The Goal: A Process of Ongoing Improvement (Summary)
Imagine a scout troop on a hike. The entire troop can only move as fast as its slowest member, a boy named Herbie. Yelling at the fast kids to slow down or Herbie to speed up doesn't work. The only way to speed up the whole group is to put Herbie at the front of the line and take the heavy items out of his backpack for others to carry. Your business, your department, and your projects all have a 'Herbie'—a single bottleneck—and focusing on anything else is a waste of time.
Your System Is Only as Fast as Its Slowest Part
The central idea of the Theory of Constraints is that the output of any system is determined by its bottleneck. Improving any other part of the system will not increase overall output and is therefore a waste of resources.
In the novel, the plant's expensive new robots are running at 100% capacity, creating huge piles of parts. This looks efficient, but it's actually losing money because these parts can't be used until they pass through the true bottlenecks: an old machine called the NCX-10 and the heat-treat department. The robots' 'efficiency' only increases inventory costs without increasing sales.
Efficiency is a Trap; Throughput is King
Traditional metrics like 'local efficiency' (keeping every machine busy) are misleading and often destructive. The true goal is to make money, which is best measured by increasing throughput (the rate of sales), while decreasing inventory and operational expense.
To keep the bottleneck NCX-10 machine running constantly, the plant manager stops having it work on parts that aren't immediately needed for orders. This means the NCX-10 is sometimes idle—a cardinal sin in traditional management. However, this change ensures that everything the machine does produce directly contributes to sales, dramatically increasing the plant's profitability.
A 'Balanced Plant' Is a Recipe for Disaster
Striving to have every step in a process have the exact same capacity is a terrible idea. Because of statistical fluctuations and dependent events, a perfectly balanced system will always be starved for work and underperform. True flow requires non-bottlenecks to have protective excess capacity.
The book illustrates this with a dice game. A line of people must pass matches from one bowl to the next, with the number passed determined by a dice roll. Even though the average capacity is the same for everyone (3.5), the line's output is far lower. Why? A low roll at the front of the line creates a shortage that can never be made up, while a high roll just creates a pileup. This proves that balancing capacity is fundamentally flawed.
Improvement is a Five-Step, Repeatable Process
Goldratt provides a simple, repeatable process for applying the Theory of Constraints: (1) Identify the constraint, (2) Exploit the constraint, (3) Subordinate everything else to the constraint, (4) Elevate the constraint, and (5) Repeat the process.
The plant manager, Alex Rogo, follows these steps precisely. He identifies the NCX-10 and heat-treat as bottlenecks. He exploits them by changing break schedules so they never stop. He subordinates by color-coding parts so everyone knows what's priority. He elevates by bringing back an old, retired machine to offload work. When the bottleneck moves, he starts the process over.
