The Goal Chapters 1 - 10

1. The GoalChapters 1 - 10

2. Characters • Alex Rogo—Plant Manager • Julie – His wife • Bill Peach—Division Vice-President • Bucky Burnside—President of one of UniCo’s biggest customers • Bob Donavan—Production Manager The Goal

3. The GoalChapters 1 - 2 • The Dilemma Alex Walks Into • Order 41427 • Peach’s News & Ultimatum • Problem with the NCX-10 Machine • Cost of Filling Order 41427 • Tony Quitting • Repair of the NCX-10 • Overtime

4. Alex Tries to Reason with What’s Wrong • Competition • ???????? The Goal

5. The GoalChapters 3 - 4 • Chapter 3 • Alex Rogo hears the news that the division will shut down within 3 months on his way to a meeting at the headquarters of UniCo, From Selwin, one of Peacher’s staff • The meeting is about how to increase productivity because the company’s sales decrease and inventory cost increase

6. The GoalChapters 3 - 4 • Chapter 3 • During the meeting, Alex can’t pay attention • Reaching into his jacket to get a pen, Alex finds a cigar that reminds him of Jonah

7. The GoalChapters 3 - 4 • Chapter 4 • Two weeks ago, on his way to the manufacturer’s association to talk about industrial robots, Alex meets Jonah, a former physicist teacher • Alex brags about how robots have increased productivity, but Jonah challenges this concept

8. The GoalChapters 3 - 4 • Chapter 4 • Jonah tells Alex if inventories haven’t gone down, employee expense hasn’t gone down and if the company isn’t selling more products, he isn’t shipping more—then robots haven’t increase productivity • Alex admits that inventory does increase and orders aren’t shipped on time

9. The GoalChapters 3 - 4 • Chapter 4 • Alex asks Jonah what is wrong with his plant • Jonah asks Alex to define “productivity” • Alex states that productivity is to accomplish something in terms of goals • Jonah suggest productivity as a means of attaining a goal—Alex says this is common sense

10. The GoalChapters 3 - 4 • Chapter 4 • Jonah tells Alex that productivity is meaningless except in light of the company’s goal • But Alex can’t think of the goal because he lacks common sense and his thinking process is weak • Jonah leaves Alex at the airport to think about what the goal is

11. The GoalChapters 5 - 7 Chapter 5 “It’s a Good Cigar,” But Beer will help you Attain your Goals Chapter 6 Measurements Chapter 7 2 Decisions

12. The GoalChapters 5 - 7 • Chapter 5 • Alex finds himself in a crisis situation where at a meeting all are talking with numbers and words that are meaningless to him • Alex must address the crisis situation

13. Addressing The Crisis Situation • Take a half day off of work • Go for a drive • Chow down on some pizza, taco chips, beer nuts, and pretzels • Drink a 6-pack or case of beer • Spy on your plant as you contemplate all the things that are wrong with your plant The Goal

14. The GoalChapters 5 - 7 So What is that Darn Elusive Goal? • Cost Effective Purchasing • To Supply Jobs • Produce Products (Alex’s personal favorite) • Quality • Quality & Efficiency

15. The GoalChapters 5 - 7 So What is that Darn Elusive Goal? • Technology • Sales; then • Market Share; then • Money; or Making Money)!!!

16. The GoalChapters 5 - 7 Chapter 6 • Alex returns to the plant via back door • Sees 3 workers sitting idle, tells their supervisor (though he has just had a 6 ½ hour break himself) • Alex stumbles on thought; “Maybe people working doesn’t equate to making money”

17. The GoalChapters 5 - 7 Chapter 6 • Alex ( though somewhat intoxicated) discusses with Lou potential ways of “measuring” the success of making money • Alex and Lou derive 3 measurements

18. The GoalChapters 5 - 7 Chapter 6 • Three Measurements Lou & Alex come up with: • Net Profit • ROI • Cash Flow

19. The GoalChapters 5 - 7 Chapter 6 • Alex gives a profile of Eddie who is Second Shift Supervisor: • Someone who walks the “straight & narrow (a trait Alex doesn’t like because Eddie probably wont ever have a beer with him) • Eddie’s world at plant is too simple for ROI, Net Profit, and Cash flow measurements

20. The GoalChapters 5 - 7 Chapter 7 • Alex gets home late • Daughter shows him her report card— “She’s getting A’s while he’s flunking business” • Decides 2 things: • To do what he can in 3 months to help the plant • To get a hold of Jonah again

21. Mr. Rogo’s Guide to Managerial Success Before leaving for work ignore wife and children. Pizza, beer, lack of sleep and skipping corporate meetings provides increased mental capabilities Sleep in until eleven at your mothers. Lie to your subordinates regarding your whereabouts.

22. Mr. Rogo’s Guide to Managerial Success • Patronize your mother. • Return home glad that your wife is gone because you don’t have time to explain. • Realize that the goal of the company is to make money. DUH!! • Realize that your productive robots have caused you more money than they are worth.

23. Realities of managerial approach • New Definitions of Throughput, Inventory and Operational expense. • Throughput is the rate at which the system generates money through sales. • Inventory is all the money that the system has invested in purchasing things which it intends to sell. • Operational Expense is all the money that the system spends in order to turn inventory into throughput

24. Questions • What is the goal? • What are the three measurements? • What falls into the category of operational expense? • What is classified as inventory? • What is throughput? • What real outside and inside pressures does Alex face?