CHAPTER 5BUSINESS AND FINANCIAL ELEMENTS

Today's operating, process, and manufacturing environment is characterized by increasing intensity, more restrictive constraints, and huge pressures to reduce costs. All necessitate more concise, value-oriented methods to identify opportunities for improvement, prioritize and align activities, and to measure and continuously improve results. Identifying value requires a model that provides an accurate and objective means of calculation for the specific business/mission and external environment of the operating enterprise. The business/financial model introduced in this chapter is primarily designed to provide a means to calculate the value of essential methodologies and potential improvements to prioritize opportunities, justify investments, and financially credit results gained by Operational Excellence. It is designed for profit-making enterprises; the principles can be adapted for mission-oriented enterprises.

CONNECTION TO BUSINESS RESULTS

Technology and practice have developed to a level capable of recognizing most anomalies and defects in time to prevent outright failure and minimize unscheduled operating interruptions. However, measures of effectiveness have tended to remain subjective and intangible: do processes, systems, and physical assets perform as required, when needed, at design efficiency? Are unexpected failures and operating interruptions few and far between? Are problems corrected promptly; are operations/manufacturing ...

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