A radical approach to metrics development would be to inventory the engineering process capability. In a plant that does process capability studies, the plant usually has a list of all its processes and knows the process capabilities of all its production lines. In fact this is required for APQP (Advanced Product Quality Planning). APQP states “Product quality planning is a structured method of defining and establishing the steps necessary to assure that a product satisfies the customer.” What if this was applied to the engineering factory?

We’ve all heard the saying, without data you’re just another person with an opinion. But many times we don’t practice this. Metrics are great, as long as my metrics are only shown to me. I wouldn’t want anyone to see my business. I’m working as hard as I can, and I really don’t need anyone else’s help. Metrics are not something to be afraid of. Metrics are a way of inventorying the system. With metrics you must have an open mind and do an honest assessment to try and understand how the system is operating.

Psychology defines denial as ignoring facts because it is too overwhelming to deal with them. Facts are ignored not because we are bad people, but rather because we’re in data overload. The bottom line of metrics is to look at the system as a whole, to ensure that the fear of metrics is not present but to look at the system in order to improve it. Deming’s 8th and 9th point apply here:

Point 8: Drive out fear, so that everyone may work effectively for the company.

Point 9: Break down barriers between departments. People in research, design, sales, and production must work as a team, to foresee problems of production and in use that may be encountered with the product or service.

Leadership and those being measured need to be involved in order to assure the integrity of the metrics.

By concentrating on delivery, other metrics become exposed. But time is the one variable that can’t be stopped. It’s the game time of business. In manufacturing, so many items of each type need to be delivered per the schedule, if not, it’s not 100% delivery. This can cause disruptions later down the line at higher assemblies and disruptions for the customer. Similarly, engineering needs to understand the major pieces of the engineering factory, which need to be monitored to drive overall delivery of programs and launches of new products on time. After concentrating on delivery for a while, people in the system will learn what items are on the critical path and what the bottlenecks are of the system. When these bottlenecks are addressed and positive results in delivery performance metric happen, the cycle of continuous improvement will be started.

Quality

Quality is the metric that is the test of management’s integrity.  If your words say one thing about quality and your actions another, you’re sunk. When looking at the metrics of delivery, cost, and quality think of the analogy of body, mind and soul or physical, mental and spiritual. Delivery is the physical; quality is the soul of the organization. 

One widely held quality philosophy is that if you see something wrong, it gets corrected before it is passed to the next stage of production in order to mitigate.

Cost

Cost metrics are the third major interconnected metric of the system. I like to refer to this as the mind or mental metric. Cost metrics are a necessary evil. Business is in business to make money. Not making cost goals is like being caught on steroids in the Olympics. You are out of the game if you don’t conform to the money constraints.

Besides the traditional department budgets and program budgets there are other cost metrics such reuse metrics, complexity reduction numbers, hours per task, downtime and uptime of processes. A good example of this is network uptime. When it’s down, many people are unable to do work. Utilization is another important metric. In a month, how much is the item being used? Utilization can be calculated for equipment, facilities, meeting rooms and vehicles. Workload model, capacity planning, headcount charts, and retention also fall into the category of cost metrics. Cycle time and wait time also have a dramatic effect on cost. The principle of lean manufacturing is to keep things “flowing.” So once something starts, keep it flowing. Wait times is where loss and waste is. Examine wait times and where items are not flowing in the engineering factory.

Stages of Metrics Development

There are definite stages of metrics development:

• Totally clueless
• Where to start?
• Divide and concur
• What do we do with the numbers?
• Put it on someone’s performance appraisal
• Have a meaningful metric (not too many, not too few, but just right)
• The bigger system asks for it in a common format (this facilitates lessons learned).
• The customer metrics improve as a result of many activities being driven by the right metrics.

How to Look at Metrics

There are questions that can be applied to most of these metrics. What is the trend over time? Improving or degrading? What is the rate of change? Is the rate of change fast enough? Is there a need for a significant (as defined by statistics) change in the process? What are the variables that contribute greatest to the system performance? Apply Statistical Process Control techniques: Is the system stable? Is it capable? Define this capability using a Cpk number.  Can you say you are capable if you can’t quantify your capability?

Conclusion

There are certain attributes that are needed to become world class. Speed, both vertical and horizontal, are comparable to delivery. Flexibility also relates to delivery. Techniques from basic to complex come from training, knowledge and practice. Strength comes from training, people and the system. Keep in mind that you are as strong as your weakest muscle. Endurance is equivalent to day after day having sustained performance in delivery, cost and quality. Strategy is needed and demonstrated via the business plan and leadership. And the last attribute needed to become world class is to have the correct attitude and this is equivalent to leadership.

Practice, practice, practice. That is how to master new skills. The Shewhart cycle has the four steps of plan, do, check and evaluate. Planning evolves deciding what and how to do something. Then you try it and observe (check) what happens and then study the results. What did we learn? What can we predict?

 Practicing a new skill involves doing these cycles over and over. Practice is very important. Someone hears about a new concept and thinks, I can do that. Can you read or sit through a presentation and be able to do the skill talked about? Would you want to have a surgeon that had read how to do a surgery or one that had done the surgery a number of times? An athlete needs to train, train, and train. Use it or lose it. It’s that way with many skills.