New Book Part 9

In my last post I began explaining the details of how the UIC works and finished by commenting on what performance should you be looking at and using.  In this post we will explore these metrics and lay the foundation for a continuance of the Ultimate Improvement Cycle.

Performance Metrics

Performance metrics are intended to serve three very important functions or roles as
follows:

1. First and foremost, performance metrics should stimulate the right behaviors.
2. Performance metrics should reinforce and support the overall goals and objectives of the company.
3. The measures should be able to asses, evaluate and provide feedback as to the status of people, departments, products and the total company.

The right behaviors of people and departments are critical to the achievement of the overall goal of the company, but often the metrics chosen encourage and stimulate the opposite behaviors. To be effective, performance metrics must demonstrate the following criteria:

• The metric must be objective, precisely defined and quantifiable.
• The metric must be well within the control of the people or departments being measured.
• The metric must be translatable to everyone within the organization. That is, each operator, supervisor, manager, engineer and operator must understand how his or her actions impact the metric
• The metric must exist as a hierarchy, so that every level of the organization knows precisely how their work is tied to the goals of the company. For example, if one of the high-level metrics is on-time delivery, then the lower level metric might be cycle time or schedule compliance at individual work stations. Or, if the higher-level metric is parts per million or PPM, then the lower level metric might be the defect rate at an individual work station.
• The metric should be challenging, yet attainable.
• The metric should lend itself to trend and statistical analysis and, as such, should not be “yes or no” in terms of compliance

In my next post we will continue on with our discussion of the individual steps of the Ultimate Improvement Cycle by discussing Steps 1b and 1c.

Bob Sproull