As you journey toward world-class manufacturing performance, take time to re-evaluate how you’re measuring progress. Metrics, of course, work as road signs to guide you or as flashing lights that warn of needed course corrections. But it’s easy for your metrics lineup to become bloated.
Regularly weed out complex, time-consuming metrics and activity spirals that fail to yield key information about crucial results. And take heart: 86% of industrial companies recently surveyed don’t even have a corporate analytics program that includes manufacturing data. If you do, you’re already a step ahead.
To make metrics meaningful, consider these ideas.
Take a fresh look. Are you focusing on the right targets? Michael Bremer, president of the Cumberland Group consulting firm in Chicago, cites strong metrics as one of five components missing in many company improvement plans. Good metrics ignore irrelevant details, as Bremer describes in the book he co-authored, “Escape the Improvement Trap: Five Ingredients Missing in Most Improvement Recipes” (CRC Press). His firm is founded partially on the principle that “performance metrics can do almost as much harm as good if not developed carefully and adjusted as the business changes.” In his book, he urges business leaders to use critical-thinking skills to examine an organization’s goals within their industries. Then they can determine how to best track success.
Get buy-in from the whole organization chart. Manufacturers often employ a range of performance measures, such as on-time delivery, quality, yield, capacity utilization and overall equipment effectiveness. Ideally, senior leadership should sort out the most critical metrics and communicate them to the people doing the work. Associates will work out how they can make day-to-day changes that nudge performance toward higher levels. Employee buy-in for better individual performance increases as they learn how their actions affect overall organizational performance.
Set specific, actionable goals. To help associates readily link their actions with corporate goals and improve overall metrics:
An integrated approach to manufacturing metrics helps employees align job performance with the company’s targets. Mark Davidson, in an LNS Research blog, advocates for developing goals that are SMART — an acronym that stands for specific, measurable, actionable, realistic and time-based. Thinking about those attributes can help you develop metrics that serve as true indicators of overall performance and how it connects to company goals.
Continue the quest. The need for change and for improvement never stops because customer demands and market shifts will always evolve. Davidson points to the need for “sustainable metrics” that continually require examination. He describes a cycle that goes from assessing performance and setting goals to creating an action plan, implementing the plan, evaluating the plan and recognizing achievements — all before you assess performance and set more goals!
So continually revisit and update your company’s goals and related strategies and metrics. The cycle of learning will help nurture innovators and problem-solvers within your organization, creating the potential for continued, measurable progress.
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“5 Real Surprises From the 2016 Metrics That Matter Research Study,” Greg Goodwin, LNS Research blog, April 28, 2016 (found here: http://blog.lnsresearch.com/5-real-surprises-from-the-2016-metrics-that-matter-research-study)
Michael Bremer and Brian McKibben, “Escape the Improvement Trap: Five Ingredients Missing in Most Improvement Recipes” (CRC Press, Taylor & Francis Group); available at www.amazon.com
“28 Manufacturing Metrics That Actually Matter (The Ones We Rely On),” Mark Davidson, LNS Research blog, Oct. 9, 2013 (found here: http://blog.lnsresearch.com/blog/bid/188295/28-manufacturing-metrics-that-actually-matter-the-ones-we-rely-on)
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