[Dig deeper with the full Chapter-by-Chapter Review of The Goal.][Watch a video that covers Chapter 40.]

Like Chapter 39, I find this final chapter unsatisfying. It must have been hard for Goldratt to bring the book to a close.  The character and plot arcs through the ‘fixing’ of Rogo’s plant are great – the chapters afterwards are less so.  The information they deliver is great – but it now feels more like a standard business book and it moves away from the novel format that was so effective.

Highlights

“Every report is missing at least back-up details.”

If a team cannot report, that is a first constraint that must be addressed.

“Since the strength of the chain is determined by the weakest link, then the first step to improve an organization must be to identify the weakest link.”

How do you do that?

“Don’t you realize that the attitude in engineering, claiming that the basic rule of nature is that a project never finishes on time, is an even bigger problem.”

Accepting mediocracy is a culture problem.

“And what about marketing, have you seen any marketing plan that has any chance of turning the situation around?”

Cultural infighting is a major culture problem as well.  It cannot be tolerated.

“The lack of sensible long-term strategy, the measurement issues, the lag in product design, the long lead times in production, the general attitude of passing the ball, of apathy, are all connected.”

A company’s outputs are the result of; 1/ resources (people and assets), 2/ systems, and 3/ priorities.  [Originally from Christensen.]

“That brings us to the real question, how does one go about identifying the system’s constraint?”

This is the role of the leader – the answers to finding the constraint start outside the company, not within it.

Page by Page

P328 – Only when we went through the elaborate work of separating out Donovan’s plant was the real picture exposed.

“Frankly, I’ve never seen such a sloppy place. Every report is missing at least back-up details. You know what I found today? They don’t even have a report on late receivables. The information is there but—can you believe—it’s scattered in at least three different places. How can they operate this way?”

By how much will throughput, inventory, and operating expense be improved?”

P329 –

Yes, many small actions are needed, but that doesn’t mean that we can afford to be satisfied with actions that improve the situation. We must carefully choose which ones to concentrate on, otherwise. . . .

How much time will it take you to change, for internal purposes only, the way that we evaluate inventory?”

“I see very clearly the impact on cash, on inventory, and on operating expense, but not on throughput.”

P330 –

“So, we continue to offer the old stuff rather than the new. We continue to lose market share, but it’s better than to bite the bullet of write-offs. Do you understand now the impact it has on throughput?”

P331 – “Identify the system’s constraint( s),” Lou reads from the board.

If any organization was built for a purpose and any organization is composed of more than one person, then we must conclude that the purpose of the organization

P332 –

“Requires the synchronized efforts of more than one person.”

“If synchronized efforts are required and the contribution of one link is strongly dependent on the performance of the other links, we cannot ignore the fact that organizations are not just a pile of different links, they should be regarded as chains.”

“Since the strength of the chain is determined by the weakest link, then the first step to improve an organization must be to identify the weakest link.”

P333 –

“Don’t you realize that the attitude in engineering, claiming that the basic rule of nature is that a project never finishes on time, is an even bigger problem.”

“And what about marketing, have you seen any marketing plan that has any chance of turning the situation around?”

“The lack of sensible long-term strategy, the measurement issues, the lag in product design, the long lead times in production, the general attitude of passing the ball, of apathy, are all connected.”

P334 – “That brings us to the real question, how does one go about identifying the system’s constraint?”

P335 – “What is the point in trying to exploit an erroneous policy?”

P336 – “If the first thinking process should lead us to answer the question ‘what to change?’ the second thinking process should lead us to answer the question ‘what to change to?’ I can already see the need for a third thinking process.”

“For the ability to answer three simple questions: ‘what to change?’, ‘what to change to?’, and ‘how to cause the change?’”