Defining and Calculating Step Metrics
Randy Hall
Innovative Organizational Transformation Leader | IT Operations Leader | In Pursuit of Understanding the Human OS
Step metrics are used in determining Step health, calculating Step capacity, and identifying process constraints.? Correctly identifying and documenting these metrics is key to the continuous improvement of your organizational systems.
Metrics for each Step of a process will be specific to the work being executed.? Therefore they will be different.? However, the combination of these metrics will provide a clear indication of the health and capacity of your larger processes.
The combination of Step metrics is made possible through standardization of metric definition.? No matter what the metric includes it must have the Focus, System, Devisor, Estimate, How It's Measured, Frequency, Acceptable Deviation High, and Acceptable Deviation Low.
Metric Definition
Examples of Step Metrics:
Process: Purchase Office Supplies | Step Name: Identify Product
Process: Solicit Customers | Step Name: Place Phone Call to Customer
Process: Manufacture TV? | Step Name: Program Hardware
As you can see, it can be tricky to determine the metrics for a Step and even trickier to find a way to measure it.? However, the measurement isn't just about following up on people to ensure they are executing Steps as anticipated.? The strength of estimating and measuring Step performance is in calculating capacity and identifying where constraints are happening.
Multiple Metrics - Single Step
In many cases, your Steps will include multiple metrics for the measurement of different things.? You will always want to measure velocity, but you may also want to measure errors.
Using our 'Manufacture TV' process above, our 'Program Hardware' Step could have the following two metrics.
Step Name: Program Hardware | Metric 1 - Velocity
Step Name: Program Hardware | Metric 2 - Errors
In metric two our focus is on the anticipated level of failure.? In this case, any time more than two errors in a thousand occur you would know that there is a 'specific' error in your process. As long as the errors are between two and four ('Deviation High' and 'Deviation Low') per one thousand your system is considered to be stable with only common errors occurring.
Step Calculations
There are four important calculations you need to understand.
领英推荐
In the following examples, I will use the 'Place Phone Call to Customer' step as it is defined above. Recall that this is the definition.
Process: Solicit Customers | Step Name: Place Phone Call to Customer
Calculating Velocity
Velocity is the estimation and reporting of speed to complete a Step. This calculation allows you to anticipate how quickly a product can be delivered to your customer or the rate at which information flows through your organization. In Processes, the summarizing of the velocity of its Steps defines the speed at which it can be executed.
In our example, we estimated that one person can execute ten calls in one day. Given that, our estimated velocity calculation is as follows.
From here you can easily calculate your specific situation. For example, if you have ten salespeople making calls to customers you can calculate your overall velocity at 100 calls per day. Once you know your velocity it will be used in calculating Step health as defined below.
Calculating Capacity
Capacity allows you to determine how many resources are necessary for the execution of a Step. This information is valuable for planning and resource-leveling. As your business evolves you will need to identify areas where you will need more resources and those where you will need less.
Here we utilize our previously calculated velocity to determine how many people are needed when planning for a change in workload.
Where overall velocity allows you to calculate what you can currently do, overall capacity allows you to calculate what you will need in the future.
Identifying Constraints
You can also use these metrics to identify where constraints exist in your Processes. A constraint is a part of a process that dictates the velocity of that process.
For example, say that the 'Solicit Customers ' process has the Steps 'Place Phone Call to Customer', 'Generate Customer Quote', and 'Finalize Customer Acceptance'.? By understanding the velocity for each step in the process you can quickly identify the constraint.
Steps and Estimated Velocities
In this example, it's clear that your constraint is in the 'Generate Customer Quote' Step.? Speeding up either of the other two Steps will not allow your process to produce any more than 5 Customer Solicitations per Day.? Any effort to streamline your process must be focused on Step Two to make any improvement to your process.
Conclusion
In summary, step metrics play a crucial role in assessing and enhancing the health, capacity, and efficiency of organizational processes. Through the careful definition and application of these metrics, you can pinpoint process constraints, optimize resource allocation, and foster continuous improvement. Each step within a process requires tailored metrics reflecting its unique tasks and outcomes, yet standardized metric definitions ensure consistency and comparability across the board. By embracing these metrics, you can navigate the complexities of process management, driving towards operational excellence and sustained growth.