-Ian Walsh, Managing Director, Intent Group

I thought I’d follow on from my pre-Christmas article “What gets measured gets managed” with the next step in continuous improvement: data analysis. This can sound ominous but how you design and implement your analytics is critical to success.

Before starting to improve performance and productivity you need to identify and understand the losses and wastes associated with your process. For production lines this could be lost time, lost speed, yield losses, giveaways, lost labour, or downtime by key equipment.

Ideally, this information should be grouped by cause such as planned downtime (changeovers, meetings), quality losses or rework, or some other cause.

A good data system should tell you major losses, and their resulting impact and frequency. And it will be able to slice this information by shift, by day, or by any other time period you need.

This data is essential to understand the nature of the loss, establish the source of the loss and then work on the approach to fixing it and futureproofing it and other systems in your workplace.

At a simplistic level, this is the role data plays in your work: find, analyse, fix, prevent.

It’s worth noting at this point that your data analysis can be done manually and using spreadsheets – in fact this is a position that many businesses starting to dip their toes into the data analytics pool find themselves in, but there are much better tools available now that really ought to be used.

The future (and ideally present) of data analysis is in tailored Internet of Things (IoT) software where you can plug your raw data and it tells you, in real-time rather than retroactively, the story that you need to know, for fixing and optimizing processes.

Why wait until the end of the day to discover you are underperforming when it’s better to know at the time, while its still possible to address the issues?

Each loss should have a target (what do you want to get it down to – in some cases this will be zero, but others it will be a reduction) so that you know when to move on. The trend will show if it is under control or not.

It’s important to have a mixture of leading and lagging measures being captured and analysed. Lagging measures are management numbers on performance. Leading measures are in process measures which can provide real time information about losses which can be acted on immediately.

I find that data should be trended typically as a rolling 13-week average (a quarter). This gives an adequate and reasonable timeframe to see if the actions being taken to address the loss are effective, while “smoothing out” any other data discrepancies that might occur with weekly or monthly reporting.

With good data analysis, we can compare performance with benchmarks (industry specific or global) and plot a path for greatness. It is also good to have a view of our “gap to perfect” for our capital assets (how much can we sweat them).

It really is worth checking all your assumptions to get a very thorough view of performance, bottlenecks, wastes and losses.

The number of companies spending money on capital they don’t need is staggering. They believe there is no room for further improvement, and they must buy more or new capital. In truth many just need to understand their data and form a process for addressing the losses and wastes.

If they were rigorously identifying, prioritising, and addressing losses and wastes, much of this capital could be avoided. I have seen large well-known companies reporting efficiencies inaccurately resulting in hundreds of millions of dollars in unnecessary capital being spent.

So, have you determined the key losses and wastes in your processes? Have you aligned your data capture system to capture this information? Have you developed leading and lagging metrics for each level of the organisation?

Have you developed an escalation matrix for these losses? Have you trended information against targets? Have you developed the right reporting systems to deliver this information so that action can be taken to eliminate or reduce your losses?

If you said yes to all of this, then you’re in good shape – unfortunately part of a very small minority in NZ.

If you don’t have good information feeding into your business, and your reports are always lagging or driven off spreadsheets, then it’s time to give your business a boost through better, more timely accurate data to drive your performance to the next level. Let’s have a chat.

You can contact me or my team here.