EVA — Economic Value Add

EVA — Economic Value Add — is the single dollarized metric that captures the value of a plan across the seven KPI families plus risk. Not service alone, not margin alone, not working capital alone — all together, in one defensible dollar number the CFO can take to the board.

Eight components compose EVA. Margin Contribution (revenue minus realized cost-to-serve, via the pegging cascade). Service-Driven Revenue (the dollarized impact of meeting or missing customer SLAs, priced against contract terms and stockout-recovery cost). Cash Flow Value (time-weighted cash flows, NPV-style — when the dollar arrives matters as much as the amount). Carbon Cost (scope 1/2/3 emissions monetized at the customer's chosen carbon price). Customer Priority Score (the dollarized impact of allocation choices across customer segments — strategic vs spot, contract vs open). Plan Stability Score (the cost of churn — every replan-induced expedite, every cancelled commitment, every supplier-relationship damage). Working Capital Score (cash trapped in inventory, dollarized at the customer's cost of capital). Risk-Adjusted CVaR Term (the conditional value at risk in the lower tail of the EVA distribution — penalty applied to plans that look good in expectation but collapse in bad scenarios).

Each component is dollarized at the component level — no percentages, no weighted indices, no normalization tricks. Just dollars. The CFO can interrogate each independently: "show me where the margin is coming from." The audit trail flows back to specific decisions, specific order lines, specific events. Defensible at every depth.

A single plan run against the joint sample produces an EVA distribution, not a point. The mean EVA is the headline; the P5 EVA is the tail risk; the P95 EVA is the upside. The CFO sees all three. The deterministic operational plan commits at the risk posture's percentile, but the underlying distribution is always available — and the CVaR term in the EVA composition encodes the cost of tail outcomes back into the headline number, so a "good in expectation but catastrophic in P5" plan scores worse than its mean alone would suggest.