Through reading The Goal, by Eliyahu M. Goldratt and Jeff Cox, I learned that there is great importance for productive organization when managing a business. The book is an investigation into the life of a redemptive plant that had entered a downward spiral that would bring them closure. The book is an investigation into the life of an establishment that finds itself in a downward spiral until new management ideas begin to emerge that turn the business around and get it back on track to making money. The book describes how scientific and systematic thought processes helped this plant transform its functions into a more positive business by increasing cash flow through reorganization within the plant. The first positive step towards the return occurs when Alex Rogo, the plant manager, recognizes his company's true goal: making money. The objective of each company is often lost in statistical, production and efficiency data. To make money, a customer must have a want or need for the company's products. A customer will appreciate the satisfaction he gets from the product. Customers want to find the best deal for the product they are purchasing. Usually customers look at prices, quality and reliability. In this book we discover how important it is for the factory's customers to receive shipments on time. Fast delivery proves to be a key factor in acquiring customers for the plant. When Alex realizes how well his plant is doing with shipping dates, he decides to take it a step further by cutting the batch sizes in half. This benefits not only customers, but also the plant by reducing the time parts remain in the plant and increasing the speed of part flow. This gives Alex's plant an advantage in the market because customers look to them for faster delivery. Before the new system, the plant did not provide customers with what they wanted. Jonah helped the plant understand that what they really needed was for orders to be sent to customers on time. The plant was having trouble delivering shipments on time, creating a backlog of orders. When there was a demand for a certain order, more expenses were added to focus all efforts on a single sale. This caused a negative ripple effect throughout the plant due to their faulty cost management system.
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