Further Thinking on Strategic Performance Measures
Baggley exhorts us to use key performance measures instead of relying exclusively on traditional measuring systems. He even provides a starter set of measures and steps to use them. But one step is harder than the others… "Decide whether the starter set will be used as is or tailored". That's a little reminiscent of the business plan flowchart element labeled "miracle occurs here".
Here is a set of steps that have served us well for deciding on which measures best define a process and which to monitor for improvement. We sometimes call them PFRCNCXRP, but as you will see, your acronyms may vary.
Begin by mapping the process flow (PF). You may already have done this in a Value Stream Mapping exercise. Be sure in this case to list all the inputs and outputs from the process, taking more care than usual to take account of external factors. You may also benefit from a "Supplier, Input, Process, Output, Customer" or SIPOC chart.
Now determine which of the input factors in our process flow is acting as a root cause of poor performance (RC). This stage may involve some intensive data analysis and can almost certainly benefit from a discussion with the front line experts who work close to the process.
Our candidate root causes should next be segregated to focus on the critical few. Using a combination of analysis (for example multiple regression), and judgment, determine whether each factor is external and out of our control for now. Weather, government regulations and supplied part variations may all be examples. For those factors, we should strive to make our process as robust as possible to the variability or noise (N) we anticipate. The remaining factors can be segregated into those that are enough in control now (C) to satisfy our needs and those that are subject to experimentation (X). The X-factors are those that we will need to monitor intensively using Baggley's approach. This stage requires care and knowledge. Control charts and designed experiments are important tools in this stage.
Once we have selected the X-factors and are monitoring them, we will need to put improvements in place and lock them using standard work. Key tools for this are Routine Procedures (RP), but they will only produce standard work in a broad culture of training to standards, auditing activities, treating failures and measuring performance.
Worked repetitively and consistently, PFRCCNXRP can help us attain Baggley's goal of measures that reflect the principles of lean thinking, drive improvement of value stream results, control adherence to standards in cells, and link cell and value stream strategies and goals to corporate strategies and goals.
Back to top of page
