Strategic Foundation

In my previous white paper, I outlined the essential steps required to establish a data-driven reporting system. You need to systematically define the categories for measurement and then develop a vision statement, goals, measures, and strategy for each category. While establishing these foundational steps will dramatically increase the effectiveness of a metrics system, additional tools are required to make the system work. The system relies on charts and graphs to communicate problems. It relies on the discipline of management and staff to effectively drive continuous improvement. The essential elements to implement this visual reporting and management system are outlined in this white paper.

Metrics reporting system

One of the outputs of the Four Panels work sessions is a list of measures. But each of the measures needs a reporting system, that is, a set of graphs, that includes these four elements;

1. Demonstrate performance changes over time and compare performance against targets (Trend graph)
2. Clearly illustrate current issues and their relative severity (Pareto chart)
3. Show historical problem trends and the relative severity of past problems (Payer matrix)
4. Record the actions that have been taken and report the effectiveness of those actions. (Action Log)

These requirements can be easily met through a single one-page report. A simple Excel spreadsheet allows data to be tracked and graphed relatively easily. stick to the data in a way that is most likely to be understood by everyone.

trend charts

Sometimes known as run charts, trend charts are used to show changes in performance over time. Execution charts are used to provide a visual indicator of performance. Since there will always be some variation in results, displaying them over time makes it easier to see and understand how actions are changing results and how we are performing relative to the goal.

Resist the temptation to set too short time periods for individual data points on the trend chart. Short time frames can make it difficult to see real trends. Occasionally it is acceptable to use time periods as short as a week, but monthly buckets are generally preferred.

When setting up trend charts, be sure to include and clearly label target performance. Place an arrow labeled GOOD and indicate the direction in which you want the results to move.

To make your trend charts the best they can be, be sure to follow these guidelines:

1. Label the chart with a short but descriptive title.
2. Label the y-axis with the units that are used. Label the X-axis with the time periods.
3. Don’t pile data on top or bottom. Use as much of the available range as possible, but be aware of future movement. Do not include impossible numbers (i.e. 110% delivery on time)
4. Do not change the chart scale once it is set. These same reports will be used month after month. Changing scales tends to confuse and hinder performances.
5. Use one table per measure. Don’t add superfluous data or try to combine related measures in a single chart.

Pareto charts

A Pareto chart is a special form of a bar chart that orders items from highest to lowest (occurrence, time, cost, etc.). It is the visual manifestation of the Pareto Principle which states that when several factors affect a situation, 20% of the factors will represent 80% of the problems.

Pareto charts are valuable because they help us quickly identify the few vital factors to focus on in order to maximize our overall results. They break big problems down into smaller parts and help direct our limited resources.

Pareto charts always present data from highest to lowest. If a bar chart does not present data in this format, then it is not a Pareto chart. The data on which Pareto charts are built can generally be classified in various ways. For example, should quality data be ordered by number of occurrences, by total cost, or by customer impact? Choose carefully, how you decide will affect the actions that are taken along the way.

payment matrix

The Paynter Matrix is ​​a tool that illustrates the effectiveness of corrective and containment actions. It allows us to track the cumulative effect of our corrective actions on results. It uses the same data as Pareto charts, but adds a time element by displaying data from previous time periods.

It is a matrix with categories in the leftmost column with a time series in the following columns. When corrective actions are implemented for a particular category, the action is noted in the time series. When corrective action is effective, there will be a corresponding improvement in results.

Action Log

The action log is a tool to record and track the actions that are required. It provides clarity on what needs to be done, a mechanism for regular review of actions and their status, defines responsibility for actions, and provides a certain date for completion. The action log is the tool that connects the metrics system to the continuous improvement process.

Establishing disciplinary measures and conducting reviews

Data-driven reporting systems are of no use if we don’t follow them and establish the discipline to use them. In my visits to the plants it is common to find measurement systems that have been abandoned; charts are posted on the bulletin boards, but the data is not up to date. It just serves as a reminder of yet another failed attempt to improve our operations.

Establishing the foundation and graphics for a measurement system is quite easy. Most companies and experienced managers can define the vision, goals, measures and strategy in a few days. In a couple of weeks, the charts and spreadsheets can be set up and put in place. But this effort is worthless if the tools are not used once implemented.

If you want your measurement system to outperform trends and truly become a tool that drives improvement, here are some tips to make your data-driven reporting system more successful:

1. Get buy-in from facility managers while developing the system. Don’t develop it in a vacuum and don’t force it down your throat. Participation in the process is the key to success.
2. Follow up. This is important. Travel to the manufacturing facility and review the results face-to-face. Don’t fall into the trap of simply following up on the phone, or worse, just reviewing emailed reports. Visiting the plant to review the results will emphasize their importance and dramatically improve results.
3. Hold the operations team accountable for results. Performance on metrics should be reflected in bonuses, performance reviews, or other performance-based rewards. However, this only works when the installation team agrees to the performance targets. They cannot be held accountable (or rewarded) for performance on metrics that cannot be achieved or those that are not under their direct control.
4. Make the metrics clear and easy to understand. A clear definition of exactly what data to collect and how to calculate the results will help prevent manipulation. When employees can see how their individual actions improve results, they will respond positively.
5. Insist that local management include first-line supervisors and hourly associates in reviews. The more they understand the measures and why they are important, the sooner the improvements will be made. Hourly associates should be regularly asked to present results and action steps to the management team; it can help break down barriers and establish open communications.
6. Always require action plans, improvement teams, work cells, or other proven problem-solving methodologies to be used to resolve problems once identified. This system can help drive improvements in your facility, but only if you use it as a tool to drive continuous improvement.

Use a dashboard to summarize and report to management

It is not uncommon for these systems to have 20 to 25 individual measurements. To see trends that can occur between measurements and to quickly report facility results to executive teams, you need to consolidate the results into a single report; commonly known as dashboard.

The data for the dashboard comes directly from the trend graph. The monthly results of the trend graph are inserted into the corresponding cells of the dashboard and are color coded; green: the results for the month and the year are on the right track; yellow: the results for the month are on the right track, but not for the year; Red: Results are not on track for the month or year. The whole system is very visual. Trend charts and Pareto charts display the results in a visual format. This visual orientation continues with the dashboard. In addition to the color coding of the results, the categories themselves are color coded.

1. people – yellow
2. safety-green
3. Quality – purple
4. Responsiveness – blue
5. Cost / Finance – red

These tools, combined with the discipline required to use them, the proper application of lean manufacturing techniques, problem-solving methodologies, and error-proofing methodologies can greatly increase the speed of change within your operations. It is not magic, it requires a lot of work and willingness to change, but the results can be spectacular.