Do Your Operational Improvements Help Your Income Statement?
 

I recently had the pleasure of having a virtual meeting with process experts Gordon Adelsberg and Timothy Van Mieghem about the disconnect between the language spoken in Operations and that spoken in Finance.

Something as significant as “We increased throughput by 10% and OEE (Overall Equipment Effectiveness) by 12% can be met with, “So? What does that mean to the bottom line?” For instance, does that extra throughput go to filling customer orders, or filling shelves? If it’s the latter, your translation into dollars just might be incorrect. If the result is too much inventory, your working capital needs could bankrupt you! 

As a result of our chat, Gordon wrote a fantastic article - "I’m Bi-Lingual. I’m Fluent in Safety Boot and Wingtip" - that is certainly worth the read. Enjoy!
 

 

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