The Goal by Eliyahu M. Goldratt: Three Key Concepts

The Goal
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Institution
The Goal
Introduction
Operational management is one of the most important functions in an organization. The Goal is a book by Eliyahu Goldratt and Jeff Cox that demonstrates the applicability of key concepts in operational management. The operational management concepts are presented through a fiction story featuring Alex Rogo as the main character, who is trying to turn around the fortunes of his production plant. Three important concepts brought up in the book are throughput, bottlenecks, and the theory of constraints. This essay examines these three concepts as they are presented in the book and utilizes them to devise a plan to improve the operations of Tesla.
Throughput
Throughput is one of the major concepts one encounters in the book. This is one of the measures to achieve the goal of making money and operational rules presented to Alex by Jonah through a telephone conversation (Goldratt & Cox, 2004). As described by Jonah, throughput is “the rate at which the system generates money through sales” (Goldratt & Cox, 2004 p.66). The word sales is emphasized to differentiate it from production. It is not included in the throughput if the items produced are not sold. It is demonstrated in the book that the goal of a firm is to increase its throughput while reducing operational expenses and inventory. This is instrumental in helping a firm achieve its goal of increasing profits. Therefore, throughput is an important concept presented in the book that can help operational managers improve the performance of their plants.
Bottleneck
A bottleneck is also an important concept that is brought up in the book. Any resource in a plant with a capacity that is equal to or less than the demand placed upon it is considered to be a bottleneck (Goldratt & Cox, 2004). In the book, Jonah informs Alex that he needs to differentiate between two important resources in his plant. These two resources are a bottleneck resource and a non-bottleneck resource. Therefore, the bottlenecks are presented in contrast to non-bottlenecks. As described in the book, when a resource has a capacity that exceeds the demand placed upon it that is resource is considered to be a non-bottleneck resource. Bottlenecks are not necessarily a bad thing for a plant as it can be used to control the flow of products throughout a system. In this regard, identifying the bottlenecks in the system is integral to increasing its capacity. The speed of the system is dependent on the bottleneck. This means that if 30 minutes are lost in the b...