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raineysky
02-05-2011, 05:55 PM
Does anyone have experience with Throughput Accounting? I am trying to build an excel spreadsheet and categorize each part for a fictitious manufacturing business but it ain't coming to me.

Thank You

vangogh
02-13-2011, 11:55 AM
I don't have that experience, but I did notice no one else had answered and so thought I'd reply to move your question back up to the top of the new posts lists and hopefully attract some attention to it.

I tried looking for a tutorial online, but didn't have much luck. Hint to accounts: This might be a good topic to create some content around.

Spider
02-13-2011, 02:24 PM
What is Throughput Accounting? I'm guessing it might have something to do with management accounts that need to show the stage costs and cashflow of a continuous process - like a steel mill, a retail store or a cornflakes factory, where the process never ends.

Evan
02-13-2011, 10:12 PM
Seeing as it's not a traditional accounting method, other than a vague understanding of it, I don't know "throughput accounting". It's not a preferred method, and for me would not produce any meaningful information.

moleswm
03-10-2011, 08:58 PM
I have limited experience with Throughput Accounting, I used it years ago when I was a Cost Accounting Manager working for a manufacturing company. The production manager was very much into Lean Manufacturing and spearheaded its implementation at the company. Throughput Accounting attempts to measure actual inputs, consumption, and outputs in a manufacturing process to help understand drivers of inventory and productivity in a manufacturing environment. Traditional accounting, the argument goes, falls short in providing meaningful metrics for effective management reporting.

vangogh
03-11-2011, 01:08 AM
Thanks for the info Mike. Seems like most of us were at a bit of a loss about what throughput accounting is. I guess you need to be familiar with manufacturing to know about it.

raineysky
04-19-2011, 12:23 PM
Thanks for the replies. Yes, Throughput Accounting is used in the Manufacturing sector although I'm not sure how much it is used. I was hoping someone here had experience using this method of accounting and could provide a simple example of how it worked. There are a few examples when doing a Google search but I have yet to find a good one.

Lonniea39
10-18-2011, 07:18 AM
Hi
A very long time ago, late 1980s, I worked in the San Antonio Air Logistics Center and among roles, was the Total Quality Manager Lead and TOC guy for our depot overhaul line. My experience with TOC and the related accounting changes (keep in mind that TOC accounting evolved over time from around that point in time) was very positive. The trick is figuring out where your constraint is, recognizing when it moves (it will jump around, until finally settling down on what is really constrained after you go through the cycle of constraint exploitation) and then adjusting the accounting.

Our experience was very positive and if you investigate, you will find that TOC management is now widely deployed across the entire DOD depot environment. I have also used in conjunction with Critical Chain Project Management on numerous projects, a big one being on the Sup@irworld SRM project on the A380 project. Only issue I had was that it worked TOO well, as there was no noise as in a typical project, there wasn't much to do. Project went live, on-time, on-budget, on-scope, as have many others.

it is definitely easier to see how Throughput Accounting is used in a manufacturing environment, but that is not the only place. It applies equally in a service environment, you just have to learn how to recognize a constraint. And put a processing cost to that constraint. Other than that, works about the same.

Andri Viiand
12-23-2011, 08:20 AM
Very helpful starting point for me to start learning more about how to apply Theory of Constraints (TOC) in my small services sector company has been "Reaching the Goal - How Managers Improve a Services Business Using Goldratt's Theory of Constraints" book by John Arthur Ricketts.