Tuesday, December 14, 2010

Checking Out Measures

In continuation with performance measures I want to talk a little about how to review your measures.  Any discussion on Lean measurement should begin by recognizing that measurement is waste. It should be limited and minimized. It has been said "You can't fatten a calf by weighing it." At the same time, you must recognize that an effective measurement system is one of the most powerful tools for change, and for Lean transformation, that exists. 

A good method to check out your measures is to consider Kipling's Six Honest Serving Men or the Five Why's and One How.

Measure: a self-explanatory title

Purpose: why is it being measured?  To which business objective does this measure relate?

Target: what is to be achieved, and by when?

Formula: the formula or ration used.

Frequency: how often should the measure be taken, and reviewed?

Who measures?  Who is responsible for collection and reporting?

Source of data: wher does it come from?

Who acts?  Who is responsible for taking actions?

What to do? What action should be taken?

Limits: What are the control limits within which no action is required?

Since we would like to have the minimum set of measures to evaluate our performance as possible using this approach is vital.  If the measure is ineffective or ineffecient then we can expect more waste in our system then necessary.

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  1. Your "checklist" for measures basically conforms to the columns in the AIAG "Control Plan" format that has been used in the Auto Industry for a number of years.

  2. Excellent point about measurement being a waste. I've seen department heads hold their monthly operations reports in high esteem displaying a large number of metrics that could be distilled down to one or two simple charts.

    Oh the wasted hours.

    Henry Ford and Rudyard Kipling were both freemasons...hmm..one of the founding corporations in the AIAG was Ford...inquiring minds?