Is Your Business Sending the Right Signals?
In the Monitoring phase of the Plan Execute Monitor and Analyze (PEMA) cycle, we are on the lookout for channel markers, shoals and maybe even icebergs. In other words, where is the risk? These are your business measures that are out of tolerance or signaling that they are off track, or about to be.
In previous posts, we introduced the Plan Execute Monitor and Analyze (PEMA) concept as an iterative cycle for progressive improvement. PEMA provides a relevant framework for the challenges faced by finance professionals in manufacturing operations.
In this post we dig further into the system capabilities that finance professionals rely on to help meet the challenges in the Monitoring phase of the cycle.
Interactive, Dynamic KPIs and Dashboards: Interactive dashboards with KPIs allow you to quickly go from measure to action. You need to be able to drill into the details to and decide on what is needed to move things forward. A great dashboard can also quiet the noise and guide your focus. As the saying goes – if everything is important, nothing is important. If the measure is within tolerance, it should not grab your attention, but the flashing light that says there are rocks ahead is a different story.
Dashboards and alerts should be rule based and take advantage of visual cues like color, symbols and messaging that align with the alert levels.
Vendor and Customer Performance Cards: Your customer’s satisfaction with your product and service is directly tied to your company’s ability to deliver as promised – on time, complete and without defects. Likewise, you have the same expectations of your vendors. Is your current system reliably tracking that performance? What about attrition and win/loss ratios? These metrics can be leading indicators of trouble brewing.
Accurate Cost and Time Tracking: How accurate are your estimates? Which jobs have costs that are currently out of line with % complete? Are there issues with specific work centers or resources? With effective monitoring, there is opportunity to intervene and mitigate further erosion of margin.
Cost of Quality – Inbound and Outbound
Returns from customers, service issues and warranty claims should be signalling for attention if they exceed targets. Similarly, if increased scrap and rejects from internal production cross thresholds somebody should be notified.
If you would like to share some of your monitoring challenges or hear how similar companies are addressing their challenges, please reach out to us at sales@industrios.com and Let’s Talk Shop.
