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The Goal by Eliyahu Goldratt

“The Goal” (of a manufacturing company) – to make money; everything else is a means to achieving the goal (i.e. produce products to make money)

Reworded: Thegoal is to increase net profit, while simultaneously increasing both ROI and cash flow

Measurements which express the Goal (pgs 60-61):

1. Throughput – the rate at which the system generatesmoney through sales
2. Inventory – all the money that the system has invested in purchasing things which it intends to sell
3. Operational Expense – all the money the system spends in order toturn inventory into throughput

*Ideal Situation ( Throughput increases simultaneously with decreasing Inventory and O.E.

Two phenomena in a plant (pgs 87-88):

1. Dependent Events – anevent or a series of events must take place before another can begin…the subsequent event depends upon the ones prior to it
2. Statistical Fluctuations – when information changes from one instance tothe next

Two types of plant resources (pgs 138-139):

1. Bottleneck Resource – any resource whose capacity is equal to or less than the demand placed upon it
2. Non-bottleneck Resource –any resource whose capacity is greater than the demand placed on it

*BALANCE FLOW, NOT CAPACITY ( make flow through a bottleneck equal (a little less than) to market demand

“The capacity of theplant is equal to the capacity of its bottlenecks.”

To optimize bottlenecks, you must (pgs 158-159):

1. Make sure bottleneck time is not wasted
a. Sitting idle during lunchb. Working on defective parts
c. Work only on the parts you need
2. Take the load off of bottlenecks and give it to non-bottlenecks
a. Outsource to another company
b.Other machines can do it

“A plant in which everyone is working all the time is very inefficient.” (pg. 205)

Four elements of time a material spends in a plant (pgs 231-232):
1. Setup
2....
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