News | Feb. 29, 2016

Measure for Measure

By Beth Reece

Employees won’t have to guess how much faster or better their work should be as the agency strives to improve operations and performance through enterprise process management in the coming years. They’ll know exactly what to do and change, because they’ll have specific metrics to track and improve their performance.

“Each buyer, each person on the floor, each supply planner will have their own personal metric they’re measured by, and they’ll know how what they do contributes to the overarching metric of the entire process from beginning to end,” said Angie Evans, chief of DLA Strategic Plans and Policy’s Enterprise Process Integration Division.

Using metrics to evaluate processes is critical for organizations that want to improve how they do business, said Tony Merritt, director of performance optimization for Optimize Consulting, a team of experts helping DLA improve its processes and customer support.

“The data we get as a result of using metrics reveals actionable information that can drive behavior and change. It shows us exactly where we stand on quality, speed and cost,” he said.

But just deciding to measure processes isn’t enough, Michael Hammer and Lisa Hershman write in “Faster, Cheaper, Better: The 9 Levers for Transforming How Work Gets Done,” which outlines the process reengineering concepts that DLA is adopting. Choosing the right metrics is key.

“Most companies get metrics all wrong. They allow each department to determine what it wants to measure. And because you get what you measure, each department gets a different and often uncoordinated result,” Hammer and Hershman write.

DLA already has online data sources that depict real-time information about everything from the status of orders to stock levels and locations, but that data doesn’t give a detailed picture of how a process is completed from beginning to end, Evans said.

“For example, we don’t know how much of the total sales-order processing time is value-added time and how much is wasted time,” she said. “DLA does not proactively manage handoffs between functional areas, such as customer-facing personnel to supplier-facing personnel. As a result, the processes are fragmented.”

Creating a formula for measuring the many steps in DLA’s processes begins with the question, “What matters to the customer?” Merritt added.

“The military services expect DLA to have a positive impact on materiel readiness. So how can we do that sooner rather than later, in the form that is needed and at a cost that provides value to the customer without spending more money than we bring in?” he asked.

Officials will begin measuring how well the agency accomplishes that by using existing data to establish baseline goals for time, cost and performance. Common goals will then be created to drive integration and cross-functional innovation. The initial focus will be on four core DLA processes: order to cash, plan to stock, procure to pay and acquire to retire.

Variables being assessed will range from response time and whether items are on-hand for shipping to whether the correct items are shipped and correct documentation is included. The word “failure” will not be used to define areas that need improvement, said Heather Vickers, a senior continuous process improvement analyst for DLA Strategic Plans and Policy.

“Employees should view these areas as an opportunity, a place from which goodness can come. If we set a metric that we can always achieve, we won’t get better,” she said.

When data reveals weak spots, the agency will reach out to commercial industry and other Department of Defense organizations to learn what makes their operations successful.

“We’ll reach out to organizations that are logistics managers like us, such as Amazon and FedEx, those with multiple product lines, multiple distribution channels and multiple vendors. By identifying their best business practices in particular areas of operations, we can compare ourselves and learn from them,” Merritt said.

DLA will also turn to other defense organizations with a common mission, such as the Air Force Materiel Command.

“AFMC, for instance, has won several awards for innovation and improvement. What they do is only a portion of what goes on inside DLA, but we can find ways to improve by benchmarking with these organizations,” he added.

After benchmarking, employees will use tools such as continuous process improvement to identify root causes for why a particular level of performance isn’t being achieved. Next, they’ll chart steps to the desired end state.

The metrics DLA uses could change as business processes change, when the agency takes on new, unique missions and as new ideas for improvement emerge, Evans said. And although the ultimate goal is greater customer satisfaction, employees will also reap benefits.

“Investing in something like this makes their jobs easier. As employees become familiar with metrics and all the functional areas involved, they recognize how their work impacts others and how we’re all dependent on one another to get things right,” she said. “That will eliminate cases where something like a purchase request needs to be reworked — something that probably leads to some of the frustration folks are feeling today.”

Metrics can also be used to cite specific achievements in employees’ performance appraisals and serve as justifications for monetary or time-off awards.

“The way we work together as a team to support our customers makes all the difference in how happy our customers are with the support they get from us. By using metrics and measuring ourselves by process rather than functional areas, we can reach a whole new level of success,” Evans added.