Throughput Accounting: A Guide to Constraint Management

November 1, 2020
Throughput Accounting: A Guide to Constraint Management

From the preface: The practice of throughputaccounting is about how to wring more profits from your company byfocusing strictly on the management of your bottleneck resource, orconstraint. This approach is entirely at odds with the traditionaluse of detailed allocations to arrive at fully burdened costs foryour products, customers, and sales regions—which can yield resultsso convoluted that a company can become paralyzed with indecision.Not so with throughput accounting, which yields crisp and easy tounderstand results for a broad range of managementapplications.Throughput Accounting begins with an introduction tothe concepts of constraint management, followed by supplementalinformation about how it is used in the factory for dailyproduction decisions. The book then addresses how constraintmanagement can be applied within the accounting department,beginning with a comparison between it and other cost accountingsystems. Of particular interest are two chapters on financialanalysis scenarios and case studies that show specifically howthroughput accounting can be used to find the best solutions in alarge number of real-world situations.Throughput Accounting also explores how the traditionalbudgeting and capital budgeting models can be adapted to integratethroughput concepts, as well as how control systems can be designedto warn ofproblems related to the constraint and several supportingfunctions. In addition, the book shows which reports and metrics touse in a throughput environment, as well as how this informationcan be extracted from an accounting system designed to accumulateinformation for reports that conform to generally acceptedaccounting principles.If you are an accounting manager, financial analyst, productionplanner, or production manager, then Throughput Accountingcontains the tools you need to improve your company'sperformance.Contents:About the AuthorPreface1 Overview of the Theory of Constraints2 Constraint Management in the Factory3 Throughput and Traditional Cost Accounting Concepts4 Throughput and Financial Analysis Scenarios5 Throughput in the Budgeting and Capital Budgeting Process6 Throughput and Generally Accepted Accounting Principles7 Throughput and Control Systems8 Throughput and Performance Measurement and Reporting Systems9 Throughput and Accounting Management10 Throughput Case StudiesIndex