Metrics Always Win

Over the past two weeks I have had the pleasure of meeting with senior executives from a variety of companies in training situations where we could talk freely and discover opportunities within their businesses for improving their supply chains. SCC trainings—particularly in-house private trainings – take a practical, hands-on focus to supply chain improvement. Managers frequently leave the trainings with specific ideas and improvement programs laid out and ready to go.

I have to admit that I was impressed by the progress that one company had made. I worked with their managers on some training programs back in 2002. I remember speaking with their senior v.p. of supply chain at the time, and helped their supply chain team begin to focus on differentiated SCOR KPIs, ownership, and measurement systems. I was surprised then that a company of its size hadn’t institutionalized balanced scorecards, cascading supply chain metrics, and detailed controls. At the time my experience had mostly been within high-tech companies that had the resources to invest in such specialized tools.

During one of the recent trainings I became aware of exactly how much progress this company had made, and how deeply SCOR had penetrated—almost disappearing within the organization—to become part of their standard management processes. Using Business Objects they had built a data warehouse with near real-time metrics for all key SCOR KPIs by line of business on top of their SAP instances. I was blown away by the detail that they were beginning to have for cash cycle time, reliability metrics, agility and other KPIs. I haven’t seen such sophistication outside of the top five percent of companies using SCOR.

Somewhat of a “stealth” project, the SCOR KPIs and dashboard project at this company illustrated one of my key words of advice to organizations: the group that owns metrics wins. This is especially true for those organizations that use standardized metrics like those defined by SCOR. They can find and help solve issues. They can provide credible, authoritative advice. And the maturity of management (CMMI Level 4, I believe) creates reverberating value throughout the organization in ways that nobody can anticipate. This company is fully prepared now to roll out SCOR companywide as a standard management practice backed up by metrics, methodology, and management support.

I suppose that’s ultimately the full circle of evolution for many SCC members. SCOR starts as a “not invented here” idea, gradually gets adopted across the organization (either bottom-up or top-down), and then is slowly relabeled as the company’s processes, company KPIs, and company methodology. It disappears, and later re-emerges, and their Council membership then becomes a source of renewal. I fully expect to see SCOR disappear entirely within that company over the next five years as it becomes part of their standard management practices.

I only wish that all companies had their metrics under such control. To me it’s the biggest supply chain maturity differentiator.