Get Visible Results With the Web-Based Metrics Solution

Metrics are used to measure the property or the current health of the company regarding the performance and other issues. They are not only used on business but can also be about other things such as software. There are software metrics that gauge the assets of a certain piece of software or it can be about its specifications. Meanwhile, metrics are often used in the world of business and now as technology becomes even more advanced, they eventually become even more powerful. The web-based metrics solution is among the most useful tools that a businessman can use today.

The web-based metrics solution allows the business owners to keep track on what is happening within their company even when they are not present in the workplace to observe. This is done by means of observing the measures that are seen as important to the success of the company. Take note that a company has different aspects to measure from another enterprise regardless of whether or not they are of the same industry. Therefore, one must know first about the demands of his own company so that he can define the metrics that he will use.

One of the benefits of the online metrics is that they help one know about the health of the company and its ranches. This is especially helpful for those who are managing a fairly large company since they will not be able to assess the performance of all the branches in the business for a day. In this case, the metrics tool is very effective. All you need is to be connected to the Internet and you will gain access to the important records that you need to view the current situation of your business in the marketplace. You will also be able to spot the problems that will possibly arise in the future. Thus, you are given the opportunity of stalling them if not preventing them from happening. In accordance to this, you will of course know the right solution by making the correct decision on the current issue.

The web metrics tools are very helpful but you should remember that their efficiency still lies on your hand. This is because the first step into obtaining the successful and working metrics and probably the most crucial is when you select them. It is easy to keep track of them when you have already chosen or established them in your company. However, the hard part is when you select the right ones for the business. Ensure that you have done some research before proceeding. This is why there are a number of companies that choose to have metrics case studies so that they will be able to really pick out the metrics that will provide value and productivity in their business.

After the selection, you can now use a reliable web-based metrics solution which will be used by the entire organization. Make sure that you have chosen one that is extremely flexible and can help you in the implementation of the metrics that you have selected.

Establishing Lean Metrics – Using the Four Panel Approach as a Foundation for a Lean Scorecard

As you start the journey to becoming a lean thinker, it won’t be long before the need to develop a data based reporting system becomes apparent. The concepts and practices that are collectively known as lean manufacturing are not difficult. In fact, they are often deceptively simple. But given the demands of managing a business, it can be challenging to maintain momentum over the long haul. When your data reporting system supports the lean concepts, it will be easier for you to stay consistent with lean principles. The Four Panel approach helps in developing this reporting system.

In their white paper “The Balanced Scorecard – Measures that Drive Performance”, Robert S. Kaplan and David P. Horton establish the need for a data based reporting system for managing the critical success factors for a business. “No single perspective paints a comprehensive picture of a company’s health. You need an approach that balances several perspectives and provides measures that enable you to track performance.” 1

A management reporting system asks you to think of your company’s mission and strategy from four key perspectives:

  1. How do customers see us?
  2. At what internal processes must we excel?
  3. How can we continue to improve and create value?
  4. How do we look to shareholders? 2

1. Establish the Categories for Measurement

We must organize our thinking into a framework to allow managers and employees to easily identify the critical success factors for the organization. With this framework established, it becomes easier to identify what metrics we need to use. Many organizations have so many metrics in place that management of the information becomes unwieldy. If you have dozens or even hundreds of metrics, then you need to step back and revisit your measurement plan, making sure that the critical success factors are clearly identified.

Typically manufacturing operations use five categories. If you are just getting started with your data based reporting system, you should start by using these five categories. They are field tested and effective, and they cover all four of the perspectives identified by Kaplan and Horton.

  1. Safety – maintaining a safe workplace
  2. People – development and retention of people who have the skills to deliver to the customer
  3. Quality – meeting customer, governmental, and internal requirements
  4. Responsiveness – are we responding to the needs of the customer?
  5. Financial Performance – are we making money?

2. Develop the Vision Statement

To make sure your metrics are in fact the critical success factors for your business, it is necessary to take time to think through exactly what needs to be accomplished. If you don’t know what success looks like, you probably won’t recognize it when you see it.

