Proactive metric management
There continues to be a great deal of emphasis on metric management - whether it be to manage suppliers, supply chain performance, operational performance, etc. This makes a lot of sense because the old saying is absolutely true, you can’t improve what you don’t measure.
The concern I see is that the approach that most companies take to metric management is very backward looking. That is, the metrics and “reports” (whether it be an actual report, dashboard, etc.) tend to be historical in perspective. While this certainly has some value, what about understanding the impact on metrics at the point of action - when decisions are being made?
The pace of change is accelerating - product life cycles are shortening, decisions are harder to make across distributed operations that involve multiple third parties, demand volatility is increasing - so it becomes increasingly important to ensure that spur of the moment decisions that are the necessity in operations today are made with a solid understanding regarding their impact on the most important metrics. It’s not enough to act quickly and then deal with the ramifications later, especially in a large company where literally hundreds of these quick decisions in response to change are being made every day. If metric management is historical in perspective, you’re likely to find that the aggregate effect of all of these decisions throughout the day have you heading off course.
As companies seek to empower front-line staff with better decision making capabilities, powered by global visibility and powerful decision support tools, they need to embed in these response management processes the proactive management of metrics. Front-line decision makers need to have simulation capabilities that incorporate a real-time analysis of any proposed action and what impact it would have on the metrics that are driving the business so decisions can be viewed in this light before they are executed.
Only by arming front-line decision makers with these tools will companies move to the point of proactive metric management and gain competitive advantage through greater responsiveness.
