One of the keys to success for any business is to watch metrics trends. In my experience, if a client watches key trends, they tend to be more successful than most. If they don’t, they struggle. Fortunately and unfortunately, it is as simple as that.
One of the first questions I ask when I work with a manufacturing or distribution client relates to metrics. Which do they track? Why? What does the trend look like? I often find clients who track all sorts of metrics; however, I rarely find clients who not only track trends but watch the trends. It seems laughable that we’d employ people to track information yet do nothing with it but it happens every day. Thus, a few simple steps can achieve significant success.
1. Select carefully: Pick a few metrics which are meaningful to your business, and throw away the remainder. In essence, FOCUS. For example, in one of my manufacturing clients, they tracked at least 20 metrics yet still struggled to improve service levels. Thus, we threw out the vast majority and selected to follow just those metrics which would indicate whether our service was improving. This focused everyone on these few metrics.
2. Simple trend: Develop a simple trend for the metrics. Reacting to a single point in time is often worse than not tracking metrics. Why? Executives jump to incorrect conclusions based on a single occurrence. Instead, react to the trend. Throw out outliers and focus in on significant changes in the trend line. Are the changes explainable?
3. Act: Do not just track and discuss; you must ACT. Dig into root causes, develop action plans, put together teams, and make changes. Then take a step back and see whether the improvements are having the expected impact in the metrics. Adjust.
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