It is important that each of the five categories have a vision statement. To develop them, brainstorm phrases that succinctly define the stance you are taking on the category. Use those phrases to create a statement that clearly communicates to your customers, managers, employees and stockholders the vision. The statement need not be a complete sentence; it will be used to develop the goals, measures and strategy for this category. The vision statement should be established by the executive team or the corporate operations group and must be consistent across all manufacturing operations of the company or division.

3. Establish Goals

Pull the operations leadership team together and discuss the key processes that support or drive the vision statement, concentrating on the “Vital Few” that really make a difference. Establish goals by determining how the processes need to change or improve to bring them into alignment with the previously agreed upon vision statement. State the output of each of these critical processes and identify the level you would like to obtain.

If your company has multiple facilities, it is critical that the leader at each facility is included in the team to establish the goals. Without buy-in from local leadership, it is difficult to implement the system you are designing.

Process Examples

  1. Safety
    • OHSA Reporting
    • Hazard Identification
    • Ergonomic Management
    • Near Miss Identification System
  2. People
    • Training
    • Skills Assessment
    • Turnover Management
    • Employee Satisfaction System
  3. Quality
    • Defects per Unit (million)
    • Supplier Quality
    • Customer Complaint System
    • Rework / Repair Management
  4. Responsiveness
    • On Time Delivery
    • Customer Request Management System
    • Inventory Management
    • Field Service System
  5. Financial
    • Productivity
    • Warranty Cost Management
    • Investment Management
    • Inventory Management

4. Define the Metrics

Determine how the performance of the process will be measured for each goal statement. But think about how you will collect and manipulate the data – a good measure that is easy to chart is better than a perfect measure that requires a lot of work. The methods used to obtain, measure, and calculate data need to be clearly defined as slight differences can significantly change the reported results.

The metrics must be numerical targets. Absolute numerical targets, ratios or percentages all can be used. The targets can be constant across the year, variable by month, or they can be cumulative. For example, we may set a training target for a facility at 10 hours per associate for the year. But the training plan doesn’t call for the same number of training hours each month. If the targets aren’t set with this in mind, the measures will be out of control even while we perform exactly to plan.

Lean Metric Examples

  1. Safety
    • Reportable Incidents
    • Days worked without a lost time accident
    • Ergonomic Management
  2. People
    • Targeted Training Hours
    • Voluntary Turnover
    • Production to Skilled Trades Ratio
  3. Quality
    • Delivered Quality
    • Rework / Repair Cost
    • Customer Complaints
  4. Responsiveness
    • On Time Delivery
    • Manufacturing Lead Time
    • Inventory Turns
  5. Financial
    • Margin $
    • Manufacturing Space Used
    • Conversion Cost (Labor $ / Unit)

Metrics fall into two categories, results and drivers. Driver metrics can have a profound impact on the performance of a business because they provide immediate feedback on how a process is running. They facilitate immediate improvement and provide a tool to allow managers to immediately change the behaviors which are causing the issues. For example, a scrap metric will provide the operations team data on which product lines are producing the most scrap, allowing for direct intervention to drive improvements. Financial metrics on the other hand are generally results, as they report after the fact and are difficult to dissect to determine causes.

Keep this in mind when designing the metrics. With slight changes to the definition of the metrics, they can be changed from results to drivers. While data based reporting systems have both result and driver metrics, the most effective systems have a driver to results ratio of 4:1.

5. Plan Your Strategy

For each goal, establish at least one strategy statement, describing the major process changes and improvement efforts. Put some urgency behind the strategies by setting deadlines or target dates for implementation.

A data based reporting system won’t improve your results. It is just a tool which can make the difficult task of running a business a little easier. The strategies that are deployed to drive the improvements needed are how the actual gains are realized. Without a sound strategy to make the changes required, it is unlikely that really significant gains will be had or maintained in the long run.