Achieving the Goal
The Goal is a captivating novel by Eliyahu M. Goldratt that presents the reader with the best policies to applicable for the successful management of an industrial plant. Goldratt’s method of conveying the message is unique since the book revolves around Alex Rogo’s life, which has numerous challenges from work at the UniCo manufacturing plant and from family responsibilities. The UniWare division for which Rogo is the plant manager has been experiencing problems for over some time to a point that Granby the business owner considers closing the division within six months. This causes Bill Peach the division vice president, to pressurize Rogo for positive results within the next three months. The problem is that Rogo is not aware of what the problem is since the efficiencies of the plant are high, which he translates as a good sign.
Rogo also has a hard time balancing work and acting as a father and as a husband. This is notable in his frequent late home arrivals and the failure to meet the promises he makes to his wife. This results to frequent misunderstanding with his wife as well as increased worry as he tries to rectify the manufacturing plant. Goldratt (2004) uses a deductive method of teaching the principles of successfully running a manufacturing plant in this book. Jonah, who was previously Rogo’s teacher now works under the science of manufacturing organizations, could deduce that Rogo’s plant has problems even before Rogo could admit so. Jonah detected there was a problem by the way Rogo answered three questions; if they reduced payroll, if they reduced inventories and if they shipped more finished products as a result of robotics installation (Goldratt, 2004). Jonah’s three questions sparked Rogo’s search for an applicable solution for his plant. The workable solution starts with Rogo’s redefinition of what the plant’s overall goal is.
The novel uses Rogo’s day-to-day activities to explain the various applicable concepts that are necessary for a manufacturing plant to run successfully. The queue that Rogo, his son, and other children formed at a hike is symbolic of the concepts of throughput, inventory, operational expenses, dependent variables, and statistical variations (Goldratt, 2004). The imagery used to relate Jonah’s concepts to day-to-day activities makes them easier to understand. Jonah emphasizes that the goal or aim of a company is to increase throughput while concurrently reducing operational costs and inventory (Goldratt, 2004). Throughput is the frequency at which a system generates money through sales, and not production. If goods are processed and stored without selling, there is no throughput (Goldratt, 2004). Inventory is the total amount of money the system has invested in purchases for manufacture and conversion to throughput via sales (Goldratt, 2004). Operational Cost is the total amount of money that the system employs to turn inventory to throughput. An increase in throughput translates to an increase in the money for a company (Goldratt, 2004).
Consultation is important of running a plant successfully. Rogo consults with Jonah on a frequent basis especially when he needs confirmation or help with a problem. Jonah is the best person to consult since he understands the problems on Rogo’s plant better, and he is able to offer workable solutions. Jonah does not give Rogo direct answers to the problems, he believes that Rogo has the ability to solve the problems and he wants Rogo to think through the possible solutions to the plants problems so that Rogo can apply them with ease as opposed to receiving solutions that one does not understand. It is important that Rogo thinks through Jonah’s recommendations since he needs to change some definitions that he learnt at school as well as to employ different measurements to determine the success of a manufacturing plant. Teamwork is also an important part of establishing the problems in a business. It is though a meeting with Lou the accountant, Donovan the production manager, and Potazenik the inventory controller, that Rogo is able to comprehend the manufacturing plant’s problem (Goldratt, 2004). Rogo also needs their support in coming up with solutions as well as to support the recommended solutions.
The invention of Automated Teller Machines (ATMs) made it easier to access money and assisted in reducing queues at banking halls. Banks make a shopping convenient for customers by installing ATMs in supermarkets such that a customer does not have to go to the bank premises to withdraw money. There are many occasions that I needed to access an ATM late in the night or early in the morning, but it is not possible at a supermarket that is conveniently near home since it closes at night and opens at 8 a.m. in the morning.
ATMs can work for 24 hrs therefore, it does not limit the time that a customer needs to access money. The problem arises when an ATM is in a super market that does not operate for 24 hrs. The ATMs does not make money at night and a customer cannot access money once the supermarket is closed. The ATM’s time of functionality fully depends on when the supermarket is open for business. The goal of a business is to increase throughput while reducing operational costs and reducing inventory at the same time (Goldratt, 2004). In the case of the ATM, throughput are the withdrawals by customers, operational costs include the cost of renting the premises and Inventory is the cash within the ATM machine at all time. During the night, there is no throughput due to the supermarket closure, while the inventory and the operational expenses remain the same.
In order for an ATM to operate feasibly for 24hrs, the bank needs to carry out a feasibility research in order to be certain that the goal of making money is realistic. If the research confirms that an ATM can profitably function through the night, the bank will need to make steps towards the setup of a 24hr ATM at a different location or to collaborate with a business that operates for 24hrs such as a gas station. Depending on the research results, the bank can decide set up a new ATM at new location and leave the old one still in operation. The other alternative is to move the existing ATM from the supermarket to the new location. Either decision should get consideration so long as there is increase in throughput.
Once the new ATM setup is complete, the bank will need to inform its customers on the new change or addition so that can take advantage of the 24hr access to their money. In a case whereby the bank moves the ATM to a feasible location, the bank will change operational expenses payments from the supermarket to a new property owner. Once the ATM is available for 24hrs, there will be an increase in withdrawals, which translates to increased throughput. The increase in withdrawals during the night will reduce inventory over the night. Hence, the new ATM changes meet the banks goal by increasing throughput and reducing inventory.
The assumption is that the operational expenses remain constant. Other costs not mentioned are the costs of the ATM changes such of moving the ATM to a new location or setting up a new ATM at another location. The feasibility research should contain the details on the rent payable at the new location as well as the total expenses for the whole operation. The ATM changes are feasible if there is a high return of investment, when comparing the difference of operational expenses and the throughput of the ATM against the new money investing in the new change (capital).
