Strategic Supply Chain Management - Supply Chain Online

CHAPTER 5 Core Discipline 5: Use Metrics to Drive Business Success 201
four-week period. This second metric was added as a way to smooth the
results and reduce the perception that a one-time backslide was the sign of
a negative trend. After about a month, when the first elements of the new
process were put in place, the results were immediate and significant.
After two months, average cycle time had been cut by nearly 10 days, and
after 10 months, the stretch goal of two days was nearly a reality (see
Figure 5-4). An added bonus: The boards have proven effective as a sales
tool. Sales reps show them to customers as proof of the company’s focus
on customer service.
This example shows clearly the need for demonstrated commitment
by leaders within your business. Identify a set of “metrics champions”
early on and work closely with them to secure their commitment. They
will serve as the advocates for performance management. To take their
role seriously, they will need to actively monitor relevant metrics and take
immediate action if the program is not being executed as designed.
You also should define the decision-making processes and workflows
resulting from the metrics program. Measurements are only useful
to the degree that they enable timely decision making. All too often
action stops at the point at which the measurement is made. Successful
performance management must include specific actions to be taken when
FIGURE 5–4
Order-fulfillment cycle time for Company X.
30
25
Current Time (Days)
20
15
10
5
0
Current Week 4-Week Average Goal