In good times, companies like to hear that calculations just need to be “recalculated”. However, worse periods reveal that they often don’t add up and even lead to bad decisions. How to measure the real performance of a company when numbers lie? And how to gain profit without drowning in data and unnecessary bureaucracy?
These questions are answered by Milan Juhaniak from TOCEU and Ľubomír Klieštik from Kamenárstvo Klieštik – each from their own perspective, but with the same conclusion: focus on bottlenecks and measure what really determines the outcome.
Real Product Profitability and the Meaning of Calculations
In times of growth, we often hear the phrase: “Our calculations don’t add up, we need to recalculate them.” When worse times come, reality proves even harsher: “Our calculations show complete nonsense and lead us to make bad decisions.”
Milan Juhaniak points out that the biggest problem often arises where companies follow calculations with maximum responsibility. An example? The calculation might show that the best thing for the company is not to take any order – and even do nothing.
“Such allocation from a nice desk itself carries elements of post-Marxism. Everyone already knows it doesn’t work, but if we do it responsibly and stick to it, it will work. No, it won’t work,” says Milan.
“Calculations show us complete nonsense and lead us to make bad decisions.” – Milan Juhaniak.
Why Traditional Calculations Often Fail
The problem lies in ignoring physics and time. You can have a product with 99% profit, but if you spend a week on its production and block other orders, you’ll only realize a part of the potential profit. The solution? Look at the process, identify the bottleneck, work with it, and measure exactly what needs to be measured. That’s why the Cindy system was created – for effective performance measurement that takes into account the reality of production.
“Proper performance measurement means not getting overwhelmed with data, but focusing on critical points where profit and cash flow are decided,” adds Milan.
A Success Story from Čadca
In this regard, Milan Juhaniak finds his connection with Ľubo Klieštik from Kamenárstvo Klieštik interesting. What could a former financial director from large multinational companies have in common with the owner of a stonework company?
At first glance, you might only connect them through working with numbers – Milan as a former financial director of a multinational company and Ľubomír as the owner of a stonework company. But although their approaches are completely different, the result is the same: precisely identifying bottlenecks and thereby improving both profit and cash flow.
“My calculations show a specific problem and Ľubo immediately quotes the exact chapter from E. M. Goldratt. Other times he does it first and I just say: Yes, this is exactly what we see here,“ describes Milan. “We see the same thing, each in a completely different way.”
If you look at Finstate, his company is functioning. But Milan adds that this story could have looked completely different.
“Ľubo could have stayed in calculations, could have lamented over competition, over market decline, could have said he didn’t have time to look for a different perspective. He could have gotten stuck anywhere.”
But it didn’t happen.
Ľubomír openly admits what moment was decisive: “I realized that both time and money were disappearing. The company was on the brink of bankruptcy and there was no room for further mistakes. I needed a quick, bold, and accurate decision.”
When they started applying the principles of the Theory of Constraints (TOC), the shift came faster than they expected. “We identified the bottleneck, focused all efforts on it, and without new resources, both profit and cash flow significantly improved. The company started to recover faster than I expected,” says Ľubomír.
Today, there’s a successful story from Čadca – and also a person who has become a big fan of TOC and selflessly shares what works in practice. Milan adds only one thing: “This is what it looks like when two people see the same problem – and old thinking is sacrificed, not the future of the company.”
A Lesson for Entrepreneurs
For those who feel they’re doing everything right, but the result isn’t coming, the message is clear: “You might be spending a lot of energy, time, and finances on tasks that don’t move the company forward. TOC will precisely show you the critical point of improvement – when you move it, you’ll hit the nail on the head and the result will come quickly and significantly. The money and time that are reality today are proof that it works,” adds Ľubomír.
And how does AI fit into this? Milan suggests that at the webinar on November 27, they will discuss how artificial intelligence can help in measuring company performance, what data to show it, and what data it shouldn’t have access to. All this in the context of effective management of bottlenecks and real product profitability. ➡️REGISTER FOR THE WEBINAR
TEXT: Natália Stašíková
PHOTO: TOCEU, Ľubomír Klieštik, IPA