Measure What You Manage

Recently Howie Fenton, senior consultant with NAPL, wrote an article for Print CEO in which he recognizes the importance of metrics: “To measure, track and benchmark operational and financial performance.” John Sarantakos, IPMA president, in In-Plant Graphics, offers an outline of “effective reporting” that focuses on using production reports as marketing tools.

Both are correct.

I would take measurement a step further. Peter Drucker, management guru, is often credited with saying “You can't manage what you don't measure.” This is a broad statement, to be sure, but you’d be surprised how many in-plant managers don’t measure anything. When I do an in-plant assessment, I ask to see copies of production reports and planning documents. The production reports tell me how the manager uses data to track production and performance and the types of information s/he passes on to management. The planning documents show how the measures are used—that is, how the manager manages.

As managers we should use metrics to support every major decision (and most minor ones as well). Need to justify a new machine? Evaluate the performance of a machine operator? Submit a budget request? Plan your paper inventory? Justify your operation? Understand what your customers think of you and your department? Report on successes and failures? Everything can and should be measured, and those measures should be the foundation of your decisions.

Sounds pretty straightforward, but I continue to be amazed at the number of in-plant managers that don’t count stuff. Very, very few of the shops I work with measure anything, and those that do, don’t cover some of the important areas.

In one case I worked with a client that wanted to buy an envelope press and had even included it in his budget. The only problem? He didn’t know how many envelopes his organization needed. How can you argue for a piece of equipment if you can’t articulate the demand?