Team 2_03 Chap 5

Measure can be expressed as an objective value

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Unformatted text preview: Measure can be expressed as an objective value • Quantitative= Measurable • Qualitative=measure perception Qualitative metrics are backed up with Quantitative data Is it Easy to Understand? Experience has shown that individuals will understand a metric if they are involved in its definition and calculation. • One of the most commonly used metrics in logistics is On Does it encourage appropriate behavior? • A basic principle of management is that metrics will drive behavior Is the Metric Visible? Good metrics should be readily available to those who use them. o o Reactive Metric- metrics are available in the system for employees to see and use, however they must attempt to find them Proactive metric- leading firms “push” metrics to metrics owners so they can react immediately Does the metric encompass both outputs and inputs? • Process metrics such as on time delivery need to incorporate causes and effects into their calculation and evaluation. Does it measure only what is important? • Just because data are available to calculate a metric does not mean this metric is important Is it multidimensional? • Although a single metric will not be multidimensional, a firm’s metric program will be. Does the process use economies of effort? • • “Do we get more benefits from the metric than we incur costs to generate it?” The longer a firm has a metric in place the more likely there are to be economies of effort. Does it facilitate Trust? • • Probably the most important question If it does not, complying with the other nine characteristics makes little to no difference for the effectiveness of the metric. Focus on performance measurement is not a recent event in industry • • Cost has long been recognized as an important metric for d...
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