Australian Country Spinners

Manufacturing 

Constraint Accounting/Thinking Process/Drum Buffer Rope

Summary of Success

Within a short time frame throughput had increased by 171%, inventory levels had  reduced by 40%, exports up by 27% and profit exceeded 25% of ROI

Ensemble has enabled ACS to do what we thought was impossible, dramatically increase our production using few extra resources. The approach Ensemble bought reinvigorated our people and enabled them to look beyond our traditional functions and processes from a fresh perspective

Brian van Rooyen,  CEO

The Problem

ACS has 95% market share of the Australian hand knitted yarns including the Patons brand. It has manufacturing, sales and distribution operations in a number of states.

Facing competition on several fronts, the use of traditional absorption product costing was constraining the businesses ability to withstand competition and resulted in losing business due to incorrect profitability assumptions generated at the product level by their current costing methods.

The Solution

A change to Throughput Accounting enabled constraints to be identified and measured and risk and return became more systemically quantified. Ensemble aided ACS in project managing the process of transforming the company from a standard cost based company to one guided by a Throughput Operating Strategy (TOS)

Ensemble worked side by side with ACS in transforming key activities aligned with the TOS including

• Production scheduling
• Product costing
• Manpower planning
• Sales and marketing
• Management accounting

This was followed by a period of keeping a watching brief over the changes and ensuring that they were permanently woven into the fabric of the business.