Maximizing
Profit: How to Measure the Financial Impact of Manufacturing Decisions
Author: Walter Thrun
Product Code: 2717
ISBN: 1-56327-271-7
Publisher: Productivity Press
Published: 2002
Pages: 254
Binding: Paperback
Dimensions: 7 X 10 X 0.25 "
Illustrated: Yes
Pages Description: tables/cd
Price: US $40.00
Maximizing Profit is unique in its coverage of the financial accounting
measures that pertain to the profitability of advanced manufacturing
operations. It provides actionable techniques to help managers assess
their current practices and employ new ways of thinking about the business
plan.
Highlights Include:
Revealing counter-productive performance measures
Identifying the operational objectives that will realize the greatest
profits
Managing with optimization techniques
Reassessing the make-or-buy decision
Incorporating lean manufacturing activities into the aggregate plan
Rethinking traditional capital project ranking techniques
Measuring the financial impact of multiplant operations.
Employing a hypothetical company case study, based on the author's actual
experiences, Maximizing Profit guides you through a series of common
manufacturing decisions such as product mix, process improvement, make-or-buy,
and capital investment. A CD with an interactive Excel Solver spreadsheet
tool — an optimization algorithm — is included that allows
you to follow the team in the case study step-by-step as they shed prior
assumptions and use optimization techniques to inform decisions.
Maximizing Profit's practical information on the major
decisions that will increase cash flow make it a "must read"
and "must have" book for managers in manufacturing entities,
specifically, general managers, manufacturing/operations managers, controllers,
manufacturing/industrial engineers, and purchasing managers, as well
as students of industrial business management.
Table of Contents
Section I: Manufacturing Activities are Ultimately Expressed in Financial
Terms
Chapter 1: Operational Improvements Don't Necessarily
Translate to Financial Success
Section II: Exposing the Existing Counter-Productive
Performance Measures
Chapter 2: The Standard Cost System: Manufacturing's Millstone
Chapter 3: Maximizing Gross Profit: Introduction to Optimization Techniques
Section III: Maximizing Return on Investment (R.O.I.)
is the Ultimate Objective: How to Get There is the Great Challenge
Chapter 4: Which Operational Objective Will produce the Most Profit?
Section IV: Getting the Most From What You Have: Learning
How to Manage with Optimization Techniques
Chapter 5: Measuring the Financial Benefits of Manufacturing Process
Improvements
Chapter 6: A New Look at the Make or Buy Decision
Chapter 7: How to Evaluate New Business with Optimization Techniques
Chapter 8: Should we Be a Subcontractor?
Section V: Selective Growth and System Expansion Using
Optimization Techniques
Chapter 9: Optimizing the Capital Budget with Better Measurement of
the Financial Benefits from Proposed Equipment Additions
Chapter 10: Rethinking Traditional Capital Project Ranking Techniques
Section VI: Illustrating the Aggregate Planning Process
Chapter 11: Developing the Aggregate Plan Using Optimization Techniques
Chapter 12: Incorporating Lean Manufacturing Activities (and Other Operational
Improvements) into the Aggregate Plan
Chapter 13: Capital Budgeting is Just One Step in the Seamless Process
Chapter 14: Finalizing the Aggregate Planning Process
Section VII: Evaluating Multiple Plant Operations Using
Optimization Techniques
Chapter 15: Measuring the Real Financial Impact of Multiplant Operations
Section VIII: Summary - Retracing the Steps to Becoming
a User of Optimization Techniques
Chapter 16: Summarizing OpTek's Journey from Traditional Activities
to Optimization Techniques
Section IX: Appendices
Appendix A: Activity Based Costing (ABC): Determination of ABC Rates
Presented in Chapter 2
Appendix B: Using Excel Solver to Execute the OpTek Algorithm
Appendix C: West Coast Processors: A Case Study
Appendix D: Other Proponents and Applications of Optimization Techniques
Glossary
Index
Reviews
Review By: Steve Ryan, Turnaround Planning, Sunoco Inc.,
Tulsa Refinery - June 1, 2004
"Using the Profit Maximization Techniques developed by Walt Thrun
will allow any production facility to calculate their maximum profit
obtainable. Now there is no need to guess what the optimum product mix
should be for your plant, what Capital Projects to implement, what your
budget and forecast should be. This has the potential to revolutionize
productivity as we measure it today. Let's quit getting better at doing
the wrong things and start doing the right things."
Review By: Chris West, Project Engineer, The Nordam
Group - June 1, 2004
"Without the precepts in Maximizing Profit, most manufacturing
organizations are at an immediate disadvantage when making make or buy
decisions, choosing which process improvement to implement, or even
which capital improvement to make. Each decision will impact the bottom
line. The question is, will it be positive or negative in regard to
the bottom line? The ability to now focus on the maximization of contribution
answers this question and reveals the opportunities that await every
business owner, general manager and anyone else involved in making decisions."
Review By: Michael Pierce, Plant Manager, West Coast
Processors - June 1, 2004
"Imagine having a tool that could make quantum leaps in company
profitability with no added capital investment, cost reduction, or product
price increases. Within Maximizing Profit lies that tool, evidenced
not only in my reading of the book, but in my application of its concepts."
Review By: Michael Piggott, Quality Assurance Manager,
Waterloo Industries - June 1, 2004
"This easy-to-read book offers a refreshing new look at non-traditional
methods to measure manufacturing performance in terms all decision makers
can understand: profit. Armed with readily available computer tools,
Walt Thrun confidently and logically assaults conventional thinking
and methods in performance measurement and leads the reader to obvious
conclusions about the relationship between constraints and profitability.
Such measures as overhead absorption, cost allocation and plant utilization
are replaced with profit optimization, contribution maximization and
return on investment."
Review
By: Rob Renfro, Gear Products, Inc. - June 1, 2004
"The difference between variable costs and fixed costs is like
night and day. Academia of today intertwines the two in the standard
cost system and produces graduates with a blurred view of cost accounting.
Walt Thrun shows the fallacies of the standard cost system and gives
a contemporary alternative. As an engineer, I appreciate the calculation
to find the correct product mix to maximize profit."
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