The Goal | Eliyahu M. Goldratt | Book Summary 

thanks tony

The Goal Reframed: Increase throughput while simultaneously reducing both inventory and operating expense. Not to do them in isolation, but to do them all together. If you keep everyone and everything working at full capacity, you’ll naturally build up inventory by creating excess work. A plant where everyone is working all the time is very inefficient. You can’t have a “balanced plant” without doing excess work. Because of dependent events and statistical fluctuations, you’ll naturally run into bottlenecks in the system, kind of like the fattest kid on a hike slowing everyone down. The whole system only moves as fast as the bottleneck, so it makes sense to focus on increasing the bottleneck’s capacity, and tying the rest of the system’s rate to the rate of the bottleneck. In the analogy, put the fat kid at the front of the line, and make his backpack as light as possible so he can walk faster. Since output can only deviate up to the maximum level determined by its dependent events, but it can deviate down much lower, with successive dependent events you’ll get further and further negative fluctuations. A kid can come to a halt, but he can only catch up as much as the kid in front of him, he can never catch up past the point the previous kid has already walked. Bottleneck: “A bottleneck is any resource whose capacity is equal to or less than the demand placed upon it. And a non-bottleneck is any resource whose capacity is greater than the demand placed on it.” [139].

@@BestBookBits Ah got it, the output of a business is dictated by the maximum capacity of the bottleneck. The capacity of the next dependent event may be reached if the bottleneck or constraint is addressed and improved. The output only increases if the bottleneck is improved but the bottleneck will continuously negatively affect the output until we reach negative profits or closure of the business.

Explanation about dependent events and *statistical fluctuations* -- When you have a chain of events that need to happen in order to produce/manufacture something, each link in the chain will depend on the previous links. For example, when you drive somewhere then you can't drive on the next road before you have turned onto it from the previous road. So your whole drive is a chain of roads that bring you from your origin to your destination. This is dependant events. If we continue with the road analogy, we can also say that each road you drive will be complete in different time. For example if you drive from your house to the highway, each time you drive there it will take you a slightly different time. Sometimes it might take you 10 minutes, sometimes 8 minutes, sometimes 12 minutes. These are statistical fluctuations. When you need to be at the airport boarding lounge at (or before) exactly 11am, then you cannot rely that all the roads leading you there will take "exact times" to pass through them. Which is why you take into account that some part of your journey from your home to the airport might go fast, but some other parts might go a bit slower than the "average" that you are accustomed to. If you really want to get on that flight, you need to take into account a "buffer" to protect yourself from being late. Understanding that dependant events and statistical fluctuations exist, and maybe even knowing the size of these fluctuations (more or less) can give you a hint on how big of a buffer you need to take. Should you exit the house half an hour earlier that "normal", or maybe two hours earlier.

@@kesor6 Thank you so much this adds more understanding to me.

@@arnabchowdhury9951 There are external and internal factors to reaching point A to B in this case of the road analogy. For you to get to the next road it may take 8 minutes compared to 10 minutes (longer time completion) this may have been caused by hitting all green lights or no walking pedestrians are on the road at the time of travel or felt that you needed to arrive much earlier or there will be an consequence. Hope that helps. Simply put:

Its not a british accent.

Australian but close

Why don't you start your own youtube channel and show us how it's done?

you read my mind

sorry i cannot because my main focus is being high quality written summaries on my website bestbookbits.com and my second focus is to bring high quality audio summaries to my listeners on my podcast on Spotify and well third, I dont have the resources yet or time to create animated summaries.

Thanks Ev-gy-ny ;)

my bad

i dont understand

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thanks very much, if I can help you anyway on your dreams or goals. Happy to help and chat. go.bestbookbits.com/coachingcall