FORMULA 8. The value of re-engineering a process
Cost of old process E â e = avpy cost of new process (plus change costs) = added value created per year.
In the example given, the process time was 7.5 hours (that’s just the elapsed time value)
7.5 hours × Â£46.00 × 226 = E £77,970
The best concept for this process
1 hour × Â£46 × 226 = e £10,396
Formula
E £77,970 â e £10,396 = £67,574 avpy (added value in 1 year)
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