The entire team must participate to make delivery reliable. It isn’t just the operations or production departments. Perfect execution is a commitment for the whole organization.
Involving people begins with measuring the right things; setting the right expectations for performance. Management decides what the measurements are; what get measured gets done.
There seems to be so many different things that are measured, that it’s hard to pick one single measure that expresses progress towards the mission of the organization. This is analogous to a sports team that is unaware of the goal of the game. We agree that the main objective is to score more points that the other team. If we do, we win. The offense scores, the defense prevent scoring. Each subgroup has its own measurements, but the objective of the game is always foremost in player’s minds.
Reliable delivery – not efficiency – is the goal of production. The purpose of production is to make products for sale, not to spend as little money as possible. But, looking at the way some managers behave, you would think that the opposite is true! Think about a restaurant. Why should we have a kitchen in the restaurant? It makes the food customers eat. It’s the same in manufacturing. Why does a factory exist? It makes things to sell! The number one goal for the system is customer satisfaction.
Management must establish on time delivery (to commitment) as THE key performance indicator. Research demonstrates that this component of your service is the most important gauge of customer satisfaction. If you’re doing well here, you can be confident your customer satisfaction score will be high. It’s also an indicator of the stability of your order fulfillment system. Good on time delivery performance indicates a stable system, one that is under control. If you can’t keep promises, your system is out of control; it’s unstable.
The point of the measurement is to create a unity of purpose. What you measure tells the organization what is important. Without a common purpose, you team can never be unified.
My next blog post will focus on the order promising and buffer diagnostics parts of the system. Do you want to read ahead? Check out the full white paper titled “How to Build a Reliable Delivery Process” here.