By:-

 Srishti Mehra – 61

 Dishita Modi – 71

 Shreya Sanil – 91

 Neeli Shah – 101

 Nikita Sheth - 106

 Payal Tachak– 111

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 also written a lot of various books such as:
1. Production The Toc Way
2. It’s 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”
 It’s a different type of management book.

 It has reached a sale of eight million copies.

 This book is in effect a disquisition on

production management, in which the author has
expounds the theory of constraints.

 This book is in the form of a novel as

suspenseful as a thriller and equally fast-paced.
 The Author has used the Socratic inductive
reasoning to teach his Theory Of Constraints.

 It is a business textbook written in the novel-

form, disguised as a love story.

 It is an underground best seller that utilizes a

non-traditional approach to convey important
business information.
 This book underscores Dr. Eliyahu Goldratt’s
Theory of Constraints, an overall framework for
helping businesses determine:
1. What to change – what is the leverage point.
2. What to change to – what are the simple practical
solutions.
3. How to cause the change – overcoming the
inherent resistance to change.
 The book is also about global principles of
manufacturing.
 Dr. Goldratt’s ideas are surprisingly applicable
in manufacturing and service organizations.
 From this book one can in improving
organizational effectiveness and productivity,
free up capital tied up in excess inventory,
reduce customer frustration and organizational
anxiety.
 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
 ALEX’S 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
 Alex and Lou identify three fundamental
decision issues as critical to the success of any
manager:
1. Knowing what to change.
2. What to change to.
3. How to cause the change.
 Conclusion

 Dr. Eliyahu Goldratt states,

“Production is the heart of industry.
Industry is the heart of a nation’s
wealth” and concluding he hopes that
his book and theories help in
strengthening it.