Metrics and key performance indicators (KPIs) are an essential part of managing and tracking the financial and operational performance of any job shop. Dashboards are a visual presentation summary of these key metrics so you know how you’re doing at a glance.
A dashboard, if done correctly, can be a useful tool for compiling, reporting, and integrating the wide array of information necessary to effectively manage your job shop. That’s why our Velocity Pricing System and Velocity Scheduling System customers are using dashboards! Having the correct measure for machine shop scheduling is really important.
Benefits of Operational & Financial KPI Dashboards
Among the many benefits of a dashboard are:
- Line of Sight
A dashboard can allow you to view the performance of the entire business, from sales to operations to collections. This view of the business as a whole allows an owner to quickly see what is happening in the business as well as what needs additional monitoring or management attention.
- Synthesis of Information
One of the great benefits of technology and ERP systems today is that we have access to a wealth of data. However, the ERP providers have not done the best job of converting that data into information, which can be acted upon. It often takes pulling several different reports, perhaps even from different systems to create an integrated picture of a shop. With a dashboard, an owner can have at their fingertips, information which can improve the rate which problems are identified and resolved. Perhaps your shop has a repair division and a new manufacturing division which use different systems. A dashboard could enable you to monitor the performance of each division, in one place.
- Ease of Use
Dashboards are great in that they are easy to use. We know from 5S that organizing items in your shop such that they are easy to find, use, and put away is important. The same is true in the digital world. Dashboards make information easy to use with visual graphs, charts, and indicators. Many dashboards now also allow you to “drill down” to the source data simply by double-clicking a chart. Instead of having a ton of data locked behind unusable reports, dashboards leverage an ERP’s data to provide insights that have previously been hidden.
As Theory of Constraints (TOC) practitioners, we value having FOCUS. It is absolutely critical. Instead of pouring over the seemingly endless list of reports that come with an ERP, a dashboard can be tailored to your exact needs. That’s important, because as the owner of job shop you know that at any given time there’s a mile-long list of improvement projects, customer requests (demands), employee requests, and on and on. Without focus, there’s no way to prioritize and effectively deal with the demands of being a job shop owner.
BEST Job Shop Dashboard
The benefits of a good dashboard are undeniable. The trick is in selecting the right KPIs and creating a the best possible dashboard. You want enough metrics in your dashboard to keep the pulse of what’s going on, but not too many. Too many metrics can be time consuming to enter, but even if you could automate them — they can be overwhelming. So, we’re putting together an informational series that explains the best metrics for job shops and machine shops so you can create a great dashboard for your shop and your situation.
In our next email we’ll share our thoughts on how a job shop could go about building an effective dashboard. We’ll examine the KPIs, metrics and areas of a job shop that should be on an effective dashboard. And of course, we’ll tailor these to job shops specific circumstances, such as doing both new manufacture and repair work.
To help us prepare for next week’s installment, we invite you to respond to the questions below related to dashboards. We’ll keep all communications we receive confidential and we’ll only discuss general aspects of the feedback we receive. Just respond to the email you received, leave a comment below (not confidential), or email us.
- What makes a dashboard effective?
- What are the best metrics for a dashboard?
- Is there a limit to the number of metrics that should be on a dashboard?
- Please send us a screenshot of your dashboard (as we said, we’ll keep your response confidential)?
Share your thoughts and be on the look out for the next Job Shop Dashboard update.
Wishing you success from the Science of Business TEAM:
- “Dr Lisa” Lang, Chief TOC Expert, Job Shop Whisperer, TOCICO Certified
- Brad Stillahn, Pricing Expert, CIPM, CIRM, TOCICO Certified, Certified Exit Planner
- Beau Ganas, Throughput Accounting Guru, CPA, CMA, CFE, CIA, CISA and TOCICO Certified
Blah, blah, blah – who cares? The key is that our clients get results! Ask us about paying based on YOUR results!
P.S. If you’re ready to go beyond looking at data, and are ready to IMPROVE, check out Velocity Scheduling System to improve lead-times, improve due date performance and reduce chaos!
P.S.S. If you ready to understand how you really make money and take your profits to the next level, check out our Velocity Pricing System (it’s more than just pricing)! It’s the ultimate jobs shop costing system – understand how, where, why you make money (or not). Understand your capacity and resources so that you can quote fast and ensure profitability.
P.S.S.S. This is Part 1 of a 5 Part series. Read the entire KPIs and Dashboards series.
Copyright Science of Business, Inc. All rights reserved worldwide.