Xiaoyun Jin (Summer)
Final Exam: Suggestion for the Improvement for the Bearington Plant In Goldratt’s novel, the Bearington plant experiences numerous problems. Alex Rogo chooses to solve these problems using the Theory of Constraints (TOC) by the instructions of Jonah. Under the strong cohesions and efforts by Alex and his team, the Bearington Plant eventually turns out to be profitable. However, the Theory of Constraints only functions well for a short-term strategy and pays inattention to non-bottlenecks; in the long run, it will prevent the plant from ongoing improvement. Thus, I suggest applying the Balanced Scorecard to the management of Bearington Plant to help improve the overall business success. Balanced Scorecard is a strategic performance management tool that helps to align and monitor the business activities with the objectives. It has four perspectives: financial, customer, internal business process and learning and growth. Through the novel, I think the four perspectives are all necessary to implement and drive a sustainable development for Bearington. First, I would argue that the complete financial measure is indispensible. The plant makes profits by reducing the inventories and increasing the sales, but the cost of parts rises according to the financial report, which gives a red signal to Alex and his team. Through the novel, it is obvious that the current cost accounting system has some limitations and the allocation of costs has some distortions. Thus, the cost measurement remains to be improved and run in a more accurate way. Moreover, Lou, the plant controller, also claims that the financial measure is necessary, as evidenced by two reasons “One is control; knowing to what extent a company is achieving its goal of making money. The other reason is measurements should induce the parts to do what's good for the organization as a