Cumulative Results Camouflage Real Performance

Share: FacebooktwitterredditlinkedinmailFacebooktwitterredditlinkedinmail

How you compute and present a result affect the message that would be communicated. Often, cumulative numbers are used but they are not very informative.

Let’s look at supplier’s performance for a camera manufacturer.

The manufacturer relies on multiple vendors for parts, so it is important for them to monitor on-time delivery to ensure that parts are always in stock.

You can measure on-time delivery by supplier, by part, by month, or by year.

On-time delivery for the year is an average ratio. This high level ratio could serve as a starting point to evaluate the performance of that supplier in general. If the ratio falls below the target, it might be sufficient cause to terminate the agreement.

Consistent delivery performance is important, so it is necessary to look at month-to-month trend. When there is significant fluctuation, the manufacturer would need to have a discussion with the suppler, identify cause, and initiate action.

To drill down one level lower, it would be helpful to look at delivery performance by part. It makes it easier to focus conversations on specific issues.

Cumulative results generally is not very useful because it doesn’t help to uncover problems. Whenever possible, measure at the lowest denomination and roll up numbers when necessary.

Leave a Reply

Your email address will not be published. Required fields are marked *

To maximize business results, call Connie at 604-790-1220 or email us today!