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Supply Chain Management Strategy Essay about "The Goal"
1. “Within the factory setting, Alex has to deal with all parts of the supply chain. Give an
example of challenges or decisions they had to face regarding…
a. Buy: Dealing with suppliers (prices, delivery terms, quality issues, etc)
b. Make: Production schedules, quality, etc.
c. Move: Shipment schedules, dealing with delivery options on parts, etc.
d. Store: Inventory, inventory, inventory! Finished goods, WIP, raw materials…
e. Sell: Processing, influencing, or anticipating demand.”
In the Book, Alex seems to act as a dedicated Supply chain professional who keep face
the challenges to cope the issues to do her job successfully. The core object of the Alex is to
make the wise decisions regarding each and every aspect of supply chain operations including
the above described ones. Goldratt described the supply chain issues; however, in somewhat
controversial manner. Therefore, regarding the, buy, make, move, store and sell; Alex need to do
a comprehensive and detailed analysis so that the core goal that is to reach the pinnacle of

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profitability by keep minimizing the cost could be achieved easily. There are lots of examples
that could be extracted but however, to cope the challenges detailed SWOT analysis will be the
appropriate choice.
2. “Give me the definitions of throughput, inventory and operational expense given in
The Goa”l.
In the book, Goldratt describe the different definitions in very distinct manner such as
there are controversies regarding the definition of ‘throughput’, that is the rate of generating the
money by the particular selected system. While Inventory, is the types of goods that are gathered
to resale to make the profit. Operational Expenses are the cost that has to pay to convert the
inventory into the finished products that are sold to generate earnings.
3. “Give me the definition of a bottleneck operation. Develop your own simple example
to demonstrate it to me. Describe two or three different ways to discover the bottleneck of a
process.”
Bottleneck is the type of resource that is less or at lease equal to the demand of particular
product or service that are ordered. Bottleneck is the type of controlling tool that operates the
flow, from the production to the market.
Example: to control the traffic of Trains, there is central command system that keep
analyze the traffic situation on each track and on the basis of Bottleneck tools and analysis this
system made a decision to diverge the particular train on the particular track or not.

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- There are different ways to discover the bottleneck such as there should be benchmark
system that describe the max limit of any production line and when this limit is going to reach;
there should be a prompt system so that the extra traffic could be diverted to the another
production line.
- In online processing, there should be warning alerts such as if the particular booking
is going to achieve so there should be a warning beep with message that alert the data controller
to make the decision to keep flow the operations without any discrepancy.
4. “What are the production-scheduling principles discussed in The Goal? (You should
be able to list at least four or five such principles. As an example of such a principle: “An hour
saved at the bottleneck is an hour saved for the whole system.”)”
It should be noted that client and their level of satisfactions are the catalysts for the
commercial business. The IT that dramatically changed the way of customer services and
business operations and this is the key source of transformation of organizational culture,
operation, behavior and other type of related elements. Now, at only one click distance, the
whole information about any aspect of product and services can be extracted and analyzed;
therefore, in the current dynamic rivalry retaining the customer is not the easy task; therefore
analyzing the customer behavior is highly crucial for formulating the policies and procedures.
Therefore, the crux of the selected principal “An hour saved at the bottleneck is an hour saved
for the whole system.” are that efficiency is inevitable to cut the cost. A proper analysis is

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inevitable to maximize the profit and without diligent analysis it is not possible to be standstill in
the industry.
5. “What are "dependent events"? What are "statistical fluctuations?" Use a simple
example to illustrate how these two phenomena affect the throughput of a production process.”
Dependent events are those that are changed when their independent event change such
as increase the cost of raw material will change the overall production cost. Statistical
fluctuations are the type of number game regarding any type of particular entity or variable such
as inventory and technology, etc.
Example: suppose, if Govt increase the Tax rate on particular raw material that will
directly or indirectly affect the dependent events and statistical fluctuations. This resultant
change will affect the throughput of a production process because change is tax rate will change
the consumer buying decision.
6. “Why did Alex put Herbie at the head of the line?”
Alex put Herbie at the head of the line to ensure the flawless operations by not scraping
even the tiny things. Alex decision turned the Herbie into an effective and energetic participant.
7. “A frequently mentioned principle in the book is: "Do not focus on balancing
capacities, focus on synchronizing the flow." Explain by using a simple example of why we
should not be particularly concerned with balancing capacities in a production process.”

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When flow are synchronized so to achieve the balancing capacities will not be the
difficult tasks. It will automatically synchronized such as to eliminate the problem of late comers
in the organization, implementation KPI (key performance indicator) system will synchronized
the attendance with the performance that will auto balance the capacity issues.
8. “Another frequently mentioned principle in the book is: "Resources must be utilized,
not simply activated". Explain the logic of this principle by using as an example a situation
described in the book.”
The example of Herbie is the obvious example of this principal because the organization
has to bear the cost on each and every particular resource and not to use the particular source at it
max level will increase the rate of return that will directly or indirect hit the earning level and
breakeven points.
9. “In Chapter 28 of the book it is suggested that it makes sense to cut the batch sizes in
half at the non-bottleneck machines. Do you agree? Explain why or why not.”
This suggestion could be controversial because every industry or organization has its own
pros and cons so put this logic on every particular organization will not be appropriate.
Therefore, it could be rephrased that before implementing the above principal, diligent analysis
will be inevitable.

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10. “Why does their cost measurement system indicate that their cost per part goes up
when they cut their batch sizes by half at the non-bottleneck operations (see Chapter 29)?”
It simply indicates that particular production units were not producing at max level while
they were consuming the same resources as others units were and that were operating at proper
level of non-bottleneck operations.
11. “In Chapter 21, in an effort to improve the throughput of the system, they introduced
a priority scheduling system using "red and green tags". What is the rationale behind such an
action? Explain. In Chapter 25, they discovered some problems with the use of such a system.
What was the cause of the problem? Explain the logic of the remedial action required to address
it. How does this relate to the scheduling concepts from our chapter 9 material (SPT, WSPT, LS,
FIFO, etc?)”
The rationale behind the priority scheduling system is to ensure the operation of supply
chain at max level with proper and particular efficiency and without any discrepancy as also
described in above questions.
As described above, to ensure the effective and efficient operations, proper and diligent
analysis is inevitable; furthermore, after implementing the particular solution strict vigilance is
also necessary to highlight the particular errors as the particular errors and problem were
highlighted in the chapter. Hence, the cause of problem could be stated as lack of vigilance.
There is very simple explanation of required remedial action that is to lessen the cost and
to max the profitability. It should be noted that proper scheduling is inevitable to ensure the

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flawless operations. Therefore, to ensure the errorless scheduling proper vigilance is inevitable
(Goldratt, n.d).

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Work Cited
Goldratt, E.M. (n.d). "THE GOAL: A process of Ongoing Movement". 20th
anniversary addition.
Published.