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Traditional cost accounting focuses on the cost per unit of product, derived by looking at the sum of the materials, direct labour costs and whatever additional burden of shared overheads the product is expected to carry. Similarly, in project costings, material, direct labour and share of overhead burden are calculated before determining the “cost” of the product or project. Cost accounting does not take into account the amount of time spent by the product or project at the bottleneck resource.

In doing calculations this way, many organisations forego significant opportunities by pursuing deals that make money at face value, but in reality consume disproportionately large amounts of the bottleneck resource of the organisation.

At TOCCA, costing incorporates how much of the bottleneck is being used, along with how much Throughput products or projects generate. This enables our clients to leverage their facilities far more effectively than would otherwise be achieved.




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