Manufacturers need to reconsider the power of real-time production metrics

So says MESA representative Julie Fraser, a senior researcher with analyst Industry Directions, co-opted to work with the organisation. MESA is now setting up global industry working groups for 2007 to look at, for example, metrics-based diagnostics for continuous improvement in a variety of sectors. “It’s about how do you standardise getting faster data collection and feedback, and faster reflection of operational results in financial metrics – because those that do are the companies that are doing best,” says Fraser. “There’s a lot of evidence that automated plant floor information systems play a key role in helping companies to improve performance against metrics. That’s not exactly a shocking finding but it’s more evidence,” she says. “There’s a lot of companies that want to be able to manage using hard data, not just rule of thumb and intuition, but there’s a very, very long way to go.” She believes that the pendulum is swinging for business managers away from cost accounting alone towards finding operational metrics that map to financial outcomes. “Managers know they need to understand their facility’s capability to make breakthrough changes – how they can leverage their manufacturing capacity for competitive advantage. “It’s about them understanding their flexibility or ability to innovate – maybe by bundling in accessories, services etc or by being able to ramp beyond the plan for NPI [new product introduction]. People don’t even measure that: they haven’t been thinking strategically about their production capabilities.” “We often hear the view ‘management expects us to look better year on year even if there’s a more complex mix of more complex products being produced’. But innovative products can drive competitive advantage – so maybe businesses have been measuring the wrong things.”