April 1, 2021 at 7:43 pm | Blog
It is easy to acknowledge we live in crazy times, having to make almost daily adjustments to our activities. It is nearly impossible to find anything that is constant. But in our businesses, we must have some foundational metrics we can rely on that are meaningful and reliable.
If I asked you to tell me your current return rate, or complaint rate, and how it is measured, can you do that? Many can. But when pressed further and asked, what are the top issues and how are they resolved and tracked, fewer can still respond effectively. We have seen companies have over 100 different complaint codes created because there was no internal agreement on the reason, or they were simply in a hurry. It is hard, if not impossible, to fix an operational problem when the issues seemed spread out like peanut shells on the floor of a sports bar.
Another one that might challenge some folks is the accuracy issue. Do you have invoice accuracy issues or are they order accuracy issues? Does it occur in the picking, shipping, or labeling? Or did the customer screw it up? Where is attention needed? We have seen numerous approaches by different departments in the same company!
One of the most frequent metrics challenges we see is how companies measure “on time delivery” or “on time completion.” We had one large international client who had a different way of defining “on time” based on what country they served. It was particularly challenging for the company to get a clear picture on what to fix and where. For something as seemingly simple as “on time,” there wasn’t an internal common understanding of what it meant.
Once you identify the 3 or 4 things most valued by your customers, you must have a constant and clearly defined, internally agreed upon, way of measuring your performance in those areas. They should be tracked and updated monthly, or even weekly, in some cases. And document the definitions, so that everyone knows what the metrics mean. For example, do you mean on time delivery, or do you really mean on time shipment? Are you tracking on time by order, or by line items? A mixed bag of metrics can spell trouble as you may not be able to spot the landmines. Most importantly, your excellent performance should be validated for all to see.