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(Created page with "=Key Performance Metrics at Delft Solutions= Delft Solutions utilizes three fundamental metrics to measure and improve business performance: Effectiveness, Reliability, and Throughput. These metrics work in concert to provide a comprehensive view of operational excellence. ==Effectiveness== Effectiveness measures actions that should not have been done but were nevertheless performed. It is quantified through two key components: '''Inventory-Dollar-Days (IDD)''' * Calc...") |
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==Effectiveness== | ==Effectiveness== | ||
Effectiveness measures actions that should not have been done but were nevertheless performed. | Effectiveness measures actions that should not have been done but were nevertheless performed. That can be a little hard to grasp because "should not have been done" usually means "should not have been done YET". Essentially, it's work we could have done later but didn't. | ||
Effectiveness doesn't measure overpolishing (work that is being done too well, compared to what we or the customers need), but WIP: work in progress. Work that has been completed; is ready to be delivered to the customer, but it hasn't been delivered yet. | |||
'''Inventory-Dollar-Days (IDD)''' | '''Inventory-Dollar-Days (IDD)''' | ||
Effectiveness is calculated in Inventory Dollar-Days. | |||
* Calculated as: Dollar value of inventory × Number of days held | * Calculated as: Dollar value of inventory × Number of days held | ||
* Example: If $100,000 worth of products sits in warehouse for 30 days, this creates 3,000,000 inventory-dollar-days | * Example: If $100,000 worth of products sits in warehouse for 30 days, this creates 3,000,000 inventory-dollar-days | ||
* Lower IDD indicates higher effectiveness | * Lower IDD indicates higher effectiveness. The ultimate goal would be 0. | ||
===Quality Impact=== | ===Quality Impact=== | ||
Quality is inherently integrated into effectiveness measurements: | We don't measure quality separately from Effectiveness. Quality is inherently integrated into effectiveness measurements: | ||
* Sales are only recognized after customer acceptance | * Sales are only recognized after customer acceptance. | ||
* Inventory reductions are only counted once items | * Inventory reductions are only counted once items are deployed to production. | ||
==Reliability== | ==Reliability== | ||