“Less is more. You should have about six metrics total on a dashboard. Dealing with many of the CIOs at top manufacturing companies throughout the Midwest and globally, I’ve discovered that places like Steelcase, Siemens, Air Jet Ordinance, Cubic Corporation and Boeing have these best practices where there’s about six metrics total. But they all measure collaboration and shared ownership, because what they’re trying to do right now is to try to use analytics to break down the barriers and the silos in companies.”
Universal Metrics Force Collaboration
Universal metrics can be a way for manufacturing companies to build a collaborative structure. Employees take ownership around each specific step in their part of the manufacturing process and have an incentive to work together and share information. “When collaboration becomes the measure of performance, information gets shared a lot faster than if there was more of a silo.”
How One Company Changed
Louis Columbus gives the example of a manufacturing plant for a $150 million company in Midwest America.
“Manufacturing, Engineering and Marketing were always at war with one another. While Manufacturing was absolutely just killing their metrics, Sales continued to have a backlog that couldn’t be fulfilled. Orders were dropping off of backlog despite there being a great urgency to fulfill every order.
“The CIO and the CEO got together. They said, you know what,by the end of the day, I need one dashboard with six metrics on it. I want to measure collaboration from this point forward, and this is how we are measuring it. It was just cold turkey. While it was painful for this company to change because it’s an older company (over 100 years old), they changed and what they did was save their company from being replaced by a Chinese competitor.”
Getting everybody on the same page and measuring success on a common ground can make manufacturing pay off. After the company above began using the same metrics for everyone, its gross margins went up about 25 percent.
To learn more about how to make manufacturing pay off, listen to Louis Columbus in the webinar “Five Strategies for Making Manufacturing Pay” below: