Measurement System

Description

• Mechanisms that will be used to implement the measures/metrics identified in the “To-Be” Measurement Dashboard.  These mechanisms are comprised of the following components:
• Data collection method(s)/frequency
• Measurement tools used to collect data
• Individuals responsible for collecting/analysing each measurement
• Mechanisms to periodically reassess measures (to determine if new measures are needed in response to changes in customer’s needs).

Business Value

• This deliverable  represents a proactive approach to performance measurement that assigns accountability for the collection of required performance data and for the timely analysis / decision- making based on this data.
• A sound Measurement System allows the client to gauge the progress and impact on performance, understand where enhancements are needed to enable solutions, and take appropriate actions where compliance/results are not being realised

Approach

Building upon the “To-Be” Measurement Dashboard, the organization defines and implements an infrastructure (e.g. reporting templates, supporting policies, etc.) that facilitate use of the measurement system.  A “measurement system” can range from a pencil-and-paper compilation to a highly-sophisticated, computer-controlled collection/analysis system.  The level of measurement sophistication is directly proportional to the criticality and magnitude of the process in terms of total organisational resource usage.  (If both of these are high, then the sophistication of the measurement system is generally also high.)

1. Identify the measure/metrics to be collected.
2. Define collection frequency or timing of measures which vary based on three criteria:
1. Amount of resources required to acquire measures
2. Degree of exactness required to provide enough information to make decisions
3. Criticality of the measure relative to monitoring the processes’ capability to meet the customer's needs and expectations.
4. Sometimes every occurrence of a specific variable must be measured, especially if it occurs irregularly (e.g., number of accidents at a factory).  In some cases, only random samples of data are needed, whereas other situations require continuous measures (e.g., monitoring room temperature for climate control).
3. Assign responsibility for the collection of performance data
1. One of the major reasons why performance measures are not gathered regularly is that no single individual is assigned responsibility their collection.  If someone is not held directly accountable for this activity, the required data will most likely not be compiled.  Tie responsibility directly to one key individual and a backup.
4. Define tools to be used to collect performance data.
1. These tools should minimise collection efforts while maximizing accuracy of the data gathered.
5. Implement the performance measurement system.
6. Follow-up with a review of the implementation to ensure that all aspects of the proposed measurement were implemented without problems.
7. Identify mechanism to reassess process measures overtime
1. As the market in which the client competes changes, determine if the measures used to gauge the performance of a particular process need to change or given different levels of prominence. For example, as a particular industry matures with more entrants coming  into the market, cost measures may need to be introduced into the measurement system, or existing cost measures may need to be given a higher weight compared with other performance measures.

Guidelines

Problems/Solutions

• If performance measures are taken too frequently, they waste organisational resources and can adversely impact the day-to-day operations of the processes themselves.  Measures taken too infrequently provide limited insight into the true nature of the process.  Also, measures which account for monitoring 80 percent or more of the customer's needs and expectations should be watched with greater precision and accuracy than other measures.

Tactics/Helpful Hints

• When assigning responsibility, confirm that the information concerning the measures collection is clearly communicated.  Ensure that any training needed to perform the collection task is provided.  Finally, if specific tools such as forms or computer hardware and  software are needed to collect the measures, ensure that these items are provided promptly and supplied regularly.

Resources/Timing

• Since training of some form is generally required when introducing people to new measures and metrics, ensure process personnel understand how they are to collect the performance measures.  Both managers and process personnel must understand how the information generated by the measures and metrics relates directly to the process, its operation, and the customer's needs and expectations.  It is only through this understanding that process changes can be implemented and sustained.
• If required, change organisational policies to implement measures collection or metric analysis.  It is critical that specific personnel or job positions be responsible for measures collection and metric analysis.  Often, shifts in job responsibilities are also necessary to ensure that this happens.
• Put in place an aggressive schedule for measurement implementation, so that “baseline” process- performance information can be generated as soon as possible.  Without a collection schedule, data collection activities risks being stretched out or may not occur at all.
• Implement a variety of tracking systems (e.g. check sheets to track “countable items”; rulers, timers, thermometers, etc. to gauge “parameter values”).  Some parameter-value measures are recorded directly onto simple “run-charts” or “scatter diagrams” to show trends/patterns over time.  Qualitative measures are collected through surveys and interviews.  Combinations of process task time and errors are recorded in a “process log”.  (A process log accompanies a product through each stage of the process flow.  Time and other comments are recorded at each step to pinpoint when and where problems are occurring in the process.)