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Want to increase your personal output, or the output of your team? Do you feel like there’s a bottleneck constraining you? Have you tried brute force effort with little results? The Goal: A Process of Ongoing Improvement, by Eliyahu Goldratt, is a classic management book, on Jeff Bezos’s shortlist of books recommended to his senior Amazon managers. This book introduced the Theory of Constraints, which identifies the constraint in a production system and restructures the organization around it.
It upended traditional obsessions with cost efficiency to focus on what really matters. Unique among management books, The Goal is written in the form of a novel, detailing a plant manager’s journey to save his factory from closing. The story itself is entertaining and teaches in a Socratic way, helping you identify and overcome your own constraints. In this book summary of The Goal, you’ll learn • Why optimizing activities that seem productive can be pointless • How to identify your personal bottleneck • How to increase capacity at your bottleneck to increase output • How to apply these manufacturing principles to your everyday life. Thank you! I just sent you an email – check your inbox now to confirm getting free PDF summaries. Download your PDF here: Preface Goldratt’s The Goal concerns a manufacturing plant, and its lessons on throughput and inventory can be easily applied to literal analogues of this, such as supply chain, manufacturing, and automation problems. It takes a bit more thinking to apply it to knowledge work or larger projects, but the principles are generalizable.
To really get the most out of this The Goal book summary, think constantly about how you can apply it to your own situation – whether that’s closing sales clients, creating software products, managing a team, or writing books. Take the advice of: view yourself top-down as a machine, digesting inputs and creating outputs. From this perspective, you’ll be capable of studying and optimizing yourself. Table of Contents • • • • • • • • 1-Page Book Summary of The Goal • Productivity is defined as bringing you closer to your goal.
Every action that brings you closer to your goal is productive. Every action that does not bring you closer is not productive, even if it seems so.
• The Goal of every business is to make money. Likewise, activities that do not bring you closer to making money are not productive.
• Beware of defining subgoals that do not really drive toward the Goal, like production efficiency, team size, money raised, etc. • Organizations can be measured by 3 metrics: Throughput, Inventory, and Operational Expense. • Throughput: the rate at which the system generates money through sales • Inventory: all the money system has invested in purchasing things it intends to sell • Operational expense: all the money the system spends to turn inventory into throughput • Ideally, your activities improve all three at once. • Many companies focus primarily on decreasing operating expense, which can lead to unproductive behaviors that stifle throughput. Instead, switch your mindset to increasing throughput.
• The bottleneck of the system determines the throughput of the entire system. • By definition, the throughput of the system cannot be greater than the capacity of the bottleneck. Where is the weakest link in the chain? • This means the value of an hour lost at the bottleneck is equal to the value of the entire system. Even if a bottleneck costs $5/hour to run, if the factory is producing $1000 of goods per hour, then an hour of the bottleneck idling is costing $1000/hour. • Constraints can be equipment, people, or policies.