Develop a listing of what you believe are the most important metrics for operations managers. (Hint: Be sure to consider the triple bottom line.) How does each metric support the overall financial performance of the organization? What data would be used to support this metric and how would you ensure that the data are of sufficient quality? How does data analytics support your metrics? Be sure to fully explain your rationale for selecting these metrics.
The most important metrics for operations managers considering triple bottom line are highlighted below. Also, how each metric supports overall financial performance, data used to support the metric and the role of data analytics is explained-
1. Profits from the plant/unit – This is the most important financial metric and the higher the profit is, the better the financial performance of the firm will be with respect to increased revenues and decreased costs.
The data that is required is revenue generated and costs incurred.
2. Overall throughput of the plant – Throughput of the plant determines the productivity of the plant which is linked to the amount of product manufactured, shipped and sold which is directly linked to revenue.
Throughput requires inventory and time data to calculate.
3. Return on Investment – ROI is the return in dollar amount of the investment on the plant and the higher ROI is, the better is the financial performance.
ROI requires investment amount and the profit generated to calculate.
4. Amount of greenhouse gases generated – This is the amount of greenhouse gases generated which impact the environment and is measured in CO2 , CO emissions. Higher the emissions, more will be the cost to reduce them and it negatively affects the financial performance.
This requires the data specific to the amount of various greenhouse gases generated.
5. Employee Retention Rate – This is the percentage of employees retained by the organization in a particular period. Higher the retention rate, lesser are the hiring costs and better will be the financial performance.
This requires the employee exit data over a period of time.
Data analytics helps in capturing and analyzing the data to understand the factors that impact the metrics thus providing a direction on the improvement of the metrics.