Fundamental Intrinsic Theorem Manufacturing (FIT MFG) is the most powerful yet practical cash flow and EBITDA maximization tool ever developed. Based on 10 intrinsic orders and the interaction between these orders to arrive at the optimal solution to any activity/time based situation. FIT MFG focuses on the scientific interplay of any complex-interdependent system, which includes manufacturing, supply chain, distribution, logistics, retail, and really any business or non-business related complex system. FIT MFG focuses on optimizing the entire system rather than attempting to optimize sub-systems within the global system. FIT MFG considers time as the most valuable resource within any system because it is the only resource that you can't “get back” once consumed. FIT MFG also manages and channels the entropy (potential energy) of the entire system leading organizations to the highest level of both earnings before interest and tax (EBIT) and cash flow returns mid- and long-term. When followed correctly, this system is infallible, being governed by the laws of physics.
Time is the only independent variable in FIT MFG. It focuses on maximizing the use of time for all evaluations. Time is the great unstoppable and unchangeable force, always moving forward and winning in the end. Maximizing the highest level of value in measured increments of time over the maximum amount of time is the sole goal of FIT MFG. Always remember—time is the only resource an organization can never get back.
FIT MFG evaluates the current and future state of entropy for a system, maximum current and future focused entropy state, and identifies misdirected or misappropriated entropy. This tool looks at how much potential energy is consumed to produce a desired outcome. Entropy is the second law of thermodynamics and demands that waste is produced as a byproduct in order to perform work—meaning there is waste in every system. The key is to channel the consumption of potential energy into mostly value creating work. Unmanaged entropy poses major risk to any organization.
FIT MFG categorizes the degree of complexity of a system by evaluating both the current and future achievable value generation of the system. FIT MFG works to find the optimal value proposition (state of health) by driving the system to its greatest state of positive disequilibrium while still maintaining control. FIT MFG works to focus the greatest production of value while using the lowest range of entropy, creating the maximum long-term value to cost delta.
Organizations in all environments are flooded with choices to make (trade off) that will yield different outcomes, improving or reducing the overall health of an organization. Fight or flight is an example of intrinsic trade off. Many organizations mortgage long-term overall health in lieu of short-term gain that negatively impacts the long-term health.
Ensuring your business is in the right environment is key to long-term organizational survival. FIT MFG evaluates and adjusts the organization to threats, pitfalls, organizational adaptability, opportunities, and changes regarding the environment where the organization lives. The ability to foresee and adapt to environmental change is paramount to an organization's success.
FIT MFG determines the overall health of the organizational structure/makeup, also known as the organism. It evaluates both health and interdependency/synchronicity of the central nervous system, cardiovascular, independent organs, diet, and external environment to achieve optimal performance.
Distributions are intrinsic to all processes. Every distribution is a measure of unmanaged entropy within a system. The greater the variation, the less control one has over unfocused or misdirected entropy. If an organization needs to fix a sub process with high variation, it must draw and consume potential energy from another sub system. Many distributions found in organizations aren't normal distributions and possess an entropy (Murphy’s) tail. Most distributions in sub processes are irrelevant in the success of the overall system and often receive unwarranted attention, resulting in wasted time and money.
FIT MFG looks at the relativistic viewpoint of events both internal and external to an organization. For example, a quality spill will be viewed differently by a quality manager and a production manager. Both are observing the same event, however, view it from a different angle. It takes understanding of multiple viewpoints to get an accurate understanding of the event to find the best way forward to react, improve, and leverage the event.
Cycles are naturally recurring intrinsic orders that command attention and certain reactions. Cyclical patterns occur in almost every aspect of life and business. FIT MFG evaluates these cycles that impact organizations and drive reactions that protect and enhance the organizations ability to leverage these cycles.
All good things must have a beginning and then do something great, but all good things must come to an end. This is the intrinsic order of life cycle. Life cycles spring from the fight between complexity and entropy. The mortality rate for all living organisms is 100% given enough time. FIT MFG evaluates where an organization is along the life cycle time continuum and defines the appropriate action to take, even if that means the death of a product line or industry group.
Proper leadership and treatment of suppliers, internal partners, and customers is intrinsic to the success of any organization. This fundamental may be the most important, though it's often lost. How leadership interacts, treats, and leads an organization will ultimately determine its outcome. FIT MFG takes a deep dive into the health, welfare, and interactive processes in an organization and works to adjust them to achieve ultimate results. By driving proper interactions with all internal and external members of an organization, the organization has the best opportunity to drive maximum value over a very long life cycle.