Page 10 - APRIL-2019_SlipperyRockGazette

10|April 2019
Slippery rock GAzette
Throughput Accounting
Throughput Accounting
Monthly Sales $850,000
tve
Raw Materials Freight Outsourcing
$295,000 $5,000 $0
Total tve $300,000 (35% of %T)
Throughput ($T) $550,000 (sales – tve) 65% of $T
Operating Expense ($OE) $425,000 (all labor and overhead)
Net Profit (NP) $125,000 ($T - $OE) EBIDTA
Productivity (PS) 1.29% ($T ÷ $OE)
Return on Sales (ROS) 15% (NP ÷ sales)
Total Control Point Time 786 hours (Travel + Installation
time for all jobs)
Average System 700 Octane (T/time) ($T ÷ 786)
Continued from page 8
Productivity is calculated as:
PS = T ÷ OE
If PS is equal to one, the com- pany is at break even. Typically, a PS score of 1.25 will produce a ROS of about 10%.
Octane is a measure of reve- nue generated per job relative to the time it consumes at the busi- ness system Control Point. This accomplishes a focus on the re- source in the system where rev- enue is generated. The clearly communicated focus is that this resource should operate as effectively as possible. This means that this resource should be optimized (well engineered and finitely scheduled) and that all other resources should sub- ordinate all their activities to assure the most effective opera- tion of the Control Point.
Ideally, the Control Point is where revenue is generated. This is “where the cash regis- ter rings.” Revenue generated per hour of time at this function (called Octane), is a clear indi- cation of effectiveness at this critical resource. Octane can
provide value comparisons be- tween products, market segments and Customers. As an approach toward continuous improvement, it allows a focus on the priori- tized issues that affect the critical Control Point of the business.
Octane is calculated as:
Octane = T ÷ time consumed at the Control Point
$T is the measure of value added for that job and is divided by the measure of time at the Control Point that is consumed in completing that job. Where Installation is the Control Point, Octane would be calculated as $T divided by travel time plus instal- lation time.
The chart at right is a typi- cal example of a Throughput Accounting financial statement for one month. This example is of a company producing about $10,000,000 in annual sales.
Throughput Accounting is all about operational decision-mak- ing. It is one of the elements of the business management system called Synchronous Flow.
For more information on Throughput Accounting and the principles of Synchronous Flow, please contact Ed Hill at
Synchronous Solutions, www. SynchronousSolutions.com or call 704-560-1536.
“Embrace what you don’t know, especially in the beginning, because what you don’t know can be- come your greatest asset. It ensures that you will absolutely be doing things different from everybody else.” —Sara Blakely
2019 “Stone of the Year” Announced
Labradorite Bianca by Sun Minerals Madagascar has been chosen as the 2019 Natural Stone Institute Stone of the Year. The stone will be featured on 2019 member certificates, membership code of ethics, and association marketing materials throughout the year.
Labradorite Bianca, a luxurious ex- otic semi-precious white Labradorite granite is available exclusively in the quarry owned by Sun Minerals Madagascar. Quarried in the remote southwestern region of Madagascar, this stone has a color palette varying from pure white to light grey. The granite is highlighted by flecks of ir- idescent blue Labradorite crystals. Labradorite Bianca is one of the rarest and most unique natural stones of its kind and is extremely durable. It ex- hibits an aura of luxury and opulence
Antique Fraud
Aman has pleaded guilty to forging an artifact that ended up in a Connecticut museum.
Harold Gordon faces up to 20 years in prison after entering his plea to wire fraud.
Prosecutors say the 69-year-old turned a plain writing desk into the “Bingham Family Civil War Memorial Secretary” and sold it to an antiques dealer for $64,500.
The piece was falsely claimed to be a gift given to a Civil War vet- eran in honor of his brother who was killed in the Battle of Antietam.
The Wadsworth Atheneum Museum of Art purchased the piece at a New York antiques show in 2015.
Gordon says he sold the piece be- cause he needed the money.
The museum said it has been of- fered a full refund.
and is ideal for mansions, ho- tels, resorts, commercial build- ings, and luxurious residential developments.
For more information on Labradorite Bianca granite, please visit www.sunminerals- madagascar.rocks. To learn more about the Natural Stone Institute’s Stone of the Year program, visit www.naturalstoneinstitute.org/ stoneoftheyear.
The Natural Stone Institute is a trade association representing every aspect of the natural stone industry. The current membership exceeds 2,000 members in over 50 nations. The association of- fers a wide array of technical and training resources, professional development opportunities, reg- ulatory advocacy, and network- ing events. Learn more at www. naturalstoneinstitute.org .
Labradorite Bianca, a white labradorite granite is mined exclusively in Madagascar.