You need more than data to win… You need a strategy!
In the context of business, organizations are data rich. Unfortunately, in many cases, that data does not translate into actionable measures instead it is collected and filed away, only to reappear for an audit or when a customer asks some detailed questions. Often, data is not properly analyzed or used to drive actions that improve the performance of our organizations. In some cases, the collection of the data becomes the aim and key measure. This is the “activity fallacy.”
Activity Fallacy
In some cases, the collection of the data becomes the aim and key measure. This is the “activity fallacy.”
When the focus becomes only the numbers, organizations can confuse what’s being measured with the metric being used. The end result is that we collect useless data and remain unable to improve the business.
There are several keys to ensure success when deciding what data should be collected and how that data will be used to drive improvements.
Connect Strategy to Data Collection (Identify the Need)
What is the need to be addressed or fixed? It seems like a very basic question, and it is. Are you working to close the gap between plan and actual production results? At first, you may not know if the issue is downtime, material flow, or quality. Ask the right questions and put the correct metrics in place to help understand the situation clearly. And then take action. Collection of data without intent to act on that data is a waste of resources and frustration for your team.
Insure Wide-Spread Adoption (Have a Plan)
What is the plan for collecting and analyzing the data? Having a wealth of data is beneficial when you have a plan to collect, review, and act on the data. How many times have you received a daily report with data from production only to ask, “Now what?” Who will take action? What resources are needed? What resources are available? What’s the next step?
Downtime minutes and causes, quality fallout, and equipment failure data are great to collect, but if there is no process to respond, the data becomes mute. Have a process for circulating, reviewing, and acting on the data with the intention of driving results. We suggest a set weekly meeting where your teams basic problem-solving documents are reviewed. Use of a standard 8-D, 7-Step, or 5 Why problem-solving document can be used.
Choose the Right Tools (Select the Tools)
What process and tools are needed to collect and report? There are many products on the market when it comes to data collection and reporting. From basic Excel files and dashboards to large software suites that are developed to collect, store, and report, the options cover the full spectrum. Don’t jump ahead too quickly to the tool. The wrong tool applied quickly doesn’t get you and your team where they want to go.
Tools Support the Strategy
Tool selection is important. The wrong tool applied quickly doesn’t get your team to the final destination!
At Seraph, we developed software to help clients asses their manufacturing operations. We prioritized building a stand-alone tool that could be deployed without complex IT hardware or software integrations to allow for an intuitive and highly customizable setup, by the people who will use the data. Cloud-based data collection and reporting solution supports teams to take action and drive improvements. Our teams have used this software for several different applications, including production tracking, service parts packaging, and quality auditing. With the right tool you have the freedom to collect data and see results on any device, and even remotely.
Make Sure Results are Beneficial (Check and Validate)
What results are expected? Your team will not embrace wide-spread data collection efforts without seeing the benefit for the organization, or for them. Don’t make the assumption that when your teams collect mounds of data that they will automatically recognize the impacts of what they are doing. Meaningful reporting will show data-driven achievements and improvements. It is important to demonstrate on every level of your organization how data collection and the resulting actions are improving their jobs and the company’s performance. For example, have defect rates been improved? What about production performance? Has OEE improved? Has unplanned downtime been reduced?
Having a strategy, a plan, and the right tools are important to success. But realize that your plan will likely require real-time adjustment as you learn more. This doesn’t mean you abandon the basic strategy, but rather that you may need to adjust course as you move toward the final destination. Like traveling cross-country, unforeseen obstacles will certainly show up. It doesn’t mean you cancel the trip and turn around.
Summary
Step 1: Identify the need.
What is to be addressed? What gap is to be closed?
Step 2: Develop your plan.
How will the information be collected? How will the information be acted upon?
Step 3: Select the tools.
Does the tool support the data collection process? Does the tool support the problem-solving process?
Step 4: Validate your process.
Data collection is not the goal. Are you getting the results (see Step 1) you want?
Author: Jay Butler
About Seraph:
Seraph’s team of operational managers and senior consultants intercede on our client’s’ behalf to fix a crisis that is putting the business at immediate risk, turnaround a situation that is damaging the bottom line or restructuring to improve the balance sheet. Seraph has successfully delivered projects in the following regions: The Americas, Europe, China, and India. Seraph’s Industry Expertise Includes Aerospace, Automotive, Energy Infrastructure, Healthcare, and Medical Devices. Through our other operating companies, we are continually looking for distressed situations where we can put our expertise and capital to work to create value.
As the COVID-19 virus worked its way around the globe we’ve all learned about R0 values, global ventilator capacity, face masks, sneeze velocity and a myriad of other obscure facts.
The real lesson from the current situation is not our enhanced knowledge of epidemiology or virology, but rather in the vivid demonstration how disconnects between the time required to synthesize information vs the speed of global communication can interact with market perceptions to produce dramatic and abrupt shifts in behavior.
Organizational Behavior – Perception vs. Reality
The immediate driver of decisions made by consumers, businesses, governments, etc. is perception. Over the course of time perception may be bolstered or eroded by the underlying reality. If the perception is supported by reality, the behavior can be expected to solidify into a long-term trend. Conversely, unsupported perceptions are likely to be shorter-term fads. Take for example a product people purchase for its perceived reliability. If warranty and return information do not support the assumed reliability and consumers become aware, perception will eventually evolve, and this driver will cease to influence the purchase decision. Understanding perception and possible gaps from reality is necessary to stay ahead of evolving trends.
