A visual management system (VMS) can encompass all aspects of an operation and have a different shape depending on the team that uses it, so we will not try to guess what yours will look like at the end, or describe an ideal version of VMS that will cover every particular circumstance. Rather, let’s talk about how to get started with a dashboard that provides good visual management capability in most operations.
First let’s talk about the location. Visual management should facilitate your daily walks as well as enable the autonomous management by the first line team. For this reason, you should place visual information where it’s convenient to meet, discuss, and update but also next to the operation. It should be a place where one can easily to see the information and not hidden behind columns, walls, or any other plant artifact. Sometimes it is difficult to find a place like this, so in certain cases you will need to create the surface or structure to display the information. I’ve used all different materials to build what the teams need: I’ve built structures out of wood, welded steel, bolted aluminum, Cre-Form as well as Flex-Pipe. Sometimes it’s very simple because you have nice wall-space right next to the work location. The important criteria is that when done, the information is easily accessible to the eye when you are in the area where the work is done.
There can be many different types of visual management boards and tools that you can put in place but the most generic version keeps the team’s score over time. This might seem simple but it does the job every time. These type of boards are often called KPI boards (Key Performance Indicator).
Key question: What do you need to specify to know whether you are winning or losing? You need an actual score and a target or goal to see if you are achieving it or not. Perhaps you can track period by period if the actual value or score met the goal or not. This would show us our trend in performance. Maybe we can use GREEN for meeting the goal and RED for not meeting goal. Simple right?
Here is an example of a KPI board that uses the color scheme described above as well as charts that help highlight the trends. It helps the manager as well as the team see at-a-glance what the current overall performance is like.
It’s also a good idea to make the KPI board a “balanced scorecard” and know how you perform not just for one aspect but for a variety of aspects. This will paint a more comprehensive picture of whether we are really “winning”. Otherwise we could be winning at some aspects like “keeping costs down” but losing in the customer’s eyes by not “meeting their expectations”.
Some aspects determine whether you are pleasing the customer like “Quality” and “Delivery”, some will let you know whether you are keeping the environment safe and compliant, and some will let you know whether the team is winning on the profit side by managing costs appropriately. If you’re bold, you can also look at the level of improvement or innovation for the team and its processes.
With so many criteria, it would be a disservice for the team if we do not prioritize them. To solve this, using a principles-based perspective, a good way to prioritize is to have Safety or Enterprise Risk come first! Enterprise risk which encompasses Safety, Environmental, Compliance, etc. ensures that the company is doing what is correct long term, protecting its most important assets: Associates and Reputation. Right behind the Enterprise risk we should focus on the customer. To take care of the customer you must take care of the quality of the work we provide them and the delivery of this work so it is provided when they need it and we keep our promised dates. Because of this, behind Enterprise Risk (E) we usually place “Quality” (Q) and “Delivery” (D) in that order. Following Enterprise risk, Quality, and Delivery comes “Cost” (C). Cost has everything to do with how we manage resources to get a result. If we’re wasteful we leave profit on the table. If we improve this over time, me make more money. Anything related to making more money or being more productive can be grouped inside the “Cost” (C) category. The final category you should measure is innovation or change. “Innovation” (i) is the measure of your team to enact change. Change coming from the team’s ideas, Kaizen work, or key projects. If we use the first initial for each of the aspects we have EQDCi which is what I call these type of KPI boards.
The beauty of these KPI boards is that they are generic enough to work in many different settings. I’ve used them to drive performance everywhere: Transactional office areas, Manufacturing areas, Logistics operations, and so on. I’ve even used them virtually with remote Sales teams! The reason they work in a variety of settings is that the actual metrics that get tracked can be tailored to the team at hand. To illustrate, for the Enterprise risk (E) category I can measure “Near Misses” in a manufacturing setting, or “SOX audit score” for an Accounts Payable team. In the Quality (Q) category I can measure “Shipment errors” for a logistics shipping team as well as “Surface Rework%” for a eyewear manufacturing team as well as “First Call resolution” for a customer service team. The team can select the metrics they will track to measure their performance and see whether they are winning or not.
There is a good process for selecting the right metrics. We will go over that in a future post. For now, you can start thinking of where you could start with visual management and picture yourself and your team engaging in daily accountability sessions that will move performance to the next level.