An important measure of the effectiveness of some companies should undoubtedly be "On Time Delivery". It is essential that there is a measure of the relationship between the company and its customers.
True measurement of OTD can show up deficiencies in capacity, productivity, quality and supply chain difficulties.
However, in some cases, OTD is used as a measure of management effectiveness and so enormous effort can be placed on people and systems to REPORT good OTD figures.
If a senior manager is rewarded for his improvement to OTD then it is in his financial interest to report an upward trend or to maintain a high performance figure.
This can result in non-added value tasks by IT, Customer Services, Logistics etc to manipulate the figures to placate managers, directors, executives while doing absolutely nothing to improve the relationship between the company and its customers.
KPI's that are designed to improve the business MUST NOT be used to measure the effectiveness if individual managers as this will ultimately lead to the demise of the business.
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