|
Throughput Accounting
In some organizations, the implementation of the Theory of Constraints in the
operational and marketing facets of the business leads to conflict the
accounting function and other functions within the organization. This can
be ascribed to changes in the measurements that accompany the introduction of
TOC in the operating divisions. These measures support behavior that is
frequently in violation of the behavior required to support the accounting
measures. Within a very short time, conflict is generated between the new TOC
measures and the accounting measures. A good example of this is the question of
batch sizes. One traditional accounting measure prescribes that batch sizes
should be as large as possible. Thereby the setup cost per unit produced is
minimized.
However, to ensure that work-in-progress is minimized, batches are kept as
small as possible! Such conflicting demands lead to lots of disagreement between
manufacturing and accounting.
The Throughput Accounting program presented by the TOC Center systematically
highlights all the accounting measures and models that cause the
organization to behave in a manner detrimental to maximizing throughput. You
will be surprised how many there are!
Key Benefits
-
identification of the accounting aspects that are impacted by a throughput
world focus.
-
Understanding their effects on the organization
-
Formulating measures to replace currently accepted practice
-
Implementing the new measures.
What it takes...
Changing the measures is frequently insufficient. The accounting system
itself often needs to be redefined to collect, interpret and present accounting
information in a whole new way.
Concurrent with changes in the accounting system, users of information need
to be educated to understand and use the new measures.
To
see The TOC Center white paper
just go to the request form and choose,
"Throughput Accounting"
| 
