodgrieus Pratik Makhija 19 Ritu Singh Shonali Shenai Urvi Mehta - 23

About the Author

An educator, author, scientist, philosopher & business leader.

Obtained bachelors & masters degree in the field of science and doctrate of philosophy. He holds a number of patents in the areas from medical devices to drip irrigation to temperature sensors.

He has authored several business novels and non fiction works such as:

1. Production The Toc Way 2. Its Not Luck 3. Critical Chain 4. The Race 5. What Is This Thing Called TOC ? 6. The Haystack Syndrome 7. Necessary But Not Sufficient 8. The Choice and many more

Introduction To The Book THE GOAL

Its a different type of management book.

It has reached a sale of eight million copies. This book is in the form of a novel as suspenseful as a thriller and equally fast-paced.

The book is also about global principles of manufacturing.

Introduction

Story about a young executive Alex Rogo. Done his engineering under graduation and an MBA. Started career in UniCo as project manager and now works under Bill Peach as plant manager in Bearington, his hometown. Factory produces machined assemblies. Well trained staff led by highly experienced managers.

Current scenario

Orders bordering 2 months behind scheduled delivery date. 20 $ million unsold finished goods inventory lying in ware house. Facing an increasing cash shortage. Efficiency heading downward. If no improvement- shutdown. Deadline- 3 months

New hope

Running into old physics professor Jonah. Key identifiers of productivity- decreasing inventory, reducing expenses and selling more product. Jonah leaves Alex to ponder upon the concept of productivity. What is the GOAL?

Question left by Jonah: What is the Goal ?

Make product Increase market share Produce quality products Produce efficiently Hire workers Support the city, state and national economy Increase stockholder value

measurements of productivity
The 3 basic measurements of productivity:
Throughput (TP) Rate at which system generates money through sales. Sales Revenue - Raw material Expense Inventory (I) All the money that the system has invested in purchasing things which it intends to sell Operational Expense (OE) All the money that the system spends in order to turn inventory into throughput

Hiking with son

ALEXS OBSERVATION..

Final throughput is measured by the rate of the last and slowest operation in the sequence. Inventory is equal to the length between the leader and the backdoor, which should be minimized. Operational expense is roughly measured by the energy expended, which must be conserved. Some resources need to have more capacity than others, especially towards the end of the operating sequence.

Towards improvement

Returns to plant to confirm information. Introduces bottlenecks and non-bottle necks. Objective- maintain capacity slightly less than demand. 6 months lead time to train NCX-10 operators. Trained operators are leaving the company. Hidden excess capacity.

Considering alternate processes. Quality control. Zero defect. Total plant capacity = Bottleneck capacity Bottleneck defines plant throughput. Bottleneck per unit cost = Total plant operating cost Total production bottleneck hours

Activating a resource and utilizing a resource are non- synonymous. Activating simply turning it on. Utilizing - making use and moving towards the goal. Material release system. Reduce batch sizes. Four primary time components include: setup time, process time, queue time.

Potential to respond better to demand markets.

Solid profits and decreasing operating costs.

Alex announces his promotion. Bob - plant manager Stacy production manager. Removal of tags. Further market expansion.

Three fundamental decision issues

1. 2. 3.

Alex and Lou identify three fundamental decision issues as critical to the success of any manager: Knowing what to change. What to change to. How to cause the change.

Conclusion

Dr. Eliyahu Goldratt states, Production is the heart of industry. Industry is the heart of a nations wealth and concluding he hopes that his book and theories help in strengthening it.