The Goal: A Process of Ongoing Improvement: Chapter 38 Summary & Analysis

Alex picks Ralph and Lou up early in the morning and drives to headquarters, calculating in his head how he will make his appeal. When they meet Johnny Jons, Jons introduces them to Dick Pashky, his best marketer. Alex explains that he has 20 percent more capacity in his plant and wants 20 percent more sales—10 million dollars’ worth. Johnny Jons laughs at him and explains he’s already making all the sales that he possibly can. He does have French clients who want to buy from them, but the prices they are asking for is far too low.

Alex and Lou think a moment, then tell Jons they can produce products for the French at 10 percent less than their production costs. Johns doesn’t understand how it could work but tells Dick to bring the paperwork—he’ll hear Alex and Lou out. After spending several hours calculating costs, Alex tells Jons that he wants to use this deal to break into the European market. On top of the price, he says Jons should guarantee that they’ll deliver their products within three weeks. Jons thinks they’re crazy, but when they prove their math, he agrees. On the way home, Lou calculates that the plant will make a seven-figure profit. They are all thrilled. Despite his excitement, Alex still feels that he has so much to learn if he is going to run the entire division.

Alex remembers Julie’s point that Jonah is a scientist and Ralph’s mention of Mendeleev. He wonders again if there isn’t some hidden connection between science and business. At the plant, everyone is busy preparing for the French contract except for him. Now that things are running smoothly, he has nothing to do. He misses the activity, the sense of being needed. With nothing better to do, Alex decides to go to the library and read some science books, starting with Newton, to see if there is anything to learn.

That evening, Alex and Julie drink tea together and Julie tells him more about Socrates. Alex tells her about the physics books he read, which didn’t relate directly to business but revealed something about the way scientists operate: rather than collecting massive amounts of data, scientists look for simple if-then relationships between phenomena and slowly piece together all of the interconnections in the material world. Julie remarks that this is like how Socrates studies human behavior. Alex guesses that this is also how Jonah develops his ideas—by using this “thinking process” to find unusual relationships between things and people. However, Alex is not sure what to do with this realization.