The Clear Need for Metrics

Anyone versed in Quality Management principles knows the value of a well conceived and managed system of metrics or Key Performance Indicators (KPIs) to both manage the day-to-day operations and guide continuous improvement efforts.  Even if an enterprise does not have a formal continuous improvement effort and no plans to implement one, setting up a system of KPIs is still a very good thing to do.

At CR Supply Chain, we strongly believe that you get what you measure and track.  If you do not measure it, you will not know:

• How well you are doing
• What needs to be improved... until it is too late.
• If any actions taken have had any impact either positive or negative.

Certainly, this includes financial metrics.  The ratio metrics of Managerial Accounting are critical to running and maintaining a sound enterprise of any significant size.  It also includes process specific metrics that are not necessarily financial but may even be more important.  The great quality gurus agree that the single and most crucial step in any quality or process improvement process is the selection of the right metric.  The emphasis is on the word right.  Choosing the right metric is both a science and an art.

Our Principal, Mark Gavoor, is currently teaching a course in Operations Management at North Park University in Chicago.  In the first exam, this question was posed to the undergraduate students:  Why are metrics needed and useful in supply chain and operations management?  All the students responded and generally got the basic idea.  Two students had very good and very quotable content in their short essays.

• The only way that a company can how they are doing and discuss in what ways they can improve is if they have some sort of measurement system. ~ Kate Morris
• If there were no types of metric indicators, building an efficient company would be almost impossible. ~ Abigail McKowan

Well said ladies.  These are our new favorite quotes on metrics.

It is often helpful to quote a Deming, Drucker, Juran, Ishikawa, Peters, or Taguchi.  The right quote from a sports figure can certainly provide the motivation needed in a given situation.  There plenty of quotes from all kind of luminaries and celebrities.  But, sometimes it is good to see the perfect quote from someone with little or no experience like Kate and Abigail.  

These two, one a Senior and the other a Junior, see things more clearly than many exprienced folks in industry with responsible positions.