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The Goal

 

Alex answers that there has been a thirty-six percent improvement in one area. Jonah then asks if the plant is making thirty-six percent more money because the plant is using these robots. Well, of course not is the response Alex gives him. Just the one department is producing thirty-six percent more. Jonah continues the conversation and admits that he has been studying manufacturing processes. He asks Alex what productivity is and ends up explaining that true productivity is accomplishing something in terms of your goal. Alex cannot even determine the goal of his company. Jonah tells him to think about it and he leaves to catch his flight. .
             Back at the meeting, Alex hears talk about measurements of efficiencies, productivity, and cost per price, etc. He is not even sure what productivity is, so he decides to leave the meeting early and head back to the plant. He spends the entire afternoon thinking about "the goal" and finally comes up with an answer for Jonah. Alex states that the goal of the company is to make money, and everything else they do is a means of achieving the goal. .
             Once Alex figures out what the goal of UniCo or any other business is for that matter, he decides to get a hold of Jonah to learn more about productivity measurements. Alex spends the night at his mother's house trying to contact Jonah. Alex finally gets a hold of Jonah at 2 a.m. Jonah explains to Alex that an action towards the goal is productive, and an action away from the goal is an unproductive action. He also gives Alex three new measurements: Throughput, the rate at which the system generates money through sales. Inventory, all the money that the system invested in purchasing those things which it intends to sell. And finally, Operational Expense, all the money the system spends in order to turn the inputs into throughputs. In order to make money, Alex must increase throughput while concurrently reducing the inventory and operating expense.


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