What Gets Measured, Gets Improved
Transworld Academy empowers future professionals with industry-driven training, mentorship, and real-world exposure in logistics and supply chain management.
A Prelude: The Power of Measurement
Think of the annual health checkup many of us take for granted today. Blood tests, urine reports, cholesterol levels, sometimes even cardiac exams — the data speaks. Doctors interpret, give feedback, and suggest small lifestyle tweaks. The cycle repeats the next year.
That ritual reminds me of how operational performance in blending plants should be monitored. But in the industrial world, measurement is more complex: multiple stakeholders with differing priorities demand clarity, objectivity, and balance.
Drawing from decades in the lubricant industry, I’ve witnessed how measurement systems evolve over time — each stage unlocking deeper insight and better performance. Below are the stages I’ve distilled from real-world experience.
Stage 1: Startup Metrics — Celebrate the First Wins
When a new blending plant begins operations, excitement is high. The first batches, the first fills, the first deliveries — it all feels like crossing a finish line.
In one project, after just a month, I was asked to report performance metrics. With little precedent, I tracked simple numbers: total tons blended, total packaged, number of batches, number of packaging runs. These were classic lag indicators — they told what had happened, not what would happen.
In retrospect, I realized that without normalizing these numbers (e.g. versus capacity), you lose context. But for that early phase, raw numbers were accepted and useful. The goal then is just to establish a foothold and lay a foundation.
Stage 2: Running Metrics — Shifting Focus to Efficiency
Three to six months in, operations should stabilize. It’s time to look deeper. Performance must be measured not just in total volumes but in their efficiency and quality.
That means converting raw figures into ratios or percentages (e.g. tons blended per capacity, fill rates per capacity), and layering on indicators like:
Percentage of “right-first-time” batches and fills
Logistics metrics (deliveries made, load throughput)
Maintenance metrics (number of breakdowns, preventive tasks completed)
These metrics begin to reveal bottlenecks, waste, and areas needing attention. But a caution: under pressure, people may distort numbers. Strong leadership is needed to guard data integrity.
Stage 3: Take-Off Metrics — Aligning with Strategy
After one to two years, organizations often start investing in upgrades and expansion. Metrics must broaden too. They should support strategic goals — not just operational ones.
A balanced scorecard approach helps bring in these dimensions:
Customer / Market: complaints, satisfaction, engagement
People / Talent: training, feedback, retention
Internal Process: refined operational metrics from Stage
Cost / Financial: cost per ton, R&D cost, waste, profitability
At this level, metric selection must be deliberate. Overreliance on subjective or manipulated data is a serious risk. Poor data quality is cited by many leaders as a top obstacle.
Stage 4: Integrated Metrics — Connecting Across the Value Chain
Once operations are stable, measurement cannot stay siloed. It must expand to include logistics, procurement, sales — essentially the full supply chain.
Key metrics here might include:
OTIF (On Time In Full) — do we deliver what we promise?
Inventory performance — how many days raw materials or finished goods stay in stock
Production Schedule Adherence (PSA) — how closely to plan we operated
Beware: increasing inventory doesn’t always improve delivery performance. In fact, high inventories may disrupt flow and consistency. A lean, tightly synchronized chain often beats a bulky one.
Stage 5: Competition Metrics — Benchmarking for Excellence
Once internal alignment is strong, the next frontier is external benchmarking. Comparing your metrics to industry peers reveals gaps you might blind yourself to internally.
To do this, companies join benchmarking exercises or excellence programs (e.g. EFQM). In one example, we benchmarked lubricant supply chains and learned our cost per ton was nowhere near top quartile. That insight drove focused investments.
Stage 6: Re-tuning Metrics — Adapting to Change
Even in mature, high-performing organizations, change is constant. New business cycles, mergers, crises — these force a recalibration of metrics.
During turbulent times, short-term or daily indicators may become more critical than long-range ones. The measurement framework must be flexible — able to bend without breaking.
In It’s Not Luck by Goldratt, a director has to choose between three companies to retain. His decision rests on the performance metrics each has delivered. That story underlines the power of well-crafted, honest metrics.
Final Thoughts
Metrics are a powerful lever — but they must evolve, not remain static. The journey from raw numbers to strategic insight takes patience, learning, and inclusiveness. Teams should help create the metrics, understand their purpose, and gradually raise the bar.
Above all, prioritize honesty, relevance, and adaptability. When measuring becomes part of the culture, improvement follows naturally.
