How We Serve You : White Papers
From the Boardroom to the Shop Floor and Back:
A Framework for Achieving Organizational Alignment
The Deployment Process
Once measures are defined by the senior management, a process is needed to translate those measures into something meaningful for everyone. The interest at the top of the company is usually quite broad where as further into the organization the measurements become increasingly specific. The measurements should also be relevant to the work performed by the people or the act of measuring will add no value. The deployment process should be well structured and carefully managed to allow for the selection of measurements that contribute to the direction of the company. Figure 3 provides a graphic representation on how the measures at each level should connect to those at other levels. Plant management will develop the first matrix linking the strategic initiatives to measures that are important for the facility. The second matrix will be developed by different departments, until the measures reach the shop floor.
It is important not to dictate the measurements to the people in the company. Instead, care should be taken to communicate the measures that are important to the organization and why. Then teams, units or functional groups, should be allowed to select the measures that they believe will be relevant to enhancing the progress of the company. Encouraging teams to select the measures in their area allows them to own the process of monitoring and responding to the measures in the right way. Each level of the organization can use a matrix similar to figure 3 to ensure there is linkage to the levels above.
Measures at the top of the company are broader in definition. However, as measures move down they become more specific and are more narrowly defined. Figure 4 shows an example of how measures are linked at each organizational level. The corporate financial measure, Return on Net Assets (RONA) identified at the top by senior management is linked to the next level by measuring Inventory turns and output/equipment. At the Plant Management level, these inventory measures lead to the consideration of manufacturing cycle time, inventory days on hand and vendor lead-time. At the department level, the measures that are connected to those above are machine downtime, First Run Yield and the number of unplanned product changes. The process drivers which impact downtime are the time it takes to changeover equipment after a production run, the number of equipment failures, and the number and condition of the parts available for a production run. The ability to link measures enables managers at each level to control his or her performance to the measures identified. Linking the measures in this way provides the structure for ensuring constancy of purpose. All individuals will be familiar with what is important and how they support the overall direction of the company.
This structure is useful in departments that have not traditionally tracked and responded to performance measures. For example, in considering safety, the corporation might be interested in the accident rate, while the plant manager will evaluate the number and types of accidents in each plant. Each department might be concerned with and keep track of the number of unsafe acts. This measurement is focused and may be considered as a leading indicator of accidents.
The following lists some criteria for selecting the right measure throughout the company:
- The measures selected should relate to the previous level. The use of the Deployment matrix will help groups to link measures to those of previous levels.
- Measures selected should also be related to the ability of the unit to satisfy internal customers. For example, the preventative maintenance department should be concerned with their response time to a request to fix equipment, the number of times the same equipment needs to be repaired, and the ability to accurately predict and execute the maintenance program before the equipment goes down.
- The measures should reflect the activities that are under the control of the respective individuals. Individuals should not be collecting and monitoring data of other areas.
- Measures selected should drive action. This means that they should be leading indicators rather that lagging indicators.
- The team should have the ability to monitor and review the measures selected on a regular basis.
