If the business metrics that you are putting your focus, time, and energy into are not driving your business then you must ask if those metrics are failing your business. A successful metric should be growing your business; that means improving your equipment reliability, increasing your customer base and improving customer experience, maximizing your output margin and profitability, and optimizing your workforce.
Metrics
Let me first define leading and lagging metrics:
Leading metrics are valuable because they can serve as early warning signs or predictive tools, helping organizations and individuals make informed decisions and take proactive actions to achieve desired outcomes or avoid undesirable ones. Lagging metrics are little more than ‘dead’ data.
Reality
The reality of what I see too often is that business focuses on the output or lagging metric, and when the metric falls short of goal, managers react with a raft of activity to try and ‘plug the leak’ without truly addressing the real issues. This can be everything from a root cause investigation to a reorganization, to focus groups, to the easiest option of firing a few people. But what has changed down the line if these actions were not focused on a leading metric? You are right, very little to nothing at all.
Don’t get me wrong, as a Lean OpEx consultant I have a passion for data and metrics, but they must be the right metrics; they must be leading metrics that drive and sustain business change.
Here are a few examples of how to turn the wrong metrics into the right metrics:
I worked with a company that were very proud that they were now accurately capturing ‘all their safety metrics’ and as a result were able to investigate ‘every’ safety incident and put into place mitigation to avoid ‘every’ accident. However, they were not capturing the near misses that research shows are the indicators of future accidents.
Another company was very happy that they had a proactive campaign that meant every employee has to capture 1 near miss per week (spot the problem with this one?) However, when I asked the store’s supervisor how many Band-aids were used in one year the answer across what was a very large production facility was around 2000. When I looked in the first aid log, I could only find 12 incidents that has needed a Band-aid. So which was true? The metric that gave the best picture was the storeroom Band-aid consumption rate; that was the true indicator of incidents, not the first aid log.
Reliability
The same story should be seen in reliability. What steps are being taken on input ‘leading’ business metrics rather than just publishing the output metric? Take Mean Time Between Failures (MTBF), there is little point publishing graphs of MTBF as a lagging metric if they are not driving change in input leading metrics to improve MTBF. If MTBF is poor, we have to look at training, quality of the equipment, servicing frequency, tool serviceability, test equipment calibration, personnel training and importantly the quality of SOPs and especially PMs and PdMs, etc. Focusing on the leading metric will directly impact the lagging metric.
Failed Business Metrics – Conclusion
If your metrics are little more than wallpaper, ask yourself if you are focusing on lagging rather than leading metrics. If your metrics are not driving your business, you are almost certainly not focusing on the right metrics to effect change.
Book Review – A Practical Guide to Creating Operational Excellence and High-Performance Teams
In this latest book from ‘The Project7 Consultancy,’ Dr Kenneson-Adams provides the simplified OpEx tools and practical experience to give the reader all they need to begin to implement a robust lean manufacturing stratergy with high-performance teams and authentic transformational leadership.
Kenneson-Adams uses his 40 years’ experience in implementing high-performance teams to provide a well sign-posted journey to Operational Excellence, whilst making sure the reader knows how to sustain the changes as part of an integrated ‘People + Process = Performance’ continuous-improvement journey.
Its balanced analysis, practical insights and accessible writing style make this an invaluable addition to the library of any professional engaged in the field of operational excellence and continuous improvement.
If you are not sure how to begin your journey to operational excellence or need a mentor through design and implementation? This no-nonsense volume will be the teacher and coach that you need.
Dr. Anthony Kenneson-Adams had a 30-year career in the Royal Air Force, becoming a Senior Engineering Officer, Project Manager and Engineering Authority responsible for multiple fast jets and large-body aircraft in peace and war operations. On retiring from the Royal Air Force, he became a Corporate Operational Excellence Consultant in the Paper Manufacturing and Packaging Industries and is now the Head of Learning and Knowledge Transfer for the international Project 7 Consultancy. You can contact Anthony at www.project7consultancy.com or [email protected]
Expert troubleshooters have a good understanding of the operation of electrical components that are used in circuits they are familiar with, and even ones they are not. They use a system or approach that allows them to logically and systematically analyze a circuit and determine exactly what is wrong. They also understand and effectively use tools such as prints, diagrams and test instruments to identify defective components. Finally, they have had the opportunity to develop and refine their troubleshooting skills.
Expert troubleshooters have a good understanding of the operation of electrical components that are used in circuits they are familiar with, and even ones they are not. They use a system or approach that allows them to logically and systematically analyze a circuit and determine exactly what is wrong. They also understand and effectively use tools such as prints, diagrams and test instruments to identify defective components. Finally, they have had the opportunity to develop and refine their troubleshooting skills.
