I just finished reading The Goal: A Process of Ongoing Improvement this morning, and overall was pretty impressed. It’s a really easy read; it’s not a business manual, it’s a novel, has a little bit of a love story going on, and is over just “light”.
The main message of the book is that the proper way to manage any operation, whether it’s a manufacturing plant or a web design shop or a clothing store, is to:
- Identify what needs to be changed
- Identify what it should be changed to
- Identify how to execute the change
Sounds really elementary, I know. But the whole point of the book is that you shouldn’t let your business and processes control you and lead you. Instead, you should be constantly criticizing and reviewing your processes and not settling for any bottlenecks or sticking points.
Another major theme in the novel is that the point of a business is to make money, and more specifically, to make a profit. The way to do this is not to create as much as possible, but instead to run as efficiently as possible. That might require making drastic changes to common practices, things that on paper seem like they will hurt the bottom line.
For example, in the book, they discover they’re running their manufacturing plant at 80% capacity. That means 20% of the time, they have machines and people just sitting there doing nothing. So they tell their sales manager to get them 20% more work. He says that they can only get it from a client who wants it at below cost, so they would lose money. But the main characters convince him that they only have materials as costs, as they have people doing nothing currently who are getting paid, so their time is not an additional expense.
On paper, the cost of a product was materials + worker’s time. But that didn’t take into account the capacity of the plant doing the work. So it went under the radar until it was brought to management’s attention. This simple oversight affected the company’s bottomline, and was caught because of the process of continually reviewing and optimizing each process as described in the book.
Overall, it’s a pretty simple book. It really focuses on identifying bottlenecks and optimizing work flow around them in order to make your business as efficient as possible. It’s like 340 pages, and is engaging, so you can probably put it down in a weekend if you’re a quick reader.