About this Presentation
This presentation discusses three questions: If we implement the TOC distribution solution on a retailer, what will be the impact on its profit?; Can I use current retailer/distributor numbers in throughput accounting and make decisions without errors?; Which factors impact the financial results more in a distribution environment?. The discussion centers around the financial statements and throughput (T), inventory (I), and operation expense (OE), a reexamination of T, I, OE; the truth about T; where is my I; OE is really OE; the financial impact of TOC distribution and modeling the impact. Financial accounting statements are described as they relate to T, I, and OE. A model illustrating the impact of shortages over time is provided.
What Will You Learn
To help you get the most value from this session, we’ve highlighted a few key points. These takeaways capture the main ideas and practical insights from the presentation, making it easier for you to review, reflect, and apply what you’ve learned.
This session challenges a comforting assumption in TOC finance: in distribution and retail, T, I, and OE do not automatically “tell the whole story” unless you first clean up how they are defined and read from real financial statements.
A major insight is that Throughput in distribution can be badly misunderstood if you ignore full-markup sales, discounted sales, spoilage, losses, and the difference between COGS and true variable cost. The presentation hints that better decisions depend on unpacking those pieces instead of using one blunt number.
The session also shows that Investment is not just inventory on a shelf. In distribution, receivables and payables materially shape the financial picture, which means working capital dynamics can change the attractiveness of TOC decisions more than many managers expect.4. Perhaps the biggest draw is the scale of the modeled upside: the presentation explores how reducing shortages, cutting inventory, and improving mix can multiply profits dramatically, suggesting that the financial impact of TOC Distribution may be far larger than a simple inventory reduction story.
Instructor(s)
Humberto R. Baptista
Humberto R. Baptista is a strategic thinker, innovator, and Synergist, serving as CEO of Vectis Solutions. A recipient of the TOCICO Lifetime Achievement Award (2019), he has spent decades shaping how organizations think, decide, and perform. Humberto was a strategic advisor to Neogrid, a member of the TOCICO Board of Directors, and a senior figure in the Goldratt Group. He has led major Viable Vision transformations across sectors—from consumer goods and retail to manufacturing, services, and large-scale projects—delivering tangible, systemic breakthroughs. As a global educator, he has trained hundreds of TOC Viable Vision Application Experts and Project Leaders. Humberto is the creator of the Comprehensive Management methodology, designed to connect local actions with global consequences in real-world business systems. His current focus includes Comprehensive Management, TOC Principles, S&T-based implementations, advanced TOC Finance, and applying TOC to complex domains like retail, government, health, and education.