Performance metrics | What gets measured, gets done
Developed over thirty years ago and still popular today, the balanced scorecard is a management tool. It helps organisations measure their performance in relation to key aspects of their strategy, and vision. The concept has evolved over time and covers four business perspectives. Being: financial performance; customer focus; internal processes, and organisational capacity. Furthermore, key performance indicators and performance metrics reflect progress, focusing employee attention on these areas.
It is not uncommon for workers to be constantly re-prioritising their work activities. It is often said that what gets measured gets done. In general, it means metrics that have the attention of business tend to be those getting measured and improved upon by their employee teams.
In manufacturing, measuring, analysing, and improving metrics can be challenging. Whilst some metrics work well for specific jobs, larger business goals may need combinations of metrics. As a result. Schneider Electric has identified the 28 metrics every plant needs to monitor.
For aligning performance metrics to larger more complex goals, they use the SMART principle (Specific, Measurable, Actionable, Realistic, and Time-Based).
The relationships between high-level goals and the methods of achieving them is important. This falls under the ‘Specific, Measurable and Actionable’ are when metrics come into play. Any desired result must have a set of defined measurements, targets, and actions to “move the needle” on the metrics that are leading or lagging indicators of results.
In manufacturing, each major goal may need many metrics. This involves grouping the list of 28 metrics to achieve specific higher-level goals and objectives (e.g. increase quality).
The ‘Realistic’ element presents its own significant area of challenge. Leaders want teams to stretch and achieve more than they individually perceived as possible. Moreover, if goals are too lofty, and workers don’t believe they are achievable, they may give up and disengage.
Since every goal needs quantifying by a deadline or target, the ‘time-based’ aspect, it needs keeping everyone focused.
Sustainable improvements need a continuous improvement method, cycle that is never fully complete. Measurement and metrics are a central pillar of this continuous improvement cycle.
Identifying performance metrics
The MESA (Manufacturing Enterprise Solutions Association) organisation has sponsored relevant research over the past years. This helps manufacturers identify the most important metrics for their businesses. It promotes decision-makers understand of metrics improvements and their relationships to metrics programmes.
Finally, the high-level metrics grouped with the associated top-level area of improvement/goal for each, under improving:
- Customer Experience & Responsiveness
- Costs & Increasing Profitability
The most recent survey identified 28 metrics most used by a range of manufacturers, and are to be found on the Schneider Electric website
Go here for more information on Schneider Electric at 999 Automation
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