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The Goal

             The book, "The Goal," begins by first introducing us to Alex Rogo. Alex is the plant manager at a manufacturing plant. The plant is basically one large room filled with many machines. They are organized in blocks and the blocks are separated by aisles. The trouble begins when the division vice-president, Bill Peach makes an unexpected visit to the plant. He is there because a customer has complained about a late order. Peach goes on to explain to Alex that Alex's plant is not meeting its delivery times/schedules the way it should be. He claims that the future of the business depends on the plant's ability to increase productivity. Peach gives Alex three months in order to turn his plant around; otherwise he will be putting the plant up for review and try to get rid of it.
             While at a meeting with other plant and division managers, Alex remembers a meeting he once had with a man named Jonah. Alex was explaining how productive his plant was, but Jonah wasn't quite sure that this was really the way to be a successful plant. Jonah continues to tell Alex that he needs to know what the goal is. Without knowing the goal, one cannot understand the meaning of productivity. After some time of thinking on his own, Alex decided that the goal of the company is to make money. In talking with others in his plant, Alex is convinced this is the goal and begins to look at the measurements that lead to the company making money. He believes that in order to make money, a company must increase net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow. However, these measurements do not necessarily fit with the daily operations of a manufacturing organization. After making another call to Jonah, he figures out that the measurements for running his plant are: throughput, inventory, and operational expense. So, the way to express the goal would be to increase throughput while simultaneously reducing both inventory and operating expense.

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