When discussing the term “metrics” or “performance metrics,”we are referring to the approaches businesses take to gauge or measure performance. Metrics are often used to determine whether a company is or isn’t making its objectives and goals and often serves as a platform to identify areas in need of improvement. However, it is important to remember that the results of metrics are not the one and only answer to all of a company’s pitfalls, but should be used more as a guiding tool to help understand which areas need to be revised or enhanced. In order to collect accurate metrics, a business must make sure that all areas are collecting metric information, for example, the IT department should be tracking and recording metrics just as the sales team would. All values collected share helpful information regarding that department’s successes and downfalls.
Performance Metrics vs. Diagnostic Metrics
Metrics can basically be broken down into two separate categories: performance and diagnostic. When looking at performance metrics it is easy to see that they are often linked closely to things such as customer satisfaction/requirements, overall outputs, and process business needs. This type of metric measures an overall performance and is very external or peripheral. While on the other hand, diagnostic metrics are more internal and focus in on the different internal processes and inputs. Diagnostic metrics concentrate more on why a particular process is not meeting expectations. When evaluating both types of metrics it is important to consider the big picture and to not take random metrics from different areas or departments and analyze them as just that. Too many metrics is not good, and too few metrics is not good either. Metrics should be aligned with business goals and objectives and be measured in ways that are clear, concise and orderly so information is not lost in the hustle and bustle. Think more along the lines of streamlining metric information, while keeping the end objectives in mind.
How to Jumpstart the Use of Lean Metrics
If you want to start working towards enhancing your metrics with the help of lean thinking, there are many options out there to research and potentially implement. For example, many companies have chosen to start-up Six Sigma programs which emphasize the need for process improvement through setting high objectives and by identifying and eliminating process defects. The implementation of a six sigma program would help to enhance customer satisfaction and increase the health of metrics as well. In fact, Motorola, a popular telecommunications company was able to save a reportedly $15 billion dollars using the help of six sigma processes within a span of 11 years. Another worthwhile tactic to improve metrics is to employ the help of 5S. 5S is a concept that originated in Japan which focuses on workplace organization to improve both efficiency and effectiveness. The 5S methodology has been put into use across the globe and remains one of the best programs for employee safety and overall effectiveness. The application of one of these methods will definitely help to improve processes within the business itself, as well as help guide towards the goal of lean metrics.
- Motorola’s Six Sigma Program
- Using Quality Objectives to Drive Strategic Performance Improvement
- An Overview on Six Sigma Technique
- Lean Manufacturing: Commonly Asked Questions
- Six Sigma Manufacturing : Waste Reduction and Process Enhancements
- Strategic Planning with the Hoshin