• identify and analyze operational changes that might enhance ERM and inform equipment suppliers of these changes;

  • communicate ERM requirements in clear, operational terms;

  • support industrywide collection and analysis of standardized ERM data;

  • foster an understanding of enterprise optimization; and

  • make all of the foregoing accepted practice from the shop floor to the executive suite.

NOTES

1. Just-in-time (JIT) is a method of manufacturing by which parts and assemblies are made or delivered as needed, thereby greatly reducing inventory.

2. National Advisory Committee on Semiconductors. 1989. A Strategic Industry at Risk. Washington, D.C. November 1989.

3. In many companies, the capital approval process specifies different levels of authorization depending on the size of the request. Small investments (under $100,000, say) may need only the approval of the plant manager; expenditures in excess of several million dollars may require the board of directors' approval. This apparently sensible procedure, however, creates an incentive for managers to propose small projects that fall just below the cut-off point where higher level approval would be needed. Over time, a host of little investments, each of which delivers savings in labor, material, or overhead cost, can add up to a less-thanoptimal pattern of material flow and to obsolete process technology. (excerpt from: Kaplan, R. S. 1986. Must CIM be justified by faith alone? Harvard Business Review 64(2): 87-95.)

4. Kaplan, R. S. 1989. Management accounting for advanced technological environments. Science 245 (August 25): 819-823.



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