Equations relating production control effectiveness to total company performance

Abstract

Many factors affect the overall profitability of an enterprise. These include the quality of design, the ability of management and the level of motivation of the workforce.

This work describes how the effectiveness of control also affects the overall company performance. Extensive use is made of steady-state queueing theory in order to determine how variations in the interarrival and service time distribution of different functions within a company influence its total operation. Conclusions are subsequently derived from this analysis. These indicate the areas where a company should strive to achieve improvements in control effectiveness in order to gain the maximum benefits for the organization while generating a minimum of interference with the efficient operation of the enterprise. The equations resulting from the analysis have been deployod within two major engineering companies and for the examples covered, a marked correlation between theory and practice was found to exist.