Dec 03 2014

I’ve written a few times about using visualisation to make problems obvious. Most people understand the thinking behind that & I have few issues when I discuss this with people. However, I have had many occasions where the gathering of performance data, whether around Safety, Quality, Delivery, Cost or People is done by “some other department/function”. I then ask the local team how they identify a problem from this information.

In most cases the metrics are fed back on a regular basis, whether that is weekly, monthly quarterly or yearly the issue is the same; the feedback loop is too long and indirect. Two aspects that make it significantly less effective than it could be.

If we take these two issues separately we’d start with the length of time for the feedback. With any performance measure, the faster the feedback, the quicker we can do something about it. I remember one specific instance where the finance function was feeding back on a weekly basis the cost of the overtime being worked by the unit. The weekly feedback was provided on a Monday, but not for the previous week, it was for the week before that.

Any significant increase in overtime wouldn’t be detected by those who were responsible for managing it for up to two weeks. Maybe this isn’t an issue for some organisations, but for many, 2 weeks of increased overtime can  be the difference between profit & loss for that given time. Not to mention it is usually a symptom of some other problem which may further delay our ability to respond appropriately if it takes us another few days to figure out the root cause. You may need to continue with the higher levels of overtime to ensure delivery to your customers during this analysis. Further reducing your profitability. The faster you get the feedback, the faster you can do something about it.

In this case we went from weekly feedback 2 weeks in arrears, to daily feedback for the previous day. They were able to reduce overtime costs from 12% to 3% in a matter of weeks. Come back next week & we’ll discuss the impact of the other aspect – indirect feedback loops.