The Evolution of Information
I had an influential boss who would often say “Facts are stubborn.” It was an admonishment to take time, see the reality for yourself, collect data and use it to drive your decision making. At Seraph we have refined this to:
“Numbers → Data → Information”
- A number is just a symbolic representation of something. It has no intrinsic relevance until validated to represent something real.
- A validated number becomes data. A string of data is also intrinsically irrelevant until put into appropriate context creating information.
- Information is what we need to guide our decision making. The process of vetting and analysis required to derive information takes time.
Math ≠ Information
Using unvalidated numbers, or even arranging data in an irrelevant way inside an impressive looking jumble of symbols and jargon, does not sanctify or imbue credibility to the resulting answer. If you see or hear the popular saying “It’s just math”, look and listen very closely. Rarely, other than academic exams, does the “math” result in an absolute answer. Instead, for problems of real-world complexity, math usually presents a range of outcome probabilities, built on a construct of assumptions both known and estimated. Understanding probabilities and assumptions is critical to wrenching information from math.
Decision Making in an Imperfect World
All decisions are framed by consequences and time; what are the possible consequences of the decision, and when are those consequences expected to manifest. The time available to make the decision vs. the time it takes for information to evolve is rarely coincident. When faced with a consequence of dire or even existential magnitude, timeliness of the decision is paramount. The most difficult situation a leader encounters involves, dire consequences, a ticking clock, bereft of information. To minimize the need to make decisions lacking or absent information, speed in deriving information is essential.
Communication Gone Wild
The world has built an incredible, interlinked communication system to disseminate numbers, data and information with near-instantaneous speed. Time sensitivity in publishing content often out-strips the time required for information to develop. In addition, delivery of information is not necessarily the motivator of media sites. The economic motivation of all news aggregators, social media sites, websites in general and the resulting relevance in driving perception, is the same: The click. The click generates revenue for the platform and determines relevance in market influence. The extent which these sources deliver information is correlated to the consumers understanding of what information is, and their desire to acquire. If consumers don’t know what information is, and their “clicking” is not driven by a desire to acquire information, any information conveyed by these sources is coincidental in the aggregate. This hyper-charged network, not primarily motivated to deliver information, can drive large scale, consensus change in perception which may diverge radically from the underlying reality.
This is the primary lesson from the COVID situation. Faced with an emerging, possibly existential threat, and having only numbers, a smattering of data and very little information available, the world united in support of measures rarely tried individually and never collectively. They are often called government-imposed lockdowns as if a fiat, but polling suggests the governments are only implementing actions which enjoy widespread popular support. The evolving understanding of the virus will ultimately validate some perceptions and invalidate others which may lead to an equally rapid modification of future behaviors and actions when faced with similar circumstances. The ultimate “score” of rightness or wrongness is irrelevant. There will always be perceptions formed and decisions made in the absence of perfect information. The speed and scale of the behavior shifts recently demonstrated are the salient point.
Consumer behaviors, government regulations, trade tariffs can all be impacted by this chaotic interplay of perception and reality. In response, successful organizations will have resources and analytics designed to help foresee these shifts and will be structured in a way to allow rapid redeployment in the response to unforeseen eventualities.
Secure your own sources of information
Information is not readily available from today’s mass media sources. In addition, information does not self-organize; it requires energy and resources to produce. Whether a small in-house group or a relationship with a trusted outside partner, securing your own source of intellectual capital is critical to understanding complex markets and predicting future trends.
Track perception; measure reality
After identifying the perceptions driving the behavior in question, it’s important to continuously monitor them. Concurrent with tracking the perceptions, measure the underlying objective foundations on which they are based. When large gaps are identified it is even more critical to look for movements and momentum in the perception trends. The size of the gap will be proportional to the upcoming adjustment and the market awareness will determine the speed of the change.
Lower structural inertia; bias towards flexibility
No analysis is omniscient and unexpected events will always arise. Flexibility in all your assets, people, capital, and extended enterprise partners are key in adapting and surviving. Migrate to project-based organizational structures vs hierarchical. Implement and master the use of today’s collaborative tools so geography is not an impediment to deploying the right skills to the mission. Design products to minimize dedicated capital investment. Shorten supply chains. With people, equipment and your supply partners, agility is vital, and the inherent risk of rigidity needs to be appropriately weighted against short term cost optimization.
The dynamic nature of today’s market is not one-sided bearing only risk, but rather amplifies the eternal balance of greater risk creating the opportunity for commiserate rewards. It is much like a modern fighter jet. Both are inherently unstable, but with the right analysis predicting and providing real-time control feedback, they are capable of remarkable agility.
Jeff Jaisle jjaisle@seraph.com
Jeff is an Engagement Manager at Seraph and leads the Production.Net software division, which provides actionable data capture and visualization for manufacturing firms. He has over 25 years experience in the Automotive and Manufacturing space as the previous COO of Brose North American Operations, and VP of Operations for both Benteler Automotive and JAC Products.
About Seraph:
Seraph’s team of operational managers and senior consultants intercede on our client’s’ behalf to fix a crisis that is putting the business at immediate risk, turnaround a situation that is damaging the bottom line or restructuring to improve the balance sheet. Seraph has successfully delivered projects in the following regions: The Americas, Europe, China, and India. Seraph’s Industry Expertise Includes Aerospace, Automotive, Energy Infrastructure, Healthcare, and Medical Devices. Through our other operating companies, we are continually looking for distressed situations where we can put our expertise and capital to work to create value.
