ABSTRACT
Overview Highly competitive organizations focus on increasing productivity and shareholder economic value added (EVA). ey align organizational resources to achieve their strategies in the context of a highly competitive global environment. ey always ask questions that bring them closer to their competitive goals and objectives. Invariably, their behavior is driven by metric analysis. e key to the identification of operational improvement opportunities is the analysis of financial and operational metrics. Metrics provide a focus for resource alignment and ensure an organization works on things that will increase its competitive position over time. However, there are probably thousands of metric variations across organizations and industries. ese can be either aggregated into higher level classifications, such as time, money, or quality, or condensed into basic lists that almost every organization uses to manage their business. In this chapter we will present the 20 key metrics listed in Table 1.4 as typical in operations management. However, the effectiveness and efficiency of deploying these 20 lower-level metrics, in an aggregated and integrated manner, are better reflected using higher-level measures of organizational performance, such as those listed in Table 7.1. ese include shareholder EVA and
productivity metrics that are the subject of this chapter. Our goal is to show how these higher-level metrics are calculated and then disaggregated to identify and strategically align improvement projects that will enhance operational performance for your organization. In other words, our goal will be to ensure that an organization’s resource allocations will be more effective (doing the right things) and efficient (doing them well).
