AAOM Handbook

[OFFICIAL]

INTERNAL USE ONLY

A scenario that the accountable roleholder wants to test through the model is referred to in this manual as the base-case scenario as represented by changing input parameters in the model. This is done to set future performance targets that will meet business expectations in an Operation (LoW4) model and to select strategies to meet performance targets in a Process (LoW3) model. The original state that is based on historical data is known as the base-case scenario. Once the accountable roleholder has tested scenarios through the model, the base case can be overlaid with the improved scenario to model the impact that the improvement will have on the output as depicted in Figure 6 below. The accountable roleholder can then re-look atthe overlapping calibrated histogram graph and take note of how the constraining process has shifted in terms of effectiveness and efficiency. It may still be the same process that is the constraining process, or it may change to another process depending on where the constraint should lie by cost-effectiveness when improvements have been fully exhausted. Once an improvement scenario has been tested through the model, the accountable person needs to decide and investigate further how to implement the scenario and model the potential outcome of its implementation. A trade-off assessment between improvements in output and cost to implement improvements needs tobe done by the accountable roleholder. The selected scenario will be detailed out in Production and Service strategies and the activities to be implemented to realize the scenariowill be included in the Operating Master Schedule and the Expenditure Schedule.

Figure 6 – Base case IS vs Improve scenarios The value stream BSP model considers both upstream and downstream processes in the value chain allowing monitoring of process outcomes and final product. It allows viewing and understanding up-stream and downstream consequences of strategies. The value stream BSP models performance of interdependent processes with variation. Considering both dependent and independent variability within processes and how it can impact immediate processes and buffer levels (buffers require specifications LSL and USL) is essential in understanding final outputs in the value chain as shown in Figure 7 below.

Operational Planning: Building a Business Structure Performance Model Page 35 of 39