The Critique of the Basic Provisions of The Goal: the Process of Ongoing Improvement
The Goal: the Process of Ongoing Improvement (2004) by Eliyahu M. Goldratt is a universal novel. Despite the fact that it describes the activities of a specific plant and relationships within a particular family, it reveals the general rules of searching for a goal in any phenomenon. However, even though the book answers most of the questions being set, there is something that remains between the lines, and the reader can understand and interpret it in his/her particular way. The author also leaves some ideas without the detailed explanation so that the readers can make their conclusions. However, it should be noted that, while reading the book, the objections to Goldratts propositions arise, which, supposedly, is a result of the development and formation of personal view on things under discussion. Thus, it can be stated that the author does not intend to make the reader blindly heed to his thoughts. I think it is just the opposite the aim of this novel is to develop the readers ability to think and analyze. The author does not necessarily provide the audience with the answers, but instead he gives a topic to consider. Therefore, I agree with some provisions of The Goal, but disagree with the others. From the personal perspective, I was interested in the question of the organizations goal (in this case the plant) and the methods of assessing this goal.
To begin with, it should be noted that the book is valuable primarily for its principal message, which is revealed by the author only at the end We should and can be our own Jonahs. (Goldratt 343). It means that, while searching for answers, we should ask questions to ourselves first and, basing on the responses, make steps toward the goal. Goldratt speaks directly about this message, even if he leads the reader to it throughout the book. I considered two more important messages that seem to be hidden by the author.
Firstly, it is the importance of contemplation; no matter in what aspect of life a person has problems, whether it is business management or anything else, it is useful to observe the surrounding environment and people, in general. The processes and phenomena are similar among themselves, and hence an answer can be found even in the most unexpected place. Specifically, Goldratt demonstrates this idea by the example of Alexs hiking with children. Secondly, the author knowingly creates many conversations, which make Alex draw useful conclusions not only from his reflections and the conversation with Jonah, but also when discussing problems with his employees. Such approach to problem-solving not only demonstrates the importance of well-coordinated work and cooperation among the employees and management, but also is a confirmation of the statement that a dispute creates the truth. Therefore, in an attempt to solve the problem and come to a sound conclusion, there is the need to discuss it with someone.
As for the goal of the industrial organization being perceived by the author as making money, my thoughts regarding the issue are contradictory. On the one hand, I agree with Goldratt that the real productivity is demonstrated not by the efficiency of machines and constant workload of employees, but by the actual profits made. On the other hand, the author determines the organizations goal only as a quantitative indicator. Therefore, the question arises: What about the other important elements being crucial for the companys success, such as the image of the company, its reputation, production quality as well as the creation of a super product that has no analogues?
It may be argued that the creation of the image and reputation of the organization as well as the production of the product, good or service that is better than those of the competitors is just a way to achieve a primary goal making money. However, I believe that such assumption is not unambiguously correct. There exist many companies in the markets different segments, which, for example, steadily produce mass products consistently making money, but they are not the considered the best in their field. Often, the customers purchase the products of such companies because they are cheap or choose what to buy unconsciously. In this case, even the companies providing low-quality goods move toward the goal, which was defined by Goldratt, and manage to stay afloat.
At the same time, there are organizations that care about their image and reputation not only to make money, but in line with making money. There are those that focus on creating the best quality products in their particular spheres not only to get benefits, but also to contribute to the progress, as well as to create heritage. Such organizations do it because high status, brand name and being in the first place are important to them for the prestige and leaving a mark in the history. As a rule, these are the world-renowned brands. However, it should be also noted that, in the beginning, many of them strived to create the image or improved manufactured products as a means of making money; but, with time, the maintenance of the reputation, loyalty to the customers and creation of innovative products became separate objectives of the companies policies on par with gaining profit.
According to the author, measurements which express the goal of making money perfectly well, but which also permit you to develop operational rules for running your plant are throughput, inventory and operational expense. (Goldratt 66). Goldratt further continues, if you want to change one of them, you will have to change at least one of the others as well. (66). In his view, organizations goal is to increase throughput while simultaneously reducing both inventory and operating expense. (Goldratt 73). Thus, basing on these arguments, throughput is the money coming in. (Goldratt 79); Investment is the same thing as inventory, (Goldratt 81) and any money weve lost is operational expense. (Goldratt 81). I agree with this formulation of the organization's goal only partly. Rather, such approach is justified if the organization has reached a certain level of development and now may slightly relax. I mean that the organization has reached a stable income, regular orders, and its products are competitive. Then it can go with the flow for some time, minimizing the costs, and paying money for essentials. However, if the market is fluctuating, this period will not last long.
I believe that there are many factors that require defining the goal differently. One of these factors is competition. When a company is a monopolist in the market, and its goods are demanded, it does not have an urgent need to force own development nor does it require large cash investments for quantitative and qualitative growth of the production line in the short term. People continue buying its products, and the company clearly establishes its manufacturing system, trying to spend less on raw materials and get more revenue from the sales by increasing the price of goods, for example.
However, when the competing companies appear on the market, the goal changes. The company is compelled to start investing more in new equipment, labor resources, and the best raw materials to quantitatively and/or qualitatively increase production. With this approach, ultimately, customers will choose the products of a better quality. Profits will grow. Therefore, in this case, if the company wants to have more income, respectively, it needs to invest more. In addition to the competition, the company may face such issues as low demand or being not known in the market. Thus, to gain its market share, it is necessary to invest. Therefore, I think that the organizations goal is increasing throughput while simultaneously increasing both inventory and operating expenses under the condition that the first will always be higher.
The novel The Goal: the Process of Ongoing Improvement is particularly interesting due to its thought-provoking style. The above critique of the books basic provisions only proves that the author does not impose his point of view but generates the discussion. Everyone can take something useful from the book not only in the sphere of industrial organizations management. Despite the fact that it describes the experience of a factory manager, it shows that, in any undertaking, there are similar principles of goal setting. Therefore, the novel can be recommended not only for the course or studying, but also it can be a developing and educating experience in terms of goal setting and achievement.