Throughput Accounting: Why the Bottleneck Drives the Decision
When one process is the bottleneck, producing more somewhere else does not necessarily increase total system profit.
Constraint focus
Throughput accounting centers decisions on the system constraint that limits total output.
Throughput contribution
Products are evaluated based on the throughput they generate relative to the scarce bottleneck resource they consume.
Nonbottleneck capacity
Extra output at a nonconstraint process can simply create excess work in process rather than more finished sales.
Exam strategy
Find the bottleneck first, then evaluate which product earns the most throughput per unit of constrained resource.
The takeaway
Throughput accounting maximizes system performance by focusing on contribution generated through the bottleneck, not local efficiency everywhere.
Related Summit resources
FAQ
What is the key distinction?
Throughput accounting maximizes system performance by focusing on contribution generated through the bottleneck, not local efficiency everywhere.
What should I identify first?
When one process is the bottleneck, producing more somewhere else does not necessarily increase total system profit.
Why is this tested?
Understand how throughput accounting prioritizes scarce-resource capacity and contribution through the constraint.