I knew the author, Steven M. Bragg from his podcast series “Accounting Best Practices with Steven Bragg” before I came across his book “throughput accounting, a guide to constraint management” published by Wiley & sons, 2007. Book presentation The hard cover book has 178 pages, 10 chapters, easy to read in neat presentation and legible … Continue reading My takeaways from throughput accounting, the book
Throughput Accounting (TA) can be understood as a simplified accounting system based on Theory of Constraints (ToC) principles. TA makes growth-driven management and decision making simpler and understandable even for people not familiar with traditional accounting. Beyond simplifying, TA has a different approach compared to traditional accounting. The latter will focus on cost control (cost … Continue reading What is Throughput Accounting?
Theory of Constraints (TOC) provides a framework to identify, exploit, set pace and elevate* the constraint, or put in simpler words: identify the bottleneck in the process and make the best with it. *Identify, exploit, subordinate, elevate and prevent inertia are known as the “five focusing steps” of Theory of Constraints. In this constraint or … Continue reading TOC-based decision for best product mix
Throughput accounting comes early for all studying Theory of Constraints. The simplest is about the 3 KPIs: Throughput (T), Operating Expenses (OE) and Inventory (I) - later changed to Investment - and their relationship for higher profits. Later, Throughput accounting is used to make sound decisions to maximize profit despite limited means, favoring the products with highest "octane", which is the … Continue reading Introduction to Throughput Accounting