AAOM Handbook

Purpose

To specify the confidence of meeting business expectations.

Quantity

The deliverables from setting performance targets shall include; • One set of flowcharts (a Business Structure) comprising Value Driver Trees and Value Stream Maps. • One set of performance targets for each element of the Business Structure. • One set of scenarios for delivery of performance targets. • One set of identified constraints and opportunities for each scenario. • One set of performance forecasts, based on evaluated scenarios. • One confidence level for achievement of performance targets. • One decision whether the Business Expectations can be met with the existing process and feasible scenarios for Production and Service strategy, Operating Master Schedule and Expenditure Schedule. The deliverables shall meet the following requirements; • The Business Structure shall be based on processes within the business that perform a distinct transformation, transfer or storage function. • A Value Driver Tree shall be used where performance relationships are dependent between levels but independent across a level. • A Value Stream Map shall be used where performance relationships are independent between levels but interdependent across a level. • A measured performance parameter shall be specified by a performance histogram. The target distribution characteristics shall be defined, or example, by specifying the minimum, maximum, mean, mode and shape factor of the distribution. • Performance targets should include; o Effectiveness, o Efficiency, o Sustainability, • A performance target may include the; o lower specification limit, o upper specification limit, and o target mean. • Each target must include at least a lower or upper specification limit. If any of the other two specification values is significant in evaluating the performance of the process it shall also be specified in the target. Quality

• For all performance targets except Asset Integrity – Performance forecasts made from the Operating Master Schedule (OMS) and Expenditure Schedule (EPS) modelling shall be developed

© McAlear Management Consultants 2006

Operational Planning: Set Performance Targets

Updated: August 2018

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