The Goal Case

The Goal

-------- Reading Response

Ximiao Wang (Doris)

Summary

The Goal is really a book that full of wisdom. Goldratt is an Israeli physicist, but also created a unique theory that named TOC (Theory of Constraints) in business administration. Author puts his wisdom in a long story and leads readers think the question that how to make the factory bring the dying back to life following the protagonist of the book.

Logo, a director of a factory, faces a big problem that if he can not improve the benefits of his factory in three months, the factory will be closed. At this time, he meets his teacher Jonah, a physicist, an embodiment of author in my opinion. Jonah tells Logo that he should have a specific goal. What Logo wants? What a factory really need? I think this is the core of the book.

Logo finds the factor's goal is improve the retained profits. After that, he goes to think about the appropriate standard to measure his goals. Jonah starts teach him about the Theory of Constraints. He gives Logo three standards: throughput, inventory and operational expense.

The next question is how to turn our image becoming true. TOC execution of steps: The first step, find out the system bottleneck; the second step, decided how to excavate the bottleneck potential; the third step, other tie everything the decision; the fourth step, give bottleneck relax; Step 5, if step 4 broke original bottlenecks, then back to the first step.

Logo and his managers find out a problem and solve it. After that, there is another problem coming. The first problem is bottleneck. And another question is coming. Is the bottleneck independent without the whole system? We should focus on the whole system. Problems are continuously like that. This may be an other important view of TOC,"No Perfect". We can improve our management system continuously.

Logo successfully saves his factory. And he becomes the leader of other three factories. Unsurprisingly, he meets some problems again. And he asks for help from Jonah again. But Jonah refuses to give him suggestions. What I want to say is Goldrrat is also a great educationist. Learning is really a process that person find the answers out by self.

Application

Simply put, TOC is a set of management concepts and management principles that about to improve and how best to implement these improvements, can help companies achieve the goals and identified which there are constraints in the whole production process -- TOC called the "binding". It also pointed out how to implement the necessary improvements to the elimination of these constraints, so as to achieve business goals more effectively. TOC stressed the importance of the enterprise as a system, starting from the overall benefits to consider and deal with the problem

Application in industrial production

TOC puts forward in the system of industrial production. So industrial production is the foundation of the application of the TOC. The story of The Goal is also an example of application in industrial production. The speed of a whole production system often decides by the slowest part of the system. It is an easy problem to find out. But the really different part of the problem solving is to realize that bottleneck have to solve in a system, not in itself. If we only focus on the bottleneck, it may influence other part of the system. What we really need is synchronous manufacturing. For example, we can product 100 A and 30 B in an hour. One product needs 2 A and 1 B. So we only need product 60 A in an hour. Busy not equal with effective.

Application in supply chain

The application in supply chain is similar for it in the industrial production. We can look the entire participants in a supply chain, retailer, distributors, manufacturer and suppliers, as a productive process in a big system of industrial production. And the keynote is 'synchronous manufacturing' yet.

Application in human resource management

The reason why I believe that TOC can be used in human resource management is HR management is a behavior that make right people in a right place and do right things. What are the right people? The right people are who useful to the company to achieve the goals. If person's ability is not useful to the company, it is a waste even if the person is a graduate from Harvard. Doing right things means a person can do things no less no more. In most instances, less means bottleneck. But more is also bad, it means waste. We often recognize less is bad for the whole group working efficiency. Actually, person who work a lot effective than average level of the group is also a bad thing. He is not a right person. If people can work in a similar speed in a group, it is effective.

Application in strategic planning

In my opinion, TOC's most available part that can work in strategic planning is about definition of the waste. TOC believes that everything that not useful to achieve the goals is waste, whatever it is good or bad. What we often do is make a really long strategic planning, but the most part of the planning is only useful to show how knowledgeable we are. In fact, immediate goal is easy to understand, simple plan is easy to achieve. The purpose that we make a strategic planning is to indicate our goals and show how to achieve it to our employees. So complex means waste. Because employees can not understanding you.

Application in self-management