"The Goal" is a business novel by Eliyahu M. Goldratt and co-authored by Jeff Cox. The story follows the protagonist Alex Rogo, the manager of a UniCo manufacturing plant as he struggles to save his factory from being shut down. We enter the story as Al's boss, Bill Peach, storms into the plant one morning and demands to know the status of a specific order that has yet to be delivered. Bill demands that the plant workers drop their current projects and finish the order immediately. As a result, he angers a union worker who winds up quitting, but only after accidentally damaging a special machine needed to produce the required part for the order. What is the cause for this upset? UniCo is hemorrhaging money, orders are being shipped weeks or months behinds schedule, and quite frankly, the company is failing. Bill gives Al three months to turn his plant around or else it will be shut down.
Just two weeks before, all is well in Al's mind. He is en route to Houston to speak at a conference about the benefits of robotics in his manufacturing plant. The chairman of the board, Mr. Granby, even wants to stop by the plant to take pictures with the new robots. While waiting to catch his flight, Al has a chance meeting with Jonah, a physicist under whom Al studied mathematical models as a student. Al tries to start a conversation, mentioning the success of the new robots in his plant. They increased productivity by thirty-six percent! Jonah is unimpressed, though. He asks Al if the new robots caused the plant to make thirty-six percent more money. They do not; the productivity increase was just in one department. He asks if the plant was able to ship more orders, decrease employees, or decrease inventories. The robots failed to do any of that, so Jonah infers that the robots have not actually increased productivity, and that Al's plant is always late with orders and has inventory through the roof. Al is amazed that Jonah could deduce so much from what little information he was given, and asks Jonah for advice. Jonah informs Al that in every business, there is only one goal, and asks Al to think it through.
When Al is faced with the challenge of saving his plant, he recalls his discussion with Jonah and ponders what the goal really is. Is it to produce more? Is it to maximize the market share, increase quality or purchase more efficiently? No, it's much simpler. The goal of any business is to make money. How can he tell if UniCo is making money, though? Al brings his inquiry to Lou, an accountant for UniCo, and they decide that in order to make money, they would need to increase net profit, while simultaneously increasing return on investment, and simultaneously increasing cash flow. Al may be able to get an explanation from the accountants as to what that means, but if he were to confront workers on the plant floor about increasing return on investment or cash flow or net profit, they could not see the direct correlation to their job. Al spends a late night trying to get in touch with Jonah again to get his opinion on the matter.
Jonah explains making money using measurements that he names throughput, inventory and operational expense. He defines throughput as the rate at which the system generates money through sales, inventory as all the money that the system has invested in purchasing things which it plans to sell, and operational expense as the money that the system spends in order to turn inventory into throughput. In order to increase productivity, Al's plant needs to increase throughput while decreasing inventory and operational expense.
After analyzing the addition of the robots to the plant according to Jonah's measurements of productivity, Al realizes that the robots have actually hurt the plant rather than helped it. Since the company acquired the robots, there was no increase whatsoever in sales, and thus there was no increased throughput. In order to keep up efficiencies on the robots, they were set to work producing more and more parts. As a result, inventories sky-rocketed. The parts that were produced were not immediately needed, and as such the business had to store them, which increased operational expenses.
In terms of working with groups, Al's greatest challenge thus far has been communicating the plant's goal with the factory workers. On one unexpected trip through the plant, he encounters three workers just standing around reading a newspaper. He informs their superior that he needs to get them working or he will move them to another area. Soon enough the workers are set to task, moving materials from one part of the plant to another. Is that really necessary, though? Sure, they may be working, but they are not being put to work that is actually productive.
Al has not appeared to encounter many issues with maintaining the hierarchy within the plant, but does appear to have some issues with his superiors. While he stressed about dealing with his plant's failure, he decided that the meeting he had with Bill Peach and managers of other UniCo plants was pointless. He would gain no new insight by examining the efficiencies of the failing company. Instead, he fled the meeting during a break to reflect on his own. Al may have reached a better conclusion by dealing with the issue on his own, but was disrespectful to his superiors and co-workers in the process. As a result, Al had to deal with some very angry calls from Bill Peach. Communication from Bill to Al digressed to little more than shouting matches, which proved to be fairly inefficient for working with the superiors within UniCo.
Outside of the factory, Al also faces a number of issues with his family. He is preoccupied with saving the factory and disregards his wife and children. His wife, Julie, does not like the area that they moved to for Al's job and is unhappy as a result. Al promises to take Julie out on the town, but something comes up. He promises to reschedule for the next night, and he forgets about that commitment as well. He is so preoccupied that he forgets to call home until ten at night to say that he will not be home for dinner. He struggles to communicate effectively with Julie, and she is often upset with him because of his absence and empty promises. Julie fails to understand why Al is upset about the potential loss of his plant, and possibly his job. While he is upset, she looks at it as a way out of the town she dislikes so much. Al clearly needs to communicate better with his family, and work on fulfilling his duties as a husband and father in order to resolve issues with Julie.
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