Semiconductor devices are almost always part of a larger, more complex piece of electronic equipment. These devices operate in concert with other circuit elements and are subject to system, subsystem and environmental influences. When equipment fails in the field or on the shop floor, technicians usually begin their evaluations with the unit's smallest, most easily replaceable module or subsystem. The subsystem is then sent to a lab, where technicians troubleshoot the problem to an individual component, which is then removed--often with less-than-controlled thermal, mechanical and electrical stresses--and submitted to a laboratory for analysis. Although this isn't the optimal failure analysis path, it is generally what actually happens.
Semiconductor devices are almost always part of a larger, more complex piece of electronic equipment. These devices operate in concert with other circuit elements and are subject to system, subsystem and environmental influences. When equipment fails in the field or on the shop floor, technicians usually begin their evaluations with the unit's smallest, most easily replaceable module or subsystem. The subsystem is then sent to a lab, where technicians troubleshoot the problem to an individual component, which is then removed--often with less-than-controlled thermal, mechanical and electrical stresses--and submitted to a laboratory for analysis. Although this isn't the optimal failure analysis path, it is generally what actually happens.
In an ideal world, multiple components could be produced in a single piece, or coupled and installed in perfect alignment. However, in the real world, separate components must be brought together and connected onsite. Couplings are required to transmit rotational forces (torque) between two lengths of shaft, and despite the most rigorous attempts, alignment is never perfect. To maximize the life of components such as bearings and shafts, flexibility must be built in to absorb the residual misalignment that remains after all possible adjustments are made. Proper lubrication of couplings is critical to their performance.
In an ideal world, multiple components could be produced in a single piece, or coupled and installed in perfect alignment. However, in the real world, separate components must be brought together and connected onsite. Couplings are required to transmit rotational forces (torque) between two lengths of shaft, and despite the most rigorous attempts, alignment is never perfect. To maximize the life of components such as bearings and shafts, flexibility must be built in to absorb the residual misalignment that remains after all possible adjustments are made. Proper lubrication of couplings is critical to their performance.
The key to realizing greater savings from more informed management decisions is to predetermine the "True" cost of downtime for each profit center category. True downtime cost is a methodology of analyzing all cost factors associated with downtime, and using this information for cost justification and day to day management decisions. Most likely, this data is already being collected in your facility, and need only be consolidated and organized according to the true downtime cost guidelines.
The key to realizing greater savings from more informed management decisions is to predetermine the "True" cost of downtime for each profit center category. True downtime cost is a methodology of analyzing all cost factors associated with downtime, and using this information for cost justification and day to day management decisions. Most likely, this data is already being collected in your facility, and need only be consolidated and organized according to the true downtime cost guidelines.
I use the term RCPE because it is a waste of good initiatives and time to only find the root cause of a problem, but not fixing it. I like to use the word problem; a more common terminology is Root Cause Failure Analysis (RCFA), instead of failure because the word failure often leads to a focus on equipment and maintenance. The word problem includes all operational, quality, speed, high costs and other losses. To eliminate problems is a joint responsibility between operations, maintenance and engineering.
I use the term RCPE because it is a waste of good initiatives and time to only find the root cause of a problem, but not fixing it. I like to use the word problem; a more common terminology is Root Cause Failure Analysis (RCFA), instead of failure because the word failure often leads to a focus on equipment and maintenance. The word problem includes all operational, quality, speed, high costs and other losses. To eliminate problems is a joint responsibility between operations, maintenance and engineering.
The potential-to-functional failure interval (P-F interval) is one of the most important concepts when it comes to performing Reliability-Centered Maintenance (RCM). Remarkably, the P-F interval is also one of the most misunderstood RCM concepts. The failure mode analysis becomes even more complicated when you are dealing with several P-F intervals for one failure mode. This paper will help clarify the P-F interval and the decision-making process when dealing with multiple P-F intervals.
The potential-to-functional failure interval (P-F interval) is one of the most important concepts when it comes to performing Reliability-Centered Maintenance (RCM). Remarkably, the P-F interval is also one of the most misunderstood RCM concepts. The failure mode analysis becomes even more complicated when you are dealing with several P-F intervals for one failure mode. This paper will help clarify the P-F interval and the decision-making process when dealing with multiple P-F intervals.
As many of us strive to improve the reliability of our plants, several comments bemoan how challenging that is to do in an era of continuous deep cost cutting. They say that in their operation, maintenance is seen as a cost, and is one of the first things to arbitrarily cut. Some think their operations have cut too far! What they seek is a way to justify a strong maintenance capability. I submit that one approach is to speak of maintenance as an “investment in capacity.” Use the language that plant managers, controllers and senior management understands: capital investment and return on investment (ROI).
As many of us strive to improve the reliability of our plants, several comments bemoan how challenging that is to do in an era of continuous deep cost cutting. They say that in their operation, maintenance is seen as a cost, and is one of the first things to arbitrarily cut. Some think their operations have cut too far! What they seek is a way to justify a strong maintenance capability. I submit that one approach is to speak of maintenance as an “investment in capacity.” Use the language that plant managers, controllers and senior management understands: capital investment and return on investment (ROI).
