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Chapter 8
Themes
Key
LitCharts assigns a color and icon to each theme in The Goal: A Process of Ongoing Improvement, which you can use to track the themes throughout the work.
The Importance of Goal-Setting
Working with Constraints
Ineffective vs. Effective Business Metrics
Efficiency vs. Optimization
The Cost of Corporate Success
Summary
Analysis
Alex wakes in his mother’s house at 11 a.m. He quickly calls Fran to tell her he’ll be at the plant soon. Fran tells Alex that there are several issues that need his attention: broken machines, a fight on the factory floor last night, and a message informing him that Granby will be shooting a promotional video about robots in Alex’s plant. Apparently, Granby’s communications people think that Granby will look best in front of Alex’s machines. Alex eats breakfast with his mother before leaving. His mother can sense that he is stressed and overwhelmed and encourages him to take better care of himself, no matter how bad things at work are.
The flurry of problems at the plant, all of which Alex must solve as the manager, demonstrates how stressful management can be. Alex’s mother recognizes that he needs to rest more, eat properly, and take better care of himself, indicating that the personal toll of Alex’s corporate career is plain to see. However, his mother’s advice to prioritize his personal health directly contradicts Alex’s habit of prioritizing work above all else.
Themes
As Alex drives to the plant, he thinks about Jonah’s new metrics—which aren’t so different from what he brainstormed with Lou—and how to apply them to the overall goal of making money. Alex decides the plant needs to increase its throughput while keeping operational expense and inventory as low as possible. He wonders if the robots further that goal, since they didn’t reduce the number of workers the plant employs. Instead, they just add to the operational expense. When Alex arrives at the plant, he asks Lou whether having the robots has increased their sales. They look through charts and data and realize that the installation of the robots correlates with a decrease in sales.
Using Jonah’s new metrics, Alex can immediately see that robots did not increase their throughput, demonstrating how simpler metrics can provide clearer insight into new developments. Although the robots represent the latest manufacturing technology, Alex realizes that they do not help the plant achieve its goal, suggesting that new technology may be counterproductive rather than productive—especially if used in the wrong way.
Themes
Alex decides they need to talk to Stacey Potazenik, their inventory control manager. When Alex asks her if the robots increased the inventory of unfinished products, Stacey tells him that of course they did, though she tried to stop it. When the robots first arrived, they only operated at 30 percent efficiency, since there was not always necessary work for them to do. Stacey knew that Ethan Frost would be furious about inefficient robots, so everyone decided to make the robots build spare parts so that they could always be running, increasing their efficiency. However, those parts often go unused, because the plant suddenly has shortages of other parts and can’t complete projects.
Stacey increases the robots’ on-paper efficiency by making them do unnecessary work, even though it creates excess inventory and ultimately wastes money, all to satisfy Ethan Frost and the corporate superiors. This suggests that because corporations use flawed traditional metrics, actions that are meant to increase productivity (like increasing individual efficiency) are instead counterproductive to the primary goal of making money.
Themes
Alex brings Bob Donovan into the conversation and asks him about the robots. Bob insists the robots are doing a good job but admits that inventory keeps increasing because the plant struggles to predict what parts it will need, so they build things that are never used. They often have a surplus of one thing and a shortage of another, which causes delays. Alex starts pacing the room and summarizing that although the robots are themselves efficient, they increase inventory, which costs money to store and move. They didn’t increase sales, so it appears that the robots are losing them money rather than making it. Alex exclaims that they “haven’t been managing according to the goal,” and he says that he has some new ideas to explain to them all.
Bob’s admission that inventory keeps rising because the plant can’t accurately predict what it will need demonstrates the logistical complexity of operating a manufacturing system. Under their current mode of operation, it is nearly impossible to keep a consistent flow of production moving. This complexity and Alex’s realization that the robots lose them money rather than make them more demonstrates the need for a clear guiding goal, which will help them organize their system and its priorities.
Themes
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