Enhanced financial metric reporting can be achieved through the Integrated Enterprise Excellence (IEE) Business Management System. IEE satellite-level metrics report financial metrics from a process point of view.
Today I talked with a former student about an internal organization’s performance metrics. They found, as I see in most organizations, a great deal of process/product level metrics but very little high level metrics. Nearly all were about quality, with only a few about the lead time/cycle time and none about cost. What does this imply about the organization?
1) They truly care about quality. In this company I know this to be true. All of the improvements, focus, and reporting on producing high-quality product, which they do.
2) With very little tracking of lead times and cycle times in each business function, they are probably late in completing their functions, which may result in being late to the market with new products.
3) With no tracking of cost, I would assume that their activities cost significantly more than they expect. If the lack of financial measurement at the business function is pervasive through the organization, I would expect that they have an increasing operating cost issue, which would lead to reductions in profit. This company has this problem.
The lesson, when you see a business function or business that is not tracking one of the three primary performance areas (cost, quality, and time): they probably have issues with the management of that area, and I would start there in my improvement efforts.
Enhanced Financial Metric Reporting: Integrated Enterprise Excellence Satellite-level Reports
In IEE, financial metric reporting can be reported throughout the organization via an IEE value chain and its predictive 30,000-foot-level metrics, where the metrics for each of the functions is to consider cost in addition to quality and time. An example IEE value chain is:
