Operations Payoff

Rick's Blog - your source for news and insights into Operations and Supply Chain Management.

The Essential Gauge

The dashboard of a small airplane has a number of gauges that provide a litany of information to the pilot. There’s one big dial right in the middle that’s extremely important: the artificial horizon. In the center is a round ball, the top half of which is white and the bottom half is black. It rotates and moves to show the pilot what the plane’s attitude is relative to the ground. Watching it, you know if you’re going up or down, or even whether you’re upside down. Obviously, this is an essential gauge.

The big dial on the dashboard for most organizations (regardless of type), is shipped-on-time. This might also be call DIFOT (delivered in full, on time) or perfect order. Perfect order includes specific reference to quality. Most practitioners consider all three of these measures to be equal. Ship good product, complete and on time.

Not only does this apply to products, but also to services. For instance, the accounting department could measure shipped-on-time related to the monthly financial statements. Are they accurate? Did you close the books in 5 days or whatever your commitment is, and deliver them to managers or your bank on time? For sales, did you enter all of the orders accurately and on-time?

Measuring shipped-on-time for your organization is a big gauge. It just might keep you from crashing into the ground.

© 2014 – Rick Pay – All Rights Reserved


Leave a Reply

Your email address will not be published. Required fields are marked *