The Goal - Eliyahu M. Goldratt

One of the best books written about continuous improvement and the Theory of Constraints, "The Goal" is a business novel that is widely used as a textbook in many MBA programs. This book illustrates through examples that not every efficiency-boosting initiative necessarily leads to positive results across an entire company. At this point, the book clearly explains why business decisions must be carefully analyzed from multiple perspectives and provides justifications for this approach.

At the core of the Theory of Constraints, the key principle is that a system's performance is limited by its weakest link, which ultimately determines the performance of the entire system. No matter how fast or advanced the machines used are, a single slow machine can disrupt the entire process. Therefore, when making decisions to increase production speed, it is essential to develop solutions that specifically address bottlenecks. Otherwise, investing in machines that are not bottlenecks can lead to unwanted consequences such as unnecessary stock accumulation and increased costs.

In summary, the speed of a production process is determined by the resource that creates the bottleneck. The production speed must be adjusted according to the machines that create the bottleneck, while increasing the production capacity of machines without bottlenecks can lead companies to disaster. Some key points from the book are as follows:

• A company can generate net profit and have a good return on investment yet still go bankrupt. Most companies that fail do so due to poor cash flow.

• The capacity of a production facility is equal to the capacity of its bottleneck. The strength of a chain is equal to its weakest link.

• An hour lost at the bottleneck is an hour lost for the entire system. An hour gained at the bottleneck is worthless because bottlenecks manage both workload and inventory.

• If you do not know what your goal is, productivity is meaningless.

• I do not believe in absolute truths. I fear that such beliefs hinder the pursuit of better understanding.

These points clearly demonstrate why "The Goal" is included in many educational programs and appeals to a wide audience, from managers to engineers.