Category Archives: Metrics

Why Do You Model?

The first question most executives ask when I explain how we organize an improvement project is along the lines of “can we skip the process modeling?” They either believe all the processes have already been modeled or they know their employees are saturated from all the modeling or other consulting efforts. The reality is that I rarely find off the shelf materials (process and metrics models) that I can use without significant rework. In this article I want to make a case to model less, not more. Let’s start with why you model.

Modeling for the purpose of modeling. Companies exploring process optimization tend to start with a company-wide modeling exercise. “You can’t fix, what you don’t understand, so let’s document all processes in the company”. Over time this becomes a burden to the modelers and the business. Processes change constantly, therefore the documentation ages quickly. This repository requires a large group of modelers to create and maintain. A typical characteristic of this type of modeling exercise is the process fatigue described in the introduction.  Continue reading

What Are Your Standards?

After speaking at a Six Sigma conference I was asked what my definition of what supply chain management is and how it differs from Lean Six Sigma. The topic of my presentation was how to identify important change programs. I am not sure what exact wording I used but I must have first stated that I am not a Lean Six Sigma expert, only a Six Sigma customer, but my observation was that Six Sigma did not seem to use standards. My definition must have included process measurement, modeling and change planning.

For me supply chain management started 5 years ago with a request to join a group of individuals traveling to Minneapolis who were going to be trained in SCOR. The training experience was both positive and negative. The positive aspect was and remains the standard definitions for processes and metrics. As a former reporting manager I have spend many meetings explaining why we adopted a certain set of metrics and then sat through the arguments of what the definition should be according to such-and-such. Today whenever somebody asks the question how to measure an aspect of the supply chain the response is simple:  Continue reading

How Are You Being Measured?

In a previous life I was in charge of management reporting for the pan-European logistics organization for Compaq. My team was responsible for monitoring and reporting the daily, weekly, monthly and quarterly performance and progress of the operations. We provided reports on shipments-to-date, invoices send, estimated shipments for the remainder of the day, week or month, order cycle time and average shipment lead-times, and on and on. None of these metrics would keep me awake at night or would cause heavy discussion on accuracy and validity of the metric. That was reserved for one metric: “Predictability”.

Predictability was our #1 metric for customer satisfaction. It also had all the characteristics of a badly chosen metric:

  • No real ownership (read: accountability)
  • Nearly impossible to root-cause
  • Home-grown, thus no realistic benchmarking information
  • Multiple interpretations (shipped v. delivered, factory v. logistics)
  • Everybody was impacted by it’s poor performance (as it was linked to profit share)
  • And maybe most important: Unclear value to the customer

Recognize this type of metric? Continue reading