Maximise Profits with Throughput Accounting and the Theory of Constraints
How what you measure makes all the difference
Are you achieving your financial targets? Are you experiencing any of the the following financial symptoms?
- Low profitability
- poor margins
- weak cash flow
- high inventory investment
- high costs
- poor ROI and maybe
- sleepless nights
Facing up to these issues is usually an ongoing battle of tighter cost controls, increased focus on cost recoveries, increased efficiencies everywhere and waste minimisation. Increasing sales to generate revenue is often done through price cuts not price increases hurting margins. Life becomes more of the same only harder!
As companies want to grow they are focussed on generating throughput - defined as the rate at which a company makes money through sales. Pursuing profitability and growth is what everyone wants but a majority of companies struggle to achieve this for any long period. Why?
- Most rely on traditional accounting and financial tools that focus on controlling costs in order to maximise profits.
- Most rely on a wide range of measures (KPI's) that are not focussed directly on the Goal.
Our mission is to help business owners and managers quickly change to a path of profitability and growth.
With the Theory of Constraints Throughput Accounting you can:-
- Maximise Profits
- Maximise ROI and
- Increase Cash Flow
You only need 4 monetary metrics and a few decision rules to achieve a major step change in performance. More..
This very good news.
- Understand how the "constraint" in your business influences the flow of money (Throughput).
- Understand how to leverage the constraint to maximise profits.
- Quickly align your operational, financial and marketing systems to accelerate Throughput Velocity - the speed of money through your system.
- Introduce measures so all people understand and focus on Throughput thereby aligning behaviours to achieve goals.
- Increase productivity and Throughput with focussed effort on the leverage point (constraint).
- Apply constraint based make/buy and pricing decisions.
- Optimise ROI on investment decisions.
- Improve product mix and target market decisions.
If you have already embarked on changing the rules of the business using TOC then it is imperative to apply simple and logical meaningful measures and decision tools that support the new rules.
