The Useful Business Concepts on The Goal by Eliyahu M. Goldratt
Learning objectives: Enjoy reading one of the most famous books in OM and think hard how you can apply the concepts to your business.
Instruction: Purchase or rent any edition/any language of The Goal by Eliyahu M. Goldratt. Read it over. Explain three key concepts that your group thinks most important. (Don’t just copy the key words from the book. Digest the ideas and explain them in your own words.) Next, propose a plan for improving the operation of the company of your interest using these three key concepts. (Note: Choose one company that any of your group members belong to, previously belonged to, or are interested in working at.)
Each report will be evaluated on a pass/fail basis. 2% weight will be awarded for an excellent/exceptional report. 1% weight will be awarded for a mediocre report. 0% for a report mostly copied from internet or somewhere. The quality of the report will be used as a measure to judge the final letter grade when a student is on the boarder of two letter grades. Each report will be reviewed by SafeAssign to detect any potential plagiarism, which may lower your group members’ final letter grades by a half unit (e.g., B => B-). If SafeAssign reports a higher % score (>40%), you must resubmit your group report. Even if you cite an external source, you need to digest and express ideas in your own words.
The Goal by Eliyahu M. Goldratt
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The Goal by Eliyahu M. Goldratt
Though several books have been written on operations management, very few capture the topic in a clear manner as The Goal does. Written by Eliyahu M. Goldratt in 1984, the book has been republished and revised a couple of times. Its importance, especially to students in management fields is as visible today as it was when freshly written. Written in a fiction-like manner, the book follows the life of Alex Rogo, a plant manager in a factory owned by Unico Manufacturing, walking through a rough patch both at home and work. The factory is visibly moving towards disaster, and his marriage is headed to the rocks as well. He has been given 90 days to change the fortunes of the factory or else it will be closed down. A chance meeting with a former classmate, Jonah, helps him break from the conventional way of thinking and adopt a new view that helps him turn the factory around. Moreover, the various concepts presented by Jonah are as effective in Rogo’s family as in the factory (Goldratt & Cox, 2004). Walking down Rogo’s journey to save his family and factory, a very strong message on operations management is presented to the reader. This paper seeks to discuss various concepts presented in the book and propose a plan to implement these concepts as a way of improving operations at Pepsi.
Bottlenecks
In production management, bottlenecks refer to particular processes in the chain of processes whose limited capacity leads to a reduction in the capacity of the entire chain. Bottlenecks lead to supply overstock, stalls in production, low employee morale, increased pressure from customers among various other challenges. The book emphasizes the need for identifying bottlenecks not only as a way of reducing their impact but also as a way to control the flow of materials. Following this advice, Rogo and his team embark on a mission to identify and address the various bottlenecks in the process as a way of speeding up production and increasing capacity. Outdated technology and various processes at the heat treat were identified as the major bottlenecks (Goldratt & Cox, 2004).
Theory of Constraints (TOC)
This is a management theory that advances that management systems are limited by various constraints. Through the use of focusing processes, TOC helps identify the constraints and restructure the organization around it. The constraints can either be internal or external. Internal constraints include people, equipment, and policies. The theory rests on the assumption that the state of an organization can be controlled and measured by the use of inventory, throughput, and operational expense. Before the goal is achieved