Practical tools you can use now
Understand how flow, capacity, and throughput turn into profit.
These short courses make the economics and operating logic of a fabrication business easier to see. Start with the question that matters most to you.
Choose the question in front of you
You do not need to learn everything at once.
Each path is useful by itself. Together, they show why local efficiency, job margin, labor utilization, and company profit do not always move in the same direction.
What does it take to break even?
Turn operating expense and gross margin into a useful sales target.
Watch the mini-course → 02Product mix and capacityHow does a fabrication shop make money?
Follow P’s and Q’s through a four-part example about mix, constraints, and investment.
Watch the four-part course → 03Whole-system decisionsWhy can every job look profitable while the company is not?
Learn the basic logic of throughput accounting and labor productivity.
Explore throughput basics →Break-even mini-course
Begin with the financial line your business must cross.
Mark Phelps walks through how to calculate break-even and connect operating expense, gross margin, and the sales required to cover the cost of running the business.
Four-part mini-course
How your fabricating shop makes money.
A simple P’s and Q’s example reveals how product mix, the constraint, improvement choices, and capital investment affect total profit.
The curious case of P’s and Q’s
Start with two products and a deceptively simple question: what is a good product margin per job?
Which work should the shop pursue?
Compare P’s and Q’s in different markets and see how limited capacity changes the economic answer.
Which improvement will actually matter?
There are opportunities everywhere. Rick Phelps shows how to identify the one that can improve the whole system.
Will new equipment create more profit?
Test an investment at the constraint and see whether additional capacity changes the result.
Throughput basics
Move from allocated cost to whole-system economics.
These introductory lessons explain why conventional measures can point managers toward choices that look efficient locally but weaken the financial result of the business.
Why did the profit disappear?
If every job appears to earn a margin but the company still struggles to make money, this is the place to begin.
Before you cut labor, look at the system.
Understand how labor decisions affect flow and explore an alternative to reducing the capacity the business may need.
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