Describing your operating processes will hand you a practical tool to measure how well your organisation is doing in certain areas. Below are some tips to help you maximise the use of process descriptions.
First of all, it is important to measure and monitor different kinds of parameters for each type of process. For your absenteeism policy, you may for example register the number of employees absent for a certain time. This is an absolute parameter with an absolute figure.
When your company grows strongly, figures won’t mean so much. An increase of the absenteeism can possibly be explained in that case because you are employing more people. In those cases, we recommend using relative parameters, taking into account the proportionality of figures.
Absolute versus relative
Another typical example is following up the number of consumer complaints. These may rise, but that does not necessarily mean that you are not doing well. It is perfectly possible to sell 20% more, while the number of complaints rises with ‘only’ 10%. In absolute figures, however, you are doing worse in terms of complaints, proportionally you work better.
Presentation with graphs and moving average
Parameters are often presented in large Excel tables. These don’t tell us much, though. We recommend using graphs which can show trends. A nice way of showing trends is by using the moving average, which allows you to calculate the average of the past twelve months each month.
When we apply this to our example of consumer complaints, you can divide the number of complaints by the sales average and calculate a twelve-monthly moving average each time. And this will give you a perfect view of the evolution of consumer complaints.
Looking to the future
Most parameters will look back to the past based on a registration. When we use leading indicators as process parameters, we can predict the future and make timely adjustments. A leading indicator therefore has a predictive character.
An example is the ‘number of overdue improvement actions’ parameter. For example, you can calculate the ratio between the number of overdue improvement actions in relation to the total number of improvement actions. When the moving average of this parameter goes up, you still have time and space to intervene.
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