TL;DR. Illustrative example, fictional plant: one filler lost $42,000 in a quarter. The team ranked it first, named an owner, fixed the cause and checked the result on comparable runs. Finance signed off $31,000. This post follows the number through each step, so you can see what each tier of money means.
All figures below are illustrative. They show the shape of the journey, not a result from any real plant.
What was the loss?
The fictional plant bottles juice on three lines. In the quarter, Filler 2 recorded 1,400 minutes of lost running time.
That is the observed fact: minutes, not dollars. Two people reading the same records would agree on it.
The plant’s usual meeting had listed twelve losses that quarter. Filler 2 was one of them, and not the loudest.
How was it priced?
Finance supplies a contribution rate per minute of running time on that line. Illustrative assumption: $30 per minute.
1,400 minutes at $30 gives $42,000. Because the rate is an assumption, the plant shows a range: $35,000 at $25 per minute and $49,000 at $35.
This is estimated money. It is good enough to rank the loss, and it is labelled as an estimate everywhere it appears. For the fuller story of the tiers, read three tiers of money.
Why did it rank first?
The next largest loss was $6,500 in the same period. Filler 2’s loss was also recurring, appearing in eleven of the thirteen weeks.
Size and recurrence together made the choice easy. The Monday meeting took ten minutes to agree it, and spent the rest on the plan.
Who owned it and what did they do?
The meeting named the maintenance lead as owner, with a due date six weeks out.
The owner found that the stops clustered after one particular bottle format. The cause was a worn part in the capping station. It was replaced and the setting checked.
The system’s role at this stage was to draft the next step and the owner note, with the evidence attached. The owner edited and approved both. A person decided.
How did they check it held?
The team did not simply compare this quarter to last. Last quarter had more runs of the difficult format.
They compared like with like: runs of the same format, with a similar number of changeovers. Illustrative result: loss per run of that format fell from 21 minutes to 5 minutes.
Applied to the following quarter’s comparable runs, that corresponded to roughly 1,050 minutes recovered before adjustment.
What did finance accept?
Finance reviewed four things: the original loss, the action and owner, the like-for-like comparison and any adjustments.
It removed one planned shutdown that had inflated the baseline, which cut the recovered figure to about 1,033 minutes. At $30 a minute that is $31,000, for the period actually observed, not annualised.
Illustrative result: $31,500 before adjustment, $31,000 confirmed by finance. The remaining loss stays open on the list.
What does this look like on the evidence ladder?
The saving moved through four states.
- Observed. The 1,400 lost minutes were counted.
- Adjusted. The planned shutdown was removed from the baseline.
- Supported. Loss per run on comparable runs fell.
- Finance accepted. The controller signed $31,000.
Only the last figure goes into the ROI calculation. The $42,000 was never ROI. It was the size of the problem.
What would you notice as a reader?
Three things stand out. The confirmed number is smaller than the loss, which makes it more credible. The estimated range was shown before the fix. And nobody argued about the quarter’s total, because each tier was labelled.
What to do on Monday
- Take your own largest loss and write down its observed minutes.
- Agree a contribution rate per minute with finance, and show a range.
- Name an owner and a date, then write the like-for-like check you will use.
- Decide in advance what evidence finance would accept.
- Report only the confirmed figure as return.