Ignoring measurement is holding back most VA program’s success
Value analysis programs’ organizational structures range from very informal to highly organized, which can and will affect their performance. Yet, one success factor that is missing from even the most mature value analysis programs, we find, is measurement.
It doesn’t seem to enter into value analysis team leaders’ mindset that for a VA team to reach its full potential, its activities need to be measured, managed and controlled. As author Douglas W. Hubbard suggests, measurement shouldn’t be taken lightly, “If a measurement matters at all, it is because it must have some conceivable effect on decision and behavior. If we can’t identify a decision that could be affected by a propose measurement and how it could change those decisions, then the measurement simply has no value.”
Following this line of thinking, in our value analysis training/coaching/facilitation practice we have found the following measurements to be central to making decisions, changing behavior and creating value for any and all value analysis programs:
Year-to-Date Savings:
It’s not unusual for us to ask a value analysis team leader for his or her year-to-day VA savings report, only to be told they don’t have one. Or, if one is available, it is so cryptic that no one can decipher what really has been saved. So construct this report so anyone can understand your savings successes.
Year-to-Date Savings Rejections:
Rarely do we see rejected savings (i.e. department or managers don’t buy into a savings opportunity) reported on a savings report. This is important since you can revisit these savings opportunities at a later date or share this information with your value analysis steering committee for re-evaluation.
Savings-per-Project Manager:
This will give you an indication of who your superstars are and who needs more coaching or meatier projects. This is a critical metric to make sure all of your project managers are pulling their weight and understand your value analysis process.
Project Timelines/Completion:
All of your VA projects should have a start and end date. No project should be left open ended. A general rule of thumb is that 93 percent of your projects should have a timeline of no more than 90 days. If a VA project requires more than 90 days, then it should be reviewed and approved by your value analysis steering committee for an additional 90 days.
Team Leader/Members Attendance:
This is a critical metric since it has been our observation that a higher attendance rate for your VA meetings has a direct correlation to your VA team’s performance. A good benchmark for this metric is 80 percent attendance at all meetings. If your VA team falls below this marker, I can assure you that your performance is lagging too.
These are the top five measurements that we advise our clients’ value analysis teams to develop, measure, monitor and control. We have found that it is best to have an electronic dashboard to collect and then display all of your VA reports, measurements, and project activities for easy access and review. If you try to use a paper-based system or even spreadsheets to collect and report on this information, this data will become unmanageable and eventually unusable. So if you think your value analysis program needs a shot in the arm to reach its peak performance, measuring your value analysis team’s performance is the first place you should start to reinvent what you have been doing for years.
