The goal of any organization is to make money
TYPE: Note
MATURITY: Captured in September 2025
IDEA: The Goal, perhaps one of my favorite business books of all time, emphasizes the idea that every company has the main goal to make money. We measure that activity through things like net income, ROI, and cash flow. But the operations revolve around three operational processes/measurements:
Throughput: The rate at which the system generates money through sales
Inventory: All the money the system has invested in things and intends to sell
Operational Expense: All the money the system spends to turn inventory into throughput
By optimizing these areas, which by the way sound like manufacturing things but actually can relate to all functions of a business, you increase your money-making abilities.
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