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Wednesday, November 15th 2006

9:01

The Benefits of Measurements

Many processes can be managed by just observing and asking good questions. In fact, if your processes are not able to be understood by observation, you might want to consider some simplification.

On the other hand, in order to engage in any continuous performance improvement you must have measurements to gauge your improvement. When you measure you will also gain the following.

  • You will get to know your own strengths.
  • Measuring will give you more finely grained financial measurements.
  • You can create common goals and objectives.
  • You will have information to document common processes.

MESA International did a study earlier this year called "Metrics that Matter" to learn about how manufacturing organizations use shop floor measurements. The public version is available here. (You have to be a MESA member to get the full study.) The study divides those that participated into two categories. The "Business Movers" improved significantly in the 11 business/finance metrics that Industry Directions (the consulting firm who performed the survey) used to create the survey. These organizations also shared other attributes:

  • They are 67% likely to be more effective at presenting business information.
  • They are 50% more likely to have automated data collection.
  • They are 2.5 times more likely to have metrics in the hands of operators in < 24 hours.
  • They are 43% more likely to present results much sooner than quarterly (weeks or days).

You might expect some of these results, but these organizations also showed significant improvement in operational measures such as: quality, customer service, throughput, flexibility, compliance, asset utilization, and inventory reduction. Also reported safety incidents were lower and on-time delivery rates were higher in those organizations.

I think that this goes to show what I have seen working with our clients. Excellent organizations will train and motivate their people to take objective measurements and use these to improve the organization. How are you doing with your measurements?

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