Designing a process to monitor and analyze performance benchmarks to find opportunities for greater efficiency for better performance
Process Efficiency management looks at ways to improve operation and supply chains. This means looking at comparative performance metrics in three key areas:
- Internal operational processes.
- External developments and trends.
- Competitive benchmarking.
Internal operational processes means monitoring issues such as whether purchasing efficiency has gone down or sales have slumped. Understanding external developments and trends requires looking outside the company. And many businesses extend their monitoring activities to their competitors. Comparative competitor benchmarks could include sales per employee, volume output per employee, inventory levels and number of warehouses.
With the Process Efficiency decision area, you can set planning goals and scorecarding metrics for these elements to improve your performance management:
- Operational failures (#).
- Process, downtime, and maintenance cost ($).
- Process value-add ($).
- Process steps (#).
- Average units / production run (#).
- Production / batch runs (#).
- Scheduled production hours (#).
- Set-up cost ($).
Most importantly, you can analyze these goals and metrics by a number of dimensions to find the hidden gems in the data:
- Fiscal month / year.
- Brand and product line.
- Manufacturing product component.
- Production process.
Using the Process Efficiency decision area
You set targets based on your goals and metrics in Process Efficiency. You monitor your success by looking at how you measure up against your targets. Further, you dive into your results to find out more about these elements underpinning performance management.
- Average units / production run (#): Are there new manufacturing techniques, equipment or technologies that could introduce dramatic efficiencies?
- Process cost ($): If “dollars of sales per order” is decreasing, does this indicate that the business is filling more orders for the same dollar total in sales?
- Set-up cost ($): Should we shift to low-labor-cost economies for cheaper manufacturing?
