Efficiency frontier
theoretical perfect state
impossible to achieve
Unfortunately, the star is a theoretically perfect state,
which is worth striving for but impossible to achieve
to reach the star requires perfection
- customer’s present and future needs
- flexible and reliable resources
obstacles
- variation in demand
- perfectly predict (what, when, which amount)
- variation in supply
- perfectly flexible resources (what, when, which amount)
- perfectly reliable
impossible to reach an operational state beyond the efficiency frontier
defined by level of variation
the efficiency frontier is pushed inwards as variation increases
The better an organization at developing capabilities to handle the two conditions
- predictability of demand
and
- flexibility and reliability of supply,
the further out the organization will move towards the star in the perfect state
(src: Model: Efficiency Matrix)