The Goal Chapters

The Goal Characters Alex Rogo—Plant Manager Julie – His wife Bill Peach—Division Vice-President Bucky Burnside—President of one of UniCo’s biggest customers Bob Donavan—Production Manager

The Goal Chapters The Dilemma Alex Walks Into Order Peach’s News & Ultimatum Problem with the NCX-10 Machine Cost of Filling Order Tony Quitting Repair of the NCX-10 Overtime

The Goal Alex Tries to Reason with What’s Wrong Competition ????????

The Goal Chapters Chapter 3 Alex Rogo hears the news that the division will shut down within 3 months on his way to a meeting at the headquarters of UniCo, From Selwin, one of Peacher’s staff The meeting is about how to increase productivity because the company’s sales decrease and inventory cost increase

The Goal Chapters Chapter 3 During the meeting, Alex can’t pay attention Reaching into his jacket to get a pen, Alex finds a cigar that reminds him of Jonah

The Goal Chapters Chapter 4 Two weeks ago, on his way to the manufacturer’s association to talk about industrial robots, Alex meets Jonah, a former physicist teacher Alex brags about how robots have increased productivity, but Jonah challenges this concept

The Goal Chapters Chapter 4 Jonah tells Alex if inventories haven’t gone down, employee expense hasn’t gone down and if the company isn’t selling more products, he isn’t shipping more—then robots haven’t increase productivity Alex admits that inventory does increase and orders aren’t shipped on time

The Goal Chapters Chapter 4 Alex asks Jonah what is wrong with his plant Jonah asks Alex to define “productivity” Alex states that productivity is to accomplish something in terms of goals Jonah suggest productivity as a means of attaining a goal—Alex says this is common sense

The Goal Chapters Chapter 4 Jonah tells Alex that productivity is meaningless except in light of the company’s goal But Alex can’t think of the goal because he lacks common sense and his thinking process is weak Jonah leaves Alex at the airport to think about what the goal is

The Goal Chapters Chapter 5 “It’s a Good Cigar,” But Beer will help you Attain your Goals Chapter 6 Measurements Chapter 7 2 Decisions

The Goal Chapters Chapter 5 Alex finds himself in a crisis situation where at a meeting all are talking with numbers and words that are meaningless to him Alex must address the crisis situation

The Goal Addressing The Crisis Situation Take a half day off of work Go for a drive Chow down on some pizza, taco chips, beer nuts, and pretzels Drink a 6-pack or case of beer Spy on your plant as you contemplate all the things that are wrong with your plant

The Goal Chapters Cost Effective Purchasing To Supply Jobs Produce Products (Alex’s personal favorite) Quality Quality & Efficiency So What is that Darn Elusive Goal?

The Goal Chapters Technology So What is that Darn Elusive Goal? Sales; then Market Share; then Money; or Making Money)!!!

The Goal Chapters Chapter 6 Alex returns to the plant via back door Sees 3 workers sitting idle, tells their supervisor (though he has just had a 6 ½ hour break himself) Alex stumbles on thought; “Maybe people working doesn’t equate to making money”

The Goal Chapters Chapter 6 Alex ( though somewhat intoxicated) discusses with Lou potential ways of “measuring” the success of making money Alex and Lou derive 3 measurements

The Goal Chapters Chapter 6 Three Measurements Lou & Alex come up with:  Net Profit  ROI  Cash Flow

The Goal Chapters Chapter 6 Alex gives a profile of Eddie who is Second Shift Supervisor: Someone who walks the “straight & narrow (a trait Alex doesn’t like because Eddie probably wont ever have a beer with him) Eddie’s world at plant is too simple for ROI, Net Profit, and Cash flow measurements

The Goal Chapters Chapter 7 Alex gets home late Daughter shows him her report card— “She’s getting A’s while he’s flunking business” Decides 2 things: 1.To do what he can in 3 months to help the plant 2.To get a hold of Jonah again

Mr. Rogo’s Guide to Managerial Success Before leaving for work ignore wife and children. Pizza, beer, lack of sleep and skipping corporate meetings provides increased mental capabilities Sleep in until eleven at your mothers. Lie to your subordinates regarding your whereabouts.

Mr. Rogo’s Guide to Managerial Success Patronize your mother. Return home glad that your wife is gone because you don’t have time to explain. Realize that the goal of the company is to make money. DUH!! Realize that your productive robots have caused you more money than they are worth.

Realities of managerial approach New Definitions of Throughput, Inventory and Operational expense. Throughput is the rate at which the system generates money through sales. Inventory is all the money that the system has invested in purchasing things which it intends to sell. Operational Expense is all the money that the system spends in order to turn inventory into throughput

Questions What is the goal? What are the three measurements? What falls into the category of operational expense? What is classified as inventory? What is throughput? What real outside and inside pressures does Alex face?