Operational Efficiency
Categories: Metrics, Company Management
See: Operational Risk. See: Operations Management. See: Operational Target.
In manufacturing, the magic elixir is operational efficiency. It’s not about making one six-pack of diapers for 80 cents; it’s about being able to make a million of them a month for 80 cents, where the factory doesn’t burn down, nobody gets hurt, and the market for diapers stays, um, hot.
How do you maintain efficiency? A zillion little things. Is the plastic being fed into the diaper stamper at the right temperature to run smoothly? Will the influx of high end humidity going to mess things up? Is the loading dock picking things up on time? Any murmurs of a strike out there?
Yeah. Any one of these and 87 other things goes wrong, and all of a sudden,the cost goes from 80 cents to 93; profit margins evaporate, and you go bankrupt.
Welcome to the real world. How’s it feel?