Introduction
The Goal is a work of fiction that illustrates how manufacturing plants should (and should not) operate in order to maximize the success of the business. The book is told from the perspective of the manager of a manufacturing plant of the UniCo Corporation, Alex Rogo. The plant has been in a constant state of chaos since before Alex became the manager six months ago, as have many (if not all) of the other UniCo plants. Orders are constantly behind schedule, which eventually leads to specific orders being expedited at the last-minute due to customer complaints. To make matters worse, due to the plant’s constantly erratic environment, Alex’s work also caused severe tension in his private life with his wife and children.
At the beginning of the book, Alex is visited by his superior, Bill Peach, who has received several customer complaints about one such order. Peach, after berating Alex’s employees about making sure this order was fulfilled by the end of the day, proceeds to inform Alex that he now had three months to turn the plant …show more content…
67). Alex then begins asking questions about whether labor should be included in inventory or operational expense, but Jonah’s answer just raised more questions. Jonah said that he decided to define inventory and operational expense the way that he did, because he felt that by not considering the value added to a product through labor, it eliminated the confusion of whether the money spent on that labor was an investment or an expense (Goldratt & Cox, 2004, p. 67). With that in mind, operational expense can be defined as the money flowing out of the system (Goldratt & Cox, 2004, p. 80), because it is referring to the money spent on labor, property rental, machine maintenance, etc. that are all required to operate the plant, which is turning raw materials and other goods into final goods to be
The Goal is a work of fiction that illustrates how manufacturing plants should (and should not) operate in order to maximize the success of the business. The book is told from the perspective of the manager of a manufacturing plant of the UniCo Corporation, Alex Rogo. The plant has been in a constant state of chaos since before Alex became the manager six months ago, as have many (if not all) of the other UniCo plants. Orders are constantly behind schedule, which eventually leads to specific orders being expedited at the last-minute due to customer complaints. To make matters worse, due to the plant’s constantly erratic environment, Alex’s work also caused severe tension in his private life with his wife and children.
At the beginning of the book, Alex is visited by his superior, Bill Peach, who has received several customer complaints about one such order. Peach, after berating Alex’s employees about making sure this order was fulfilled by the end of the day, proceeds to inform Alex that he now had three months to turn the plant …show more content…
67). Alex then begins asking questions about whether labor should be included in inventory or operational expense, but Jonah’s answer just raised more questions. Jonah said that he decided to define inventory and operational expense the way that he did, because he felt that by not considering the value added to a product through labor, it eliminated the confusion of whether the money spent on that labor was an investment or an expense (Goldratt & Cox, 2004, p. 67). With that in mind, operational expense can be defined as the money flowing out of the system (Goldratt & Cox, 2004, p. 80), because it is referring to the money spent on labor, property rental, machine maintenance, etc. that are all required to operate the plant, which is turning raw materials and other goods into final goods to be