Performance Measurement Training
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PART I. For the manufacturing company aspiring to achieve World Class status, manufacturing plays a fundamental role in developing and sustaining customer satisfaction in the areas of quality, cost, flexibility, reliability and innovation. To achieve ongoing improvement in each of these target areas, today's aggressive companies are adopting a set of characteristics that are designed to set themselves apart from other competitors in the marketplace. The characteristics being adopted and nurtured within these visionary thinking companies are: 1. An ongoing company-wide education and training initiative for human resource development to allow everyone to actively participate in the improvement process. The importance of education and training for all employees cannot be over-emphasized. Studies show that World Class manufacturers provide a minimum of forty hours of education and training per employee on an annualized basis. In today's business environment the only long-term sustainable competitive advantage is organizational learning. 2. Relentless pursuit of continuous improvement in all business activities. The management focus is on establishing operating performance measurements that drive the behaviors consistent with the goal of continuous improvement in both process and product. Measurements in place focus on rates of improvement. 3. A dedication to developing a competitive advantage based upon superior product quality and service. The World Class company creates a level of customer satisfaction through being not only "easy to do business with," but by exceeding customer expectation. The term "customer delight" is an often used expression when procuring product or service from a World Class manufacturer. 4. Utilization of an integrated business system that links people and process. All business functions actively pursue a process of factory and business simplification resulting in a systems integrative approach. Traditional Measurements Traditionally, financial performance has been the primary measure of success in most manufacturing companies. Manufacturing companies have developed financial planning systems for measuring their performance on a regular monthly, quarterly and annual basis. Today companies need to establish operating performance measurements to enable them to effectively manage business operations and meet business and financial objectives. Defining
current performance in the elements of quality, cost, flexibility,
reliability and innovation will
enable you not only to evaluate
current performance, but also identify performance problem areas and prioritize
for initiating the improvement
process. Performance Measurements In World Class Manufacturing the focus is on continuous improvement. Measurements in place should therefore activate improvements. Management evaluates the measurement process based upon the rate of improvement. The measurements are designed to drive the improvement process in the critical elements of quality, cost, flexibility, reliability and innovation.
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