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The Value and Nature of Measurements

By Denise Hansen, CPIM, CSCP | N/A 2012 | 7 | 6

It is said, “That which is not measured is not improved.” This may be true; however, it is vital to keep in mind that the mere act of measuring does not necessarily produce improvement. Measurements are a go/no-go gauge for the wellness of operations and our personal actions, but they produce nothing. 

The goal of any business is to succeed. As such, our mandate should be to make the best product (or offer the best service) at the best price, as sustainably and safely as possible__and in the process satisfy and increase our customer base. A fundamental tenet in lean manufacturing is the elimination of waste. Non-value-added activities rate high on the list. We all are customers as well as suppliers and thus should evaluate our outputs and performance from the customer’s point of view. When examining these tasks, we must ask ourselves the following:

  • Is the task being done this way because it always has been?
  • Is it necessary at all?
  • Can a particular task be reinvented to reduce its time or cost?

Most of us have tasks that are not directly value adding, but necessary to sustain a critical process. These are the undertakings that should most closely be evaluated for improvements. 

Where to begin

At work, we are surrounded by every scorecard, dashboard, chart, pivot table, multi-blocker, and graph known to humans. The positioning or description of the inputs is constantly revamped, redesigned, reevaluated, and retagged__but, at the end of the day, month, quarter, or year, the indicators still can point to the fact that the organization has not improved.

While the customer may in principle appreciate great processes, they soon will be disenfranchised if performance doesn’t support these things with high quality and superior service. Ultimately, our customers have no interest in pie charts, pivot tables, graphs, meetings, presentations, or any of the internal noise we create. They are only interested in what percentage of orders are on time, in good condition, and exactly as requested__and in what they perceive as a good return on investment. Therefore, it is imperative to eliminate all that does not help us stay close to this target. 

It is critical for businesses to rediscover a balance between “doing” and “meeting.” There is a limit to what the market will bear, and it is imperative that we eliminate all that does not help us stay very close to the lower control limit, thus enabling us to maintain the flexibility to trend upward to the median without ever hitting the upper control limit__lest we be put out of business.

The best strategic maneuvers in the world cannot be implemented without an adequate, well-provisioned, and well-trained tactical force__just as they cannot come to fruition without the right number of bright, creative, well-educated, and provisioned strategists. An excess in either of these forces will lead to failure of varying magnitude. 

Having said this, let us step back and marry thought and technological advancement with an honest work ethic and efficient output, then reconsider our individual outputs in light of what they actually produce. Consider the following questions with regard to any tactical or strategic change to your organization:

  • Does it shorten time to market?
  • Does it increase the value of a product for the customer?
  • Does it improve quality? Does the voice of the customer agree?
  • Is it realistic, feasible, and sustainable?

Once you begin down this path, you can take the questioning to the next level: Are we littering the path to success with non-value-added gilding? Is the meeting we scheduled one that will present a measurable improvement to our customer offering or that is needed to immediately address a shortcoming in the eyes of our customer? Is the new process that we implemented going to remove roadblocks from the tactical forces so they can achieve necessary improvements? Did we implement a process or measurement that actually is a roadblock to finding a solution, expediting an order, or pleasing and maintaining a customer? Are we boycotting value-added outputs by tasking our tactical forces with strategic support data entry that ultimately sabotages their ability to complete the crucial tasks within their function? 

It is imperative that we assign the correct value scale to various functions. An output that adds directly to the bottom line generally should take precedent over an output that only feeds internal measurements. 

Strategists and tacticians

If an order goes late because a key team operator was involved in a meeting or tasked with completing any one of a number of scorecards, we have missed the mark. Similarly, any function that takes away from direct customer satisfaction is unfavorable. And if a team operator is suddenly tasked with keeping track of every single step of the outputs and providing justification for every miss, productivity suffers, and measurements will reflect this downturn. 

All of this over-measuring ultimately can have a negative impact on the team climate. As so much operational efficiency is lost in the quagmire of excess documentation, the only things that roll down to the tactical team are negativity and failure. They are not only communicated verbally in meetings, but also posted everywhere and are constant visual reminders of disappointment. This generates more anxiety and frustration, hence reduced productivity. The snowball of decreasing productivity and efficiency is definitely not part of the goal. 

Let the strategists execute what they are best at and the tacticians carry out their own singular roles. Allow tactical teams to excel, and the entire organization will succeed. Overwhelm your tactical team with strategic by-tasks, and you cripple their productivity. Bring strategic thought back into the fold to concentrate on the real roadblocks, opportunities, and execution strategies that are sustainable in the real world. With your tactical team poised to achieve strategic goals and successes, this will become the status quo and your business will enjoy clarity and unity of purpose.

Denise Hansen, CPIM, CSCP, is senior buyer for Philips Lighting North America Outdoor Group. She may be contacted at dhansen2@grandecom.net.

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  1. Lauren Rutley October 30, 2012, 01:41 PM

    Great article on the value of metrics via scorecards and dashboards, but within reason. Excess documentation is not going to help productivity, but in Operations (especially my area which is sales & marketing operations), all things do need to be measured in some way. Nice article, Denise!

    - Lauren Rutley
    Marketing Manager, Visual Mining


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