Dashboards, Control Towers, Cockpits, Scorecards, Control Panels, Visibility. Every Manager fancies one. Rightfully. Given the current App economy that has made life so easy for so many of us in so many ways.
A Control Tower App can be so empowering. Esp. if you get to know just about everything you need to know at the start of the day. Meaningful, well-classified and actionable metrics that collectively convey just about everything re health of your business or function. About your own performance as a manager! At a glance. In less than 5 minutes. While driving to work. Makes for a productive day at work as usual. An app for supply chain manager, An App for finance head. An App for category manager. An app for Human Resources manager. An app for the CEO. It lends huge legitimacy to their real jobs. A set of KPIs. A set of summary statistics, A set of descriptive stats. A set of predictive stats (I will call it Expected values of certain KPIs in near future). A set of current Alerts. A set of graphs. A set of notifications. A set of upcoming events. A set of comparisons. A set of top ten and bottom ten lists by this and that criteria. Add some drilldown capabilities too for self-help insights anyone cares to slice further. As it relates to their roles, functions and expectations in the firm. So many things to do. So many guys to pull up and seek explanation. So many things to retro-fix. So many shortages to fulfil. So many ‘facts’ to challenge. So many people to answer to in the next meeting with CEO.
A Role based Relevant set of KPIs, Statistics and forward looking insights in one single place with a consistent look and feel is what Business and Functional Managers always wanted.
That’s a mouthful!
But strictly speaking, very few implementation projects had cockpits and dashboards development as part of any large scale transformation initiatives. It was at best a lip service. ‘Towards the end’ thing. No cross functional treatment that it needs. Apparently very few managed to get the ‘Dashboards’ they wanted. The usual ‘reporting sub-tracks’ within a ‘module’ (esp. first time implementations) passed off as some sort of ‘intelligence’ requirements that respective managers had. Like summarized lists, a couple of statuses and occasionally an email notification of a critical situation like shipment delays made for all the intelligence they could consume. Occasionally some data maintenance utilities also passed off as ‘intelligence’. If there is an expert BI consultant around, he would offer to ‘design’ just about every ‘report’ on BW. Incl ad-hoc lists that one could get on the fly from their ERP systems. Like sales to date by this geo and that category. Followed by a lecture on why you should not use ERP systems for generating reports! (these days they don’t). Typically taking a month to build one from cryptic sounding data sources meant for implementation by discovery till you find a relevant one. Else build one from scratch. Thanks to documentation. Want another column or a new ‘advanced’ metric ? You engage him again. It is like a 10000$ affair per report esp. when there are half a dozen analysts taking a couple of weeks to decide the ‘layout’ to make it sound ‘intelligible’ enough for the demanding customer (Manager from a top B-School). And then they expected from the managers to login to so many systems to see so many things on a daily basis. Many of them not even real time. Not actionable.
Reports, KPIs and ‘Analytics’ in SAP was all over the place. ERP, BW, SCM, EPM, BPC.. CRM, SRM, Excel. No one single source met the needs of functional intelligence that discerning managers sought.
How do you go about building the right role specific dashboards?
A Cockpit for Supply Chain (Whatever) Manager
- What descriptive and predictive KPIs and summary data functional managers seek on a daily basis? Inventory days supply? Supply shortages? Overage? Underage? Inventory expiration risk? Capacity Utilization (who cares?)? Shipment delays? Fill rates? Inventory turnover? Freight expedite costs%. Freight recovery. Average cost per ton mile? Last year? Next S&OP meeting, Cost of forecast error, Out of Stock products, Out of stock warehouse, ATP to average demand – Top 10, Bottom10.
- Does every firm out there ‘strive’ for Perfect Order Fulfilment? Does every firm take every KPI equally seriously?
- What SCOR KPIs make sense for a consumer electronics contract manufacturer vis-à-vis a Unilever or a Whirlpool?
- What is the Supply Chain Organization of the firm? How are managers roles defined? What are they expected to manage? Are they expected to track trucks in transit (expected delivery delays) or to improve demand plan accuracy? How do you want the Cockpit to show the shipment delays? As data visuals or as Alert messages to your 3PL company?
- Is there a ready made taxonomy of Supply Chain KPIs based on Industry emphasis (not everyone out there is motivated by Gartner’s top20 ITO and 3 year ROA though that can at best serve to juxtapose)?. If I were a Supply Chain VP of a Pharmaceutical company, I would like an insightful KPI on expected returns from the market. That is a good proxy for how good is the quality of demand and supply plan. Typical formulation firms expect to keep it below 1.5%. Some call it inventory expiration risk. Anything above 2.5% means the whole system needs refresh
A Cockpit for CFO?
COGS, Return on Assets last quarter, Expected ROA next quarter, Current Cash to Cash cycle time, Cost of working cap, working cap tied in inventory Gross Profitability YTD, AP, AR, Abnormally overdue payables
A Cockpit for CHRO?
Attrition Rate, Employee Costs%, ARPE, Current SCR (where are the data sources?). Absentee rate, Hiring cycle time, Open positions and applicants, #full time vs contract employees, Average retention rate, Gender diversity, resignations in process, hires in process, Employee Satisfaction index, # Retirals settlements due, Payroll costs, Department costs%
A Cockpit for CMO?
Category Revenue Growth YTD, QoQ, Sales Cycle time, Gross Profitability YTD, Promotions in Progress, Promotions effectiveness index, Sales Targets current quarter, Non-Moving inventory at Warehouses, Key Account Sales, Top 10 products by revenue contribution, Bottom 10, Top 10 products by gross margins. Bottom 10.
A Cockpit for CEO?
Revenue Targets Attainment (Budget to Sales), Current Market value share, Current market volume share, Exp. market share, Attrition Rate, Gross contribution margins top10, Return on Assets, Accounts Payables, #Customers, #New Products, #Vendors, #Available warehouse space, Total unbilled Inventory, Top10 markets by Revenue, Top 10 markets by Volume.
How should you group the KPIs?
Every firm is unique. Culturally. What is important to them is not necessarily important for others. The language is different. The KPIs and ‘formulas’ are slightly different.
How should you separate the KPIs?
Keep a few KPIs confidential. Everyone need not know everything. Keep a few KPIs exclusively for the CEO. Nice to know is ok as long as you do not need to care.
How About Benchmark?
Internal ‘ideal’, last year, external, competition. Gartner top20.
How do you measure Manager’s Performance?
Is it all about numbers? No human element? How do you know if managers took proactive decisions? How do you measure employee engagement ? Delegation? With report cards available on a minute by minute basis. What internal projects did the managers take to fix the root cause? or did the finance budget some monies towards such onetime project? Can the manufacturing head blame the customer supply chain manager for bad capacity utilization? High cost of production because of ‘bad’ production schedules? It is a chain reaction. One thing leading to another but you do what you do best. As long you can formulate the problem in context. In entirety. There is always a root cause.
These are important questions. You can’t always blame the Supply Chain Manager for shipment delays. You can’t fire your 3PL for things out of his control. Like a broken truck or a transhipment delay awaiting another container ship.
