Zhou
The Han Goal Write Up
The Goal is essentially a business process management textbook disguised as a novel. It
incorporates elements often seen in a novel with the important elements we need to know in order to run
an efficient firm/factory that maximizes profit and efficiency, and there are much valuable methods of
logistics to be learned from this novel.
The beginning chapters of this book strike us with a fundamental tenet of business that many
ignore or overlook. As Jonah puts it: the ultimate goal of a business is to make money, hence the title of
this book. Inside businesses one may often look at specific elements without incorporating them into the
bigger picture. In the book for example, Alex Rogo initially was struggling to find the answers for his
troubles as he was reflecting on the certain parts that need improvements on. Is the goal to improve
efficiency? Should he lay people off to save costs, or should he have increased the research and
technology quality? He soon learned that he had to do what it takes to make money and not get obsessed
with certain quality improvements without benefiting the bigger picture. Anything that gets you to make
money is an improvement. I believe that was the foundation philosophy of this book, and everything else
involved in a business(in this book and in real life) should be based on this recognition.
Further along the book we encounter the issue of bottlenecks. I believe that the book provides a
salient description of the bottleneck issue. The book gives the childrens match game as an introductory
example of how one source of inefficiency can drag the entire process. The number of matches a child
could move had to depend on what the child before him rolled(dice). In real life managers must be
constantly reminded that the inefficiencies caused by a bottleneck in the production process affects not
only a few minutes associated with itself, but rather it slows down the entire process and causes big
statistical fluctuations since each step is dependent upon prior processes. An statistical example further
along the book is shown by Jonah in which he points out that if your bottlenecks are not right, you
havent just lost $32 or $21. The true cost is the cost of an hour of the system, and thats twenty seven
hundred dollars. (pg. 159 of the second revised edition)
However, we often drift into the misconception that a bottleneck is completely bad. Yet in the
book Jonah states that bottlenecks can decrease excess inventories and even goes as far to say that every
manufacturer should have a bottleneck. This is because, as shown by Jonah, a successful manufacturer
needs to cut down on operation costs and inventories increasing while its throughput. In reflection, the
criteria of a bottlenecks capacity should be that it is to be increased to meet the demand, but at the same
time not become overheated so that it leaves excess inventories as a burden.
There are three main important things we should take away from Jonahs advice. Firstly
bottlenecks should be placed after the quality control. This can solve the issue in which bottlenecks are
put to work on the already defective parts, which render junks to be produced and costs and time wasted,
only to be checked at a later time by the quality control. This may seem like a minute detail but when one
takes into account the time costs saved by such a little change it is truly fantastic. Secondly, Rogo decided
to prioritize the overdue orders by making bottleneck workers work on them. Setting up priorities is like
using the division of labor to conduct productions and allows different things to be done at the same time.
Thirdly, and probably most importantly, Jonah adviced more machines to be placed on the bottleneck to
increase capacity. The machines were old since this could be used to reduce costs and save downtime.
Reducing the batch size is another important thing that Mr. Jonah has taught us. Large batch sizes
are burdensome and increase inventory as well as lead time. Reducing the batch size brings about a
domino effect in which the time it takes to process will also be reduced by half, which leads to half the
idle time as well. Therefore reducing batch sizes is often imperative in increasing efficiency.
As Alexs life and career turns around he soon makes a theory over how to best manipulate and
solve the issue involving restraints. The main stake is at step 2 and 3. In which Alex outlines the need to
use all available resources to tackle the restraint in order to crack a bottleneck, for they are the central
pieces of the puzzle. The need to guard against inertia is also important, for the resistense to change can
often itself cause a bottleneck to form. I believe that this should be universally applicable to all
organizations.
Alex later tells the sales department to not promise new orders for four weeks as opposed to the
two weeks needed previously, while simultaneously increase the inventories in front of the bottlenecks.
This was made to solve the new bottlenecks caused by the new orders.
In conclusion, despite all the advanced methods and metrics that can be used to increase profit, it
is ultimately up to the manager to be on the constant lookout for potential changes and improvements to
better maximize the earning potential of the organization. Only so can one create and sustain a successful
organization.