Are You Measuring What Matters?
If you are not in the measuring what matters business you should be, since it is the essence of getting better than just good. Just as important, even if you are measuring you could miss a critical indicator if your database isn’t frequently updated or you could be wasting your time collecting and analyzing data that is now meaningless or outdated.
Over the years, I have watched supply chain organizations capture, refine and report on the minute details of their operations without any thought about the relevancy or actionability of their metrics. My point here is, if you can’t use the information today or in the immediate future for an actionable purpose — then why track it?
That gets me back to what matters most! Just because you can measure it does not mean you should. Instead, you should only measure a few vital performance indicators in each of your supply chain operations otherwise you will be swamped with data that you will never use. For example, price, standardization and contract compliance is all that is needed to be measured to gage the effectiveness of your purchasing operations. All of the fancy ratios that you can think of won’t give you more information about your purchasing operations than these three key indicators.
You also should be concerned about what has changed, what is missing and what you should stop measuring in your database. Case in point, we recently started tracking tissue sealants with our own Value Analysis Analytics since they are starting to be purchased by more and more hospitals. On the flip side, we stopped tracking x-ray film since most hospitals have gone digital and are using very little x-ray film.
It’s also important to regularly update and refine your measurements to avoid conflicts, contradictions and the lack of believability with your data. All of the metrics that we warehouse, track and analyze for our clients are refined and refreshed on a quarterly basis. Why? Our clients expect us to be right the first time with their Value Analysis Analytics. We have found this practice avoids constant tension, fire-fighting and the lack of trustworthiness of our measurements. You will too!
To sum up, mastering the art and science of measuring what matters is a supply chain management responsibility too, since without good measurement how can you manage your supply chain for peak performance?
Filed Under: savingsblog • Utilization Management
