Operational processes and supply chain perspective
Key performance question this indicator helps to answer
How effectively are we driving waste out of our processes?
Why is this indicator important?
Much of today’s obsession with the search for effective KPIs can be traced back to the emergence of Total Quality Management (TQM) in the 1980s, when manufacturers such as Xerox realised that Japanese competitors could sell goods at a lower price than it cost the manufacturers to make them. Investigations uncovered that this was largely the consequence of Japanese companies successfully applying the principles of TQM.
A key principle religiously applied was that quality should be built into the process ...