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Using Throughput Accounting can be a competitive edge all by itself
By admin | April 20, 2009
If manufacturers adopted nothing else in support of performance improvement than just Throughput Accounting, that one act would probably be enough to move them head and shoulders above their competition.Throughput Accounting has just the one purpose – to make sure that managers have a valid bridge between their actions, decisions and the bottom line – something they can rely on to tell them whether a decision or an action will help, or hurt, Net Profit and ROI. Most manufacturers believe that cost accounting data fills this same need – and they’re very mistaken. In fact, one could justifiably claim that management decisions that are made based on cost accounting data are the number one enemy of profitability and productivity in manufacturing businesses today. Throughput Accounting is the alternative approach, developed as part of the Theory of Constraints body of knowledge and taught today inside the Management Accounting curriculum.
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