Alison Smith had a very interesting article in Manufacturing Business Technology where she highlights the need for an Operations Warehouse containing Key Performance Drivers (KPDs) which in turn drive outcomes or Key Performance Indicators (KPIs). This concept is central to the thinking that has gone into myDIALS where we believe the KPDs are most important and we need to relate KPDs to KPIs across value streams so we can show cause and effect. While KPIs show the end results, KPDs provide actionable leading indicators that help focus initiatives to improve performance and hence results.
Taking this concept a little further, many of the most interesting KPDs live within partners in the supply chain and delivery chain and are outside the enterprise. A company’s ability to manufacture and deliver on time with appropriate quality is dependant upon on-time delivery of quality raw materials and components from its vendors. Similarly, leading indicators of demand reside within sales partners particularly within multi-tier distribution models. Having visibility to these KPDs provides greater understanding and lead time to identify and address performance issues.
One of the best recent examples of the need for better visibility into partners within the supply chain is Boeing’s delayed 787 program. At a recent summit, Tim Opitz, director of production operations and support & services for Boeing’s 787 program was asked to reveal the biggest lesson learned from the company’s push to bring the 787 to market. Opitz said the collaboration driver has been key. “The single biggest thing we’re trying to figure out is how we do that integration” across the company and outside its walls. “They don’t naturally come together,” he said.
Providing timely visibility of relevant KPDs to all the decision makers across the supply chain delivers common understanding, encourages better collaboration, and supports value stream performance improvement.
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