Tuesday, July 20, 2010

Metric Waste

“Metric Waste”
Do you have a ton of metric waste; an overabundance of key performance indicator (KPI)?
Many facilities today have become metrics collectors, never throwing away metric and generating reports with lots of data but no real useful information. It gets to a point in many facilities that they have full time equivalent (FTE) head count just collecting metrics data and generating reports. These metrics and reports may never be viewed or used to make business decisions or check on organizational progress.  Does this sound familiar? Let us look at a few points to consider when building a metric strategy.
Most levels of the organization can manage no more than ten metrics at one time. So, if you look at an organizational chart and assign your metrics, can you limit them to ten at each level? Some metrics will exist at multiple levels and you must keep that in mind as you complete this exercise. The best way to look at your metrics is to start at the top with the metrics that address the facility’s vision and purpose. Then your can tier or cascaded down from that goal forming a tree of metrics that measure what is important to each level. When you complete the cascading metrics you should find that each levels metrics are supported by the level below.
Secondly, a portion of the metrics should be driven by the current improvement strategies. For example, if you are trying to improve work order history, one of your maintenance level metrics could be percentage of work orders containing follow up comments or notes. This will drive organizational focus on that portion of the improvement strategy until it becomes the new norm.
The third point to remember is that metrics are not “holy metrics”. We don’t have to keep them forever. We put them in place to insure change or prevent change. When insuring change you may find that you gather and measure more often however when preventing change you can measure at a lesser frequency because they should not change as quickly. The key here is to look at the trends. If the metric value very seldom changes much this could mean that the change that the metric is driving is now ingrained in the culture and is the new way of doing business. This is the point where you can eliminate the metric or extend its frequency of observation to the metrics standard you use for preventing change. Once we eliminate a metric we can then add a new one to our dashboard that addresses a change that we are trying to make or a process we are trying to understand.
The forth point to consider is leading versus lagging indicator. If you are managing based off of only lagging metrics it is attune to diving a boat while only looking at your wake. If you practice this philosophy you could find yourself happily driving into an oncoming freighter sized problem with no real warning.
If you are going to bench mark your metrics with other facilities then the definitions and data sources become very important but if you are using them internally only then you can concentrate on the delta and look for improvement or change. If you are looking for standardization one great source is the Society for Maintenance and Reliability Professionals (SMRP). They have a great new metrics compendium that provides all the details you need on sixty plus common use metrics.
In the end, metrics are just tools and should be used when you need them. They should provide a look at the future and not just the past and there should not be thousands of them in play all at once. If you design your metrics strategy with a bit of thought you can eliminate the wasted time and resources and have a much more effective program that drives business results.

No comments:

Post a Comment