Learning from the Past, Present, and Future to Drive Profits to New Levels

Chapter 19 Performance Metrics

DOI: 10.4324/9781003462385-19

It’s important for any organization to be able to perform effectively, but how organizations measure their performance ties directly into their long-term direction and performance. Every for-profit company must understand that their profitability is absolutely not dependent upon how much money they can save, but rather how much money they can make. And the two approaches are dramatically different. I want to relate a short story, originally written by Bruce Nelson in our book, [1] Epiphanized – A Novel Integrating Theory of Constraints, Lean, and Six Sigma.

The Sock Maker

In the early 1900s, Cost Accounting (CA) was in its early stages and beginning to be widely accepted and used. ...