Taking stock of your KPIs - 3 lessons that deliver results
With the recent update to our top supply chain KPIs article, I've gained a new appreciation for the challenges that supply chain organizations need to overcome. From the perspective of real-time data, it doesn't get any more "real" than in a supply chain. Think about it: they need to manage thousands of orders, track shipments at the regional, national, and international level, and maintain first class inventory records, all while relying on data that changes on an hourly, even minute-by-minute basis. Sounds like the perfect job for a real-time dashboard.
In dealing with these challenges, supply chain organizations provide all of us with 3 valuable lessons we can apply to our own business, no matter what sector you belong.
Lesson #1. An effective KPI strategy blends analytical and operational data
Let's start by distinguishing between these two:
- Analytical: Strategic data that answers key questions about your overall performance, often over long term.
- Operational: Tactical data that answers questions about your performance on a daily, hourly, or even minute-by-minute basis.
Check out Lyndsay Wise's article for more information: Operational dashboards vs. Analytical dashboards: What problem are you solving?
If you think of business intelligence as a road-trip, then analytical data is how you determine where you are going and operational data is how you get there. For example, analytical data will provide you with benchmarks like how much fuel you should use, what direction you should go, and an estimated time of arrival. Operational data, on the other hand, provides you with current weather conditions, what roads you should take and road conditions, driving speed, and engine performance. Without analytical data, you don't know where you are going; without operational data, you don't know how you're going to get there.
To use a supply chain example, you need to measure your perfect order rate (#2 on our list), but you also need to know the status of each shipment (is it on time, accurate, etc). If a shipment goes out today that is inaccurate, then you need to respond quickly to ensure your customer is happy. But monitoring these trends over the long term helps you to identify root causes and improve performance over the long-haul (pun intended).
Lesson #2. Democratize your data!
What use is all your data and analysis if it stagnates in a board room? You know the answer to that as well as I do, and so do the top supply chain organizations. The truth is that transparency in your organization has a lot of tangible and intangible benefits. Not only does this build trust between front-line workers and management, it also helps everyone to take responsibility for their performance.
The question of how to do this is one that many organizations are still tackling. I think that operational data is definitely the most interesting and relevant to front-line workers. For example, if order pickers know that they've made errors on 3 shipments today, they are going to be a lot more careful. At the same time, analytical data still has a place in an organization democratizing their BI.
For an example of how to share this information within your organization, check out Allan Wille's post: Water cooler talk: BI's missed opportunity.
Lesson #3. Real-time isn't just when, it's where
Oftentimes when we talk about real-time dashboards, we focus on the technology required to deliver the most current data sets. But the real challenge facing many supply chain organizations is being able to view that data wherever they are. I was chatting with a customer a few months back (a manager at a supply chain organization) and he emphasized that where in the past he used a clipboard to track order status, he was now using an iPad. Real-time to him meant being un-tethered from his desktop (his traditional dashboard tool) and being able to view data without having to return to his desk.
The bottom line: real-time isn't just about when you access your data, it's about where you access your data.
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