by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow
Dr. Lisa: Each employee has a life outside his or her job in a business. They have family, financial and other pressures. Time off is sometimes needed. Brad: Of course, but business owners have to run the business to satisfy their customers, as well as make enough...
by Dr Lisa | Theory of Constraints Finance, Accounting, and Cash Flow
Brad: Who cares? Is this really that important? In the last 20+ years since Throughput Accounting was invented to replace cost accounting, not very many business owners have even heard of it, much less felt a need to change. Dr. Lisa: True. Most just went out of...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow
Brad: So, the problem is that by using more time than estimated, there is less time left in the month to produce and ship the margin on subsequent jobs. Sometimes, what margin is shipped in total is less than the fixed costs for the month, and then there is a loss for...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow
If we can compute the impact of any action using T, I, and OE, which are global measures (and part of Throughput Accounting), then we can compute the bottom line financial impact quite easily: · Throughput minus Operating Expense equals Net Profit (T-OE=NP). ·...
by Dr Lisa | POOGI Series, Theory of Constraints Finance, Accounting, and Cash Flow, Theory of Constraints Measures
Reliability To increase our reliablity, we need things to NOT go wrong. Dr. Goldratt proposed that there are just two categories of things that can go wrong – unreliability and ineffectiveness. These two things account for everything, and have no overlap....
