Analysis Of The Goal By Eliyahu M Goldratt

1. One key concept from The Goal by Eliyahu M. Goldratt was the Theory of Constraints. This theory stipulates that every firm has at least one factor or constraint that prevents them from achieving their goal – which is typically profit. The main constraints plaguing Alex Rogo’s factory were the bottlenecks. In this novel, Mr. Goldratt lists his five recommended steps for managing constraints. In order, the steps are: Step 1: Identify the system’s constraint - In this step, a manager must identify the constraint or restriction (usually very few constraints/ typically 1-2) that causes the entire process to slow down. Step 2: Decide how to exploit the constraint – Then the manager has to determine how to get the max benefit out of the …show more content…
Once this is achieved, find another way or process to get around the bottleneck. This was demonstrated in the book by the acquisition of the old processing machine. Step 5: If in this process a constraint is broken, go back to Step 1, but beware of inertia. Finally, once resolving the main constraint, a manager should observe the process and productivity of the firm to determine whether a new constraint has been created due to the changes made in previous steps. When a new constraint is found, a manager should start the Theory of Constraint steps again. A manager should always be looking for new constraints – inactivity or indifference can cause the firm to return to production …show more content…
In the pharmacy, many drugs require not only a prescription but also verification of blood testing from an external source. The bottleneck or constraint of waiting for the external source to send lab results in patients receiving medications later than expected and leads to inefficiencies when staff members are forced to spend unexpected time managing customer complaints. This is because the pharmacy prepares the drugs after confirmation is received creating a fluctuating workload. A solution here would be for the pharmacy to make the drugs once a prescription is received, and then sell it once the blood test results are received. Of course there are instances where the blood work would indicate that the prescription shouldn’t be sold, and restocked at a loss. To mitigate, the pharmacy should only make high volume low cost drugs before lab results are received. This situation is similar to when Mr. Rogo’s factory relocated quality assurance to before the