Most Important Metrics For OM
Most Important Metrics For OM
Introduction:
Write a brief description of what metrics are. Here it would be good to include some sort of text/source definition. It would be good to note some big picture use of metrics here as well. This can include notes including; metrics allow business leaders to make decisions based on data instead of hunches, data driven decisions are generally more accurate, helps find negative trends to correct or positive trends to exploit, etc.
1-Most Important Metrics For OM
Within this section you will call out what metrics you find as the most important. The big call out here is that metrics are specific measurements. Customer service is not a metric. Planet (if 3p focus) is not a metric. Employee empowerment is not a metric. You want to call out metrics that monitor these types of components. IE, for customer service, a very common metric is average speed of answer for phone calls. For profit a very common metric is COGs (cost of goods sold). For people focus, a common metric is annual employee turnover. What metrics are the most important? The key here, making sure whatever is in your list as the most important metric should be a metric. It has to be something that can be measurable. Keep in mind a metric is a measurement, a number. If you can’t say the metric and then a number, it isn’t a metric. IE; People, 7…that doesn’t work… COGs, 40%…yes that works. Planet, .3…that doesn’t work… Annual decrease in KwH used, 5%…that works.
What are the metrics?
2-Why are these Metrics the Most Important
Within this section you will take your above list, and describe why they are important measurement. For the ASA call out; Average speed of answer is an important customer service metric to help show how well we are able to handle our customer calls. This is important as customers value prompt service. For the turnover call out; Employee turnover is an important measure because it shows how satisfied employees are with the company. This is a good indicator of empowerment. High turnover can impact quality, costs, etc. Essentially, why are the metrics in #1 important. For COGs, this a good profitability measure as the cost needs to be far below the retail price. Most of these notes should link the metric to some sort of gauge of the health of the organization.
Why these metrics?
3-Where Do You Get The Data
Within this section, you will explain how you pull the data for the above. For ASA; Data for the ASA would be pulled from the company’s IVR platform. This platform should generate basic call center data. For turnover; Most HR departments track this metric and should be able to provide as needed. For COGs, the OM should be tracking this as part of the BOM input to the MRP. Whatever the metric, the number has to come from somewhere. For financial data, this can often be taken from a corporation’s 10K. If you are looking for customer or employee input, surveys can be a good source. The main component here, describe how the data will be generated.
Where does the metric come from?
4-How Do You Analyze
The above noted data all has to be reviewed in some sort of context. Within this section you should describe how the data is analyzed. Benchmarking against industry averages, or best in class, is almost always a good way to analyze data. There are other ways too though, for ASA; This metric could be compared to customer expectations that could be gathered by looking at abandon rates and through customer feedback. Reviewing trending for MoM (month over month) or YoY (year over year) changes can be a powerful way to compare data points. The topic here, summarize considerations when looking at this metric.