Do constraints really determine performance?
Yes! Whether profit is the main objective or not, whether it’s known exactly where constraints are or not, whether systems are small or large enterprises, constraints do determine the performance of systems… otherwise infinite profits would be made. This proven logic is based on the principles of the Theory Of Constraints¹ that uses Throughput Accounting to measure performance.
Throughput Accounting provides metrics for swift decisions.
Throughput Accountants know that constraints determine the performance of an enterprise, so they measure Throughput¹ speed generated through identified resources. Knowing what the constrained performance is, enables better product & service mixes with more Throughput. It’s a win:win:win for the system, customers, employees, shareholders, and suppliers.
Throughput is the velocity of money flowing through an enterprise. Identifying what limits an enterprises Throughput, improves the ability to generate more Throughput…adding more returns to the bottom line.
Companies flourish when they measure performance with Throughput Accounting. Let TPACC show you how.
¹ The Theory Of Constraints (TOC) as developed by Dr EM Goldratt uses Throughput as its first measure of performance. TPACC are experts in TOC.
Implementing Throughput Accounting results in systems that function with goal congruence.
Is your enterprise ready for Throughput Accounting?
Throughput
Accounting
Systems have profits
Performance measurement is systems based
Constraints determine performance
TA drives behavior focused on global holistic performance
Cost
Accounting
Products have profits
Performance measurement is cost center/activity allocation based
Cost Efficiencies determine performance
CA drives behavior focused on local department performance
Uses of Throughput Accounting:
• Improve the mix of products and services your organization offers to the market.
• Learn how constraints determine performance.
• Build achievable tactics & strategies.
• Improve customer mixes.
• Make a significant impact on wealth creation.
• Improve ROI (Return on Investment).
• See why certain inefficiencies don’t always loose money.
• Combine LEAN principles with the Theory Of Constraints
∴
Click to preview book