WS One Analysis Ch 1-5 The Goal Oct 18, 2012 Operations Management

Analysis Ch 1-5

Chapter One Chapter one starts by allowing the reader to see the plant through the eyes of the manager, Mr. Alex Rogo. It is apparent that he has problems with production. This is revealed through a argument between Mr. Rogo and his boss Mr. Peach, the Division Vice President. The dispute is over an overdue order #41427. Through the commotion its learned that Mr. Peach will not settle for anything less than the order being shipped today, and since the plant is neither productive nor profitable, Alex has three months to show an improvement or the plant will be shut down. According to the text, operation consists of processes that convert input to output. Failure to manage these processes effectively will have a negative impact on the organization; which seem to be the problem in Mr. Rogo case.(Stevenson, 2012, p. 36) Chapter Two Alex depicts his home life. Since he moved back to his hometown six months ago, it seems as though his family is having a hard time adjusting. Its great for Alex, but its a big difference from the city life that his wife is used to. Mr. Rogos also reflects back on his travels in life to eventually find himself back where he started. "Hes now 38 years old and a crummy plant manager".(Goldratt & Cox, 2004, p. 20) The order #41427 does get shipped, but not very efficiently. In order to get the order out on time Donovan pulled workers from other departments in addition to the workers working overtime which is against the current division policy. This show that Mr. Rogo has a problem with efficiency because according to text efficiency pertains to getting the most out of a fixed set of resources.(Stevenson, 2012, p 62) Alex definitely was not getting the most out of his resources because he pulled worker from other department, which more than likely caused a domino effect within that department.

Analysis Ch 1-5

Chapter Three Alex and other managers are called to meeting with Mr. Peach and his staff at the company headquarters. At this meeting everybody finds out how bad things are and are given goals to achieve for the next quarter. Mr. Rogo finds out through the grapevine, perhaps why Mr. Peach has been acting so irrational lately, the Division has one year to improve or its going to be sold, along with Mr. Peach. In order for an organization to succeed, managers must know the organization goals and ensure that their subordinate know and accomplish these goals. According to text, The mission and goals often relate to how an organization wants to be perceived by the general public, and by its employees, suppliers and customers. Goals serve as the foundation of for the development of organization strategies. (Stevenson, 2012, p.44) Mr. Rogo realizes that the future of the company depends upon the managers to increase productivity. Now he just has to figure out how to do it. Chapter Four During this meeting, Alex thinks back on a recent business trip where he ran into an old physics professor, Jonah, at the airport. Jonah puzzles Alex with how well he knows how Alexs plant is doing. Jonah has no knowledge of where Alex work. Jonah predicts the problems of high inventories and not meeting shipping dates. He also states that there is only one goal for all companies, and anything that brings you closer to achieving it is productive and all other things are not productive. Alex wanted Jonah to tell him what the goal was. But Jonah refused. Instead he used The Effect-Cause-Effect Method - Goldratt defines the effect-cause-effect method as the process of speculating a cause for a given effect (hypothesis) and then predicting other effects from the same cause. Verifying each predicted effect builds a logical tree and provides a

Analysis Ch 1-5

powerful way to determine core problems.(Goldratt & Cox,2004) This method made Alex search and find the answer to his question within himself. Chapter Five Alex leaves the meeting at the break. He does not know where he is going; all he knows is that he has get out this meeting. He thought about what Jonah said to him at the Airport. Alex asked himself what is the real goal? He realized that in order to save the company, he needs to understand what the "goal" is. After a pizza and a six pack of beer it hits him, money. The "goal" is to make money and anything that brings us closer to it is productive and anything that doesnt isnt.(Goldratt & Cox, 2004, p. 40) Alex realized that the things he thought were goals, such as cost-effective purchasing, employing good people, selling good products, etc are essential to running a business successfully. But they are not the goals themselves, they are just the tools used to achieve the goal. Conclusion This paper analyzes chapters 1-5 of the Goal. It explains some key points in each chapter as they pertain to operation management. The information discuss in each chapter give a person a better understand of productivity, efficiency, goals, and the Cause and Effect Method. Understanding the information discussed in these chapters can he a person improve the overall success within his or organization.

Analysis Ch 1-5

References Eliyahu, G. (2004). The Goal: a process of ongoing improvement (20th ed.). Great Barrington: The North River Press. Stevenson, W. (2009). Operations Management: (10th ed.). New York: McGrawHill/Irvin.