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Performance Management Basics
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FREQUENCY OF PERFORMANCE MEASUREMENT

 

By applying performance measurements, management can track, anticipate, and ultimately achieve results. Business processes are usually performed in cycles. For example, financial management will measure and report results monthly and/or quarterly.

Operational performance requires various frequencies:

Monthly measures align with the monthly financial results reporting and will include nonfinancial measures of demand acquisition and supply achievement. How­ever, they are usually reviewed at an aggregate level of detail known as product family. Overall measurement of quality is often presented with the monthly measures.

Weekly measures are totally nonfinancial and center on items, orders, or customers. Achievement of a weekly sales plan, the shipment schedule, utilization of capac­ity, and maintenance of valid plans would be measured and reviewed on a weekly basis.

 

Daily measures are action-oriented and a result of ex­ecution of higher-level plans. These include achievement of daily schedules for purchased material deliveries, manufacturing completions, and (in some businesses) completion of engineering tasks to a daily schedule. The most important daily measurement in a manufacturing company is the delivery to the customer. A company is not customer-service-driven if management is not con­cerned about on-time delivery results on a day-to-day basis.

 

Continuous is both a frequency and a type of mea­surement. There is an investment decision required in order to achieve continuous measurement. However, the ROI on such investment is usually easily justified.

To Be Continued

For balance of this article, click on the below link:

Lean Manufacturing Articles and click on Series 13


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