When Dr Seuss finished “The Cat in the Hat” using only 225 words his publisher threw him a challenge.
Write me one using only 50 words!
So he did.
Dr Seuss returned with one of the most popular children’s book of all time;
“Green Eggs and Ham”
On average we get by on 5,000 words out of approximately 750,000.
That’s less than 1%!
We learn from a young age that individual words have meaning.
As we develop, we learn to string those individual words together.
This is when we get the real value out of those individual words.
When you string words together you can explain something.
As Dr Seuss proved, you don’t need to use many words to tell a story. You have to be selective in the words you use.
All by itself, a KPI is like a word.
An individual supply chain KPI has a meaning, but by itself it is of limited value.
Just as there are thousands of words, there are thousands of KPI’s.
They fall into groups;
…and then split into;
When we string selected KPI’s together they explain what is happening along the supply chain.
They tell a story.
There isn’t a supply chain operation worth the time of day without an extensive mix of their own KPI’s.
But what do your KPI’s say?
If someone asked you to explain the state of health of your supply chain how well could you do it?
If the owner/board member/CEO walked up to you and put you on the spot how would you fare?
What would they see?
A mess of coloured charts or siloed tables of numbers?
When you’re put on the spot, you’ll have all the words – your KPI’s, but how are they strung together?
Instinctively when you speak you form grammatically correct sentences. You will follow the standard grammatical structure of subject, verb and object, e.g.; “She hit the ball”.
(…unless your name is Yoda, and you like to mix the order; “The ball she hit”).
When you’re asked to explain your supply chain’s performance, are you serving up a bowl of word soup, or using the standard grammatical structure?
Here are two approaches in the case where the CEO asked you to explain the state of the supply chain.
You’re in luck.
You’re have your KPI Report Pack of charts and tables which you open to support your explanation;
Situation ONE
“The state of the supply chain?
Well, here on page one our First Time Quality Release is averaging 64% over the past quarter.
And on the next page our MPS has averaged 96% over the same time.
Turning to our Shipment Plan, its performance has only been averaging 60%.
Oh, and looking here at our raw material inventory, it’s 25% higher than I’d like.
When I turn to our Supplier Delivery Performance and Inventory Accuracy, both are 98%.”
(“…always good to finish on a high. Did I do good?”)
Situation TWO
“The state of the supply chain?
We have been dealing with several issues over the past quarter.
We are making the products we need, but not at the quality we need which is impacting the servicing of our customers and our cash flow.
Our Production-to-Plan performance has averaged 96%. By itself this is a great result, however, we have a problem with that output.
Our First Time Quality Release is averaging only 64%. This means we have to break into the schedule to re-work a large amount of our production.
This unplanned re-work is consuming manufacturing line capacity planned for other production.
There are cash flow implications as a result. In dollar terms our imported raw material inventory is 25% higher than it would otherwise be.
The quality problem is also impacting our customer service.
Our on-time shipping of orders to customers has been averaging 60%.
To address these issues we’ve been…”
Situation One isn’t wrong.
It has all the facts, but it’s not telling the real story.
It’s rattling off KPI’s.
It’s a word soup.
Situation Two tells a story…
It uses fewer of the same KPI’s but puts them into a story.
It links them together into a narrative.
It conveys a flowing picture of the state of the supply chain.
It highlights the impact and areas needing focus.
The CEO walked away with a clear, actionable answer based on facts.
“Quality issues from production are causing grief internally and most importantly, externally”.
Most people get by using less than 1% of the words in the English language.
The same may apply with your supply chain KPI’s.
Think about those you have.
Just because your organisation measures something doesn’t mean it should be measured.
Do all those KPI’s combine to tell a clear story?
Challenge strange in-house KPI’s where you see them.
Ask what purpose they serve.
Ask what value they add.
Do they help tell the story that needs to be told?
If you don’t understand it and the owner can’t explain it, then why measure it?
Can you or your team tell the company’s supply chain story with only a handful of your current KPI’s?
How many do you need to do it? (…we’re not dumbing things down; we’re tighten things up).
Channel your ‘inner Dr Seuss’. I’m sure you can do it with less than you’re running.
See if you can
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