Future of Motor Vehicles
Technology is changing very fast as time progresses. Some of the technological changes taking place are for the good of this planet earth and at the same time, they contribute towards solving our day-to-day problems. The motor vehicle industry is no exception to the need for technological change. I hope to buy a hybrid vehicle or a completely electric vehicle in future. The vehicles that use fossil fuels have contributed to the degradation of the environment through the release of toxic gases that damage the atmosphere (Knittel, 2012). Accidents at oil plants have also polluted water bodies and killed marine life. The other problem is that fossil fuel is a finite resource that will deplete at some time in the future. These problems led to the innovation and invention of hybrid and electric cars.
There is a growing demand for electric cars and hybrid cars due to their eco-friendly nature and their reduced reliance on fossil fuel (Knittel, 2012). Therefore, motor vehicle companies should proactively engage in the production of hybrid vehicles and electric vehicles to avoid redundancy in future and to conserve the environment. Hence, vehicle companies should engage in the productions of cost-friendly hybrid and electric vehicles since the demand is high (Golfen, 2008). Tapping into this demand, will make money for a motor vehicle company.
A company that wishes to take advantage of the increased demand for electric and hybrid vehicles will need capital to set up a new division or plant for the manufacture of the electric or hybrid engines. The vehicle company should do a feasibility study in advance, to establish the return on investment of the hybrid vehicle against the employed capital. The increasing demand for hybrid and electric vehicles is guarantee that throughput will be high while inventory will be decreasing at a high rate. The operational costs carry inventory, therefore a decrease in inventory will also reduce operational costs (Goldratt, 2004).
If the new plant/division has low operational expenses, a reducing inventory as the throughput increases, then it will definitely be making money for the motor vehicle company. In addition to making money from hybrid and electric vehicles, the company needs not to worry about future redundancy due to customer shift or the depletion of fossil fuels. Once fossil fuel vehicles are redundant the vehicle company can comfortably close the fossil fuel powered vehicles division or plant. A motor vehicle company would find itself in a very dire situation if most of the customer preferences shifted to electric and hybrid vehicles while a company still produces fossil fuel powered vehicles. This would result to reduced throughput since very few customers would buy the fossil fuel powered vehicles. There would be an increase in inventory since the fossil fuel powered cars in storage are not moving because of reduced throughput, and an increased inventory will increases operational expenses. The company’s operations will be stagnant and headed for closure since it is not meeting the company’s goal, which is to make money (Goldratt, 2004).
Playing video games is a favorite pass time activity for many people worldwide. Video game companies have been improving the visual graphics, the playability, interaction-ability, sound quality, and multiplayer-ability of video games. When a video game company improves some or all of the aspects of gaming, it has to manufacture new hardware to march the new changes and sell the new gaming console to the customers (Loftus, 2012). The upgrade of gaming hardware results to the abandonment of the old hardware by the market. The demand for the old hardware also drops drastically. The release of a new gaming console will also lead to the stagnation of the old consoles at retail shops.
Not unless one is a new gaming customer, the release of an upgraded gaming console to the market is a disaster to an old gamer. The upgraded consoles have better features but they do not support the functionalities and gadgets of the older gaming consoles, an example is the lack of support of optical discs manufactured for the older consoles. An old customer has to purchase a new console, new optical game discs, and new storage media in order to enjoy gaming. The upgrade of gaming consoles also affects the video game companies since they have to new employ equipment and software that will manufacture the new gaming console, which involves a huge capital outlay that increases a firm’s exposure to the risk of loss (Pallab, 2010). The video game companies might dump the resource(s) they used in developing the old console. Stock redundancy poses a risk if the new console gets to the market before the video company sells all the old consoles, which would result to an increased inventory.
The video game companies can avoid the additional expenses and increase throughput when doing upgrades for gaming consoles. A video game console has parts that are similar to those of a computer. The solution to the console upgrade problem is the development of gaming consoles that have upgradeable and detachable parts. This way the gaming company can concentrate on building the specific parts that need upgrading instead of rebuilding the whole console in times of upgrades. Hence, in the times of an upgrade of for instance an optical drive, the customer only needs to buy only the optical drive and not a new console. The old optical drive is detached from the console and the new optical drive attached. This action should be easy and convenient for the client to avoid installation costs on the side of the client.
A video game company that creates game consoles with detachable upgradeable parts will meet the goal of making money since operational expenses will reduce from the expenses of creating a new console, to the expenses of creating a specific console part or parts. The gaming company will need to employ less capital in creating parts as opposed to a resources overhaul that is required in creating a new console. The new console will also be redundant free, due to its upgradable parts hence, the inventory for the gaming consoles will reduce at a frequent and high rate. Throughput will increase due to console sales and upgradable parts sales to retailers who will not hesitate in stocking the gaming products in larger quantities. The old gamers will contribute to the throughput since the burden of purchasing new consoles is relieved from them and they only need to buy the upgradable parts. New gamers will also contribute to throughput since they can confidently purchase the game console without the fear of future redundancy.
Goldratt, Eliyahu (2004), The GOAL (3rd edition). North River Press, ISBN#: 0-88427-178-1
Golfen, Bob. (2008). Shoppers need to consider the extra cost of hybrids. Phoenix, Ariz. Retrieved from web:
Knittel ,C.R (2012). Reducing Petroleum Consumption from Transportation.
The Journal of Economic Perspectives. American Economic Association. Retrieved from web :< http://www.jstor.org/stable/41348808 >
Loftus, T. (2012). Top Video games May soon Cost More. NBCNews. Retrieved from web:
Pallab,d. (2010). How Much does it Cost to Develop a Video Game. Techie-Buzz. Retrieved from web: < http://techie-buzz.com/gaming/cost-develop-video-game.html>