The Missing Metric

Where's my order?  

Do you ever get that question asked to you by a customer?  Are you able to answer without asking anyone or pulling up a report?  Granted customers typically only ask this if their order is late which is another problem in and of itself but as I have journeyed in my Management Consulting career I am perplexed that many companies cannot tell you with certainty when the product or service will reach the customer from the time the order is placed.

Most companies I work with can show me a Value Stream Map and can show significant improvements they have made in their Lean program yet as strange as it sounds many still do not actively track what the lead-time is for a given value stream.  A typical VSM session results in Kaizen events, generated through brainstorming (there is a better way), that focuses on improving changeovers, standard work, 5S, TPM, etc....  Although the current and future state maps have a lead-time ladder that show the theoretical lead-time it often times goes no further.  Instead, the metric from the VSM session often times involves Overall Equipment Effectiveness (OEE) of some sort for a given process; downtime, performance, quality, changeovers..., while the lead-time of the end-to-end value stream from order to delivery is ignored.  

I challenge you to pick a random order that is in production, or a quote in the office environment for example, and make a determination as to when that order will reach the customer without asking anyone or generating a report.  Not only is it imperative to understand the lead-time it is also important to know when the product or service will be delivered at any point in the process.  

One may think that it is overkill to have such a detailed understanding of a process but it's more of a litmus test to determine if your process is designed for flow, visual flow.  Consider Kevin Duggan's definition of Operational Excellence,  "When Each and Every Employee can see the Flow of Value to the Customer and fix that Flow Before it Breaks Down".  If you have a process that has achieved Operational Excellence by incorporating visual flow then it is at this point that you will be able to know with certainty when that order will reach the customer simply by knowing where it is in the process. 

The missing metric is a result of not performing at a level of Operational Excellence.  We need to start looking at our performances differently.  Instead of focussing on OEE, which is abundantly measured (and often incorrectly), we should instead look at the actual lead-times and track it just as we would anything else.  I would rather sacrifice OEE in favor of a guaranteed turnaround time.  There is a fallacy in thinking that an improvement in OEE will directly correlate to a reduced lead-time.  Does your customer really care what your OEE is, or do they care about when they will get their order?