A Simple Performance Measurement Framework (1)

7/28/2019 A Simple Performance Measurement Framework (1)

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A simple performance measurement frameworkA good performance measurement framework will focus on the customer and measurethe right things.Performance measures must be: Meaningful, unambiguous and widely understood Owned and managed by the teams within the organization Based on a high level of data integrity Such that data collection is embedded within the normal procedures Able to drive improvement Linked to critical goals and key drivers of the organizationThere are four key steps in a performance measurement framework - the strategicobjectives of the organization are converted into desired standards of performance,metrics are developed to compare the desired performance with the actual achievedstandards, gaps are identified, and improvement actions initiated.

These steps are continuously implemented and reviewed:

Initially, focus on a few key goals that are critical to the success of theOrganization or business, and ensure they are

Step 1 Establish key Goals

Step 2 Establish Matrics

Step 3 Understand Performance

Step 4 Initiate Improvement


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SMART

SpecificMeasurable

AchievableRelevantTimely

Excellence

QualityOnce the goals have been defined, the next step in developing a performancemeasurement framework is to define the outcom e metr ics- what has to be measuredto determine if these goals are being achieved. For each outcome metric determine,What measurablefactors influence this outcome?Once the list is complete, selectthose with greatest impact,and be put in place first.An organization needs to evolve its own set of metrics, using any existing metrics as astarting point in understanding current performance. To ensure they trigger theimprovement cycle, they should be in threemain areas:Effectiveness = Actual output x 100%

Expected outputThis is about the process output, and doing what you said you would do. Theeffectiveness metrics should reflect whether the desired results are being achieved, theright things being accomplished. Metrics could include quality, e.g., grade of product orlevel of service, quantity, e.g., tonnes, timeliness, e.g., speed of response, andcost/price, e.g., unit cost.Efficiency = Resource actually used x 100%

Resources planned to be usedThis is about the process input, e.g., labour , staff, equipment, materials, and measuresthe performance of the process system management. It is possible to use resourcesefficiently, but ineffectively.Productivity = Outputs which can be quoted as:

InputsExpected productivity = Expected output or

Resources expected to be consumedActual productivity = Actual output

Resources actually consumedSimple ratios, e.g., tonnes per person-hour, computer output per operator day, areused.Next, design a data collection/reporting process using the following steps: Set up a system forcollecting and reporting data Write clear definitions Agree method for establishing current performance (if not already determined) List resources required to support the design Agree data formats and classifications for aggregation and consolidation


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Identify possible sources of benchmark data Set reporting calendar Establish roles and responsibilities Detail training requirements Validate with process stakeholders

The gap between current and desired performance now has to be measured. Some ofthe metrics already exist and their current performance data must be collected, as wellas data for new metrics.Once all the data has been collected to identify the current performance, the target levelof performance for the medium- and long-term must be decided. These performancelevels must be achievable, and should be broken down into targets for discrete short-term intervals, e.g, the next three quarters.To implement the performance measurement framework, a plan with timescales anddesignated responsibilities is needed. Once the plan has been implemented and datacollected, new baselines can be set, comparisons made and new standards/targets set.The metrics, targets and improvement activities must be cascaded down through the

organisation, involving people and teamwork in the development of new metrics, datacollection and improvement activities.Improvement can be initiated by examining the gaps between current and targetperformance of the driver metrics at each level. A minimum, achievable set of actions isdetermined, with plans, assigned responsibilities and owners.The critical elements of a good performance measurement activity are very similar tothose required for a total quality improvement activity: Leadership and commitment Good planning and a sound implementation strategy Appropriate employee involvement Simple measurement and evaluation Control and improvement

Macdonald use following strategies for Quality assurance:

The Homely Touch of the Highest Quality Standards at McDonaldsAt McDonalds its always like coming home. We make sure that the warmth of our homely

touch reaches your highest expectations. Be it food, service or the ambiance, we keep elevating

our quality standards to new levels. McDonalds has implemented rigorous food safety

standards called from farm to restaurants. Here food is not just meant for thought. Food


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means quality by all means. That is why McDonalds is served to you and your loved ones with

all our heart and soul

Meat With 100% Purity100% purity is the reason why all our beef sandwiches taste so delicious. They are made from

100% halal beef cuts with no additives or preservatives. Chicken that we serve is carefully

deboned breast meat only, with seasoned batter and a choice of sauce portions, while our SpicyMcCrispy Chicken Deluxe uses only muscle cuts. All relevant authorities monitor our high

quality standards of 100% halal chicken

High Quality Baked BunsWe source our buns from suppliers who use only high quality wheat. All the buns are subject to

strict quality and safety controls all through the production process

Crunchy Farm-fresh vegetablesWe select the best of the best vegetables that are continually monitored for freshness, high

nutrients and safety, to maintain top quality standards. We use regional/local suppliers to ensure

that the freshness and high quality are delivered to you in all our products

No CompromiseAt McDonalds we give high importance to the smallest of the detail, from meat to spices, and

everything is standardized. That is because we follow our global set quality standards with no

compromise, right from the farm to the restaurant till the time it is served to you

High Energy Wholesome dairiesTo maintain the high quality standards of the world famous McDonalds cheese, shakes,

Mcflurry and Sundaes, we ensure that the fresh milk comes from the approved regional and

local suppliers. Quality control procedures are followed throughout the supply chain from

freshness of the milk, all the way to handling, processing and transportation to ensure the

quality of the end product.

Fries-Naturally CrispOur fries are crispy and far from the ordinary. The secret lies in the harvesting of high quality

potatoes that come from trusted suppliers. The potatoes are then cooked using only 100%

vegetable oil with no fats or flavors and only some salt is added after cooking

All Safen SoundHACCP (Hazard Analysis & Critical Control Point) is our applied system to keep food safety

absolute from point zero till the point it is served to our customers. This ensures the quality from

our regional suppliers production lines down to the kitchens of our restaurants.


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Strategies for

Quality

Assurance

The Homely Touch

of the Highest

Quality Standards

at McDonalds

Meat With 100% Purity

High Quality Baked

BunsCrunchy Farm-fresh

vegetables

No Compromise

Fries-Naturally

Crisp

High Energy

Wholesome dairies

All Safen Sound

A Simple Performance Measurement Framework (1)

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