Ask Andi: We’re trying to improve employee efficiency. To do that, we need to refocus. We’re constantly scrambling. There’s a lot of information out there and nothing is tied together. How do we improve it?
Thoughts of the Day: Improve employee efficiency and you improve productivity. Operations relies on other departments for information and analysis. Become more productive and profitable. Connect and merge operations information and track results. Build teams from across the organization to work towards solutions that deliver the results you want.
Improve employee efficiency
The Operations Department is the heart of the business. It’s usually the largest, most expensive department. And it intertwines with all the other areas of the business. It can be a challenge to gather information from across the organization. To set goals and measure outcomes in Operations. It can cost $10,000 or $100,000 or $1 million or more. That is to say, purchase and implement a complete dashboard reporting system. And you still may not get what you want.
Improve Operations. Build the foundation without spending additional money on systems, with just a few hours of labor. Build an internal dashboard. Agree on specific data points that have the potential to yield actionable information for Operations to use. For example, track and analyze data via spreadsheets and graphs. Gather information from prospect customer database and the accounting system.
Manage, control and supervise
Ask a company-wide team to brainstorm factors that make your company unique operationally. Embed measures related to those unique factors in the dashboard. Meanawhile, encourage your dashboard team to compare the performance of one product or service to another. Ask them to come up with ways to improve the results for one or more of the products or services.
Think quality and fit to customer needs are important? Measure waste thrown out during production, refunds issued for poor performance, units returned, customer complaints and testimonials, re-orders, and upsells. Divide by total units produced or dollar value of products or services delivered. Likewise, speed to market important? Track the number of days it takes to get from order placed to order delivered. Compare what’s being done right with the things that arrive fastest. Look at how lessons learned from the fastest deliveries can be applied to the laggards.
Firstly, use P&L and Balance sheet for standard ratios, to see how your company’s Operations Department is doing in comparison to other companies. Secondly, gross Profit, Net Income, Cash on Hand. Further, Accounts Receivable, Inventory on Hand, are some of the measures you want to use. Moreover, all are divided by revenue in order to benchmark results.
Goods, services and people
Help everyone in the company get on the same page by establishing goals for profitability, productivity, exit value, marketing output, performance quality, and overhead measures such as cost of lease vs. revenue and revenue per FTE. Ask teams from across the company to meet regularly to compare performance vs. goals. They can set improvement targets for the next period and develop and follow up on actionable next steps.
Make sure that your data collection systems are accurate. Garbage in will result in garbage out. Teach people doing data entry why it’s important to put incorrect information. Encourage them to ask questions if things seem off. Cross-check data to spot errors: units produced compared to revenue invoiced, hours worked vs. jobs in the process, new orders vs. ongoing orders. If you see spikes, find out if it’s a data entry problem or an issue in Operations.
People throughout the organization will become more familiar with what’s going on by reporting on and analyzing data regularly. Familiarity makes it easier to spot something that’s out of order, identify successes, and set goals for the future. Setting up teams helps to ensure that everyone has a vested interest in achieving the goals.
Looking for a good book? Performance Dashboard: Measuring, Monitoring, and Managing Your Business, by Wayne Eckerson.
