Asset Intelligence and Management

Asset Intelligence and Management

EZOfficeInventory Blogs Keep Reports Short

Keep Reports Short: Focus on these KPIs

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I once worked with a graphic designer who adamantly believed – and regularly reminded others – that “If everything’s bold, nothing’s bold.” It’s true. Bold, italics, underlining … special formatting is designed to draw attention to, well, special information. Apply the same principle to your reporting.

When it comes to reports, remember the age-old acronym “KISS”:

Keep

Inventory

Statistics

Simple

Okay, I may have taken some liberties there, but you get the point. Clear and concise is best, for both the recipients’ sake and yours. Don’t get lost in the details. Your position may require you to know a large amount of data, but that doesn’t mean everyone else needs to know it. In fact, if everyone else knew all of the information you do, why would they need you? Instead, boil down what you know – and what they need to know – to the few things that truly make an impact on improving your business.

In addition to KISS, consider the following factors when creating your report:

  1. Audience – Who is going to see this report? Key Performance Indicators (KPIs) are only relevant to what the audience considers key.
  2. Objectives – What is your purpose in presenting this information? Instead of viewing your report as an obligation, think of it as an opportunity. Highlight not just what you think the recipient wants to know, but also what you think they need to know in order to improve the business.
  3. Strategy – How does what you’re presenting apply to the overall strategic goals of the organization? Yogi Berra once said, “You’ve got to be very careful if you don’t know where you are going, because you might not get there.” Keeping the endgame in mind helps you stay on course.

FINDING WHAT MATTERS

MIT’s Sloan Management Review and Google teamed up to create a cross-industry survey that asked senior executives to discuss the way they and their companies perceive and utilize KPIs. For the purposes of their study, the researchers defined key performance indicators as “the quantifiable measures an organization uses to determine how well it meets its declared operational and strategic goals.” The report, “Leading with Next-Generation Key Performance Indicators,” emphasizes the importance of clearly defined key performance indicators in company culture and strategy.

“To be effective, KPIs must truly be “key” performance indicators, not ordinary metrics or measures, that reflect and illuminate the strategic priorities of the enterprise. An organization’s strategy and culture ought to be easily discernible based on its KPI portfolio, and its KPIs should clearly communicate how it tracks value creation and delivers value for its stakeholders — customers, employees, and investors alike.”

FORWARD-THINKING

As mentioned earlier, you choose to think of reports as obligations or opportunities. Many people miss out on chances to affect change because they only view reports as measures of the past. In “Guide to Key Performance Indicators: Communicating the Measures that Matter”, PriceWaterhouseCooper states, “… a forward-looking orientation is essential for readers to assess the potential for strategies to succeed, and to give them a basis against which to assess future performance.”

To fully access and utilize the data collected, go beyond analyzing the past. Demonstrate how the information effects the present. Show the forward thinking you’ve done, and capitalize on your chance to affect decision-making by unveiling potential revealed through data analysis. Start with success stats; what’s working well. Then, draw attention to an opportunity or two for improvement – along with suggestions on how to make said improvements happen. Finally, end on a high note: a forecast for future success.

FIGURE IT OUT

Now that you’ve gathered the data that matters to the report recipient, it’s time to put it in a format that will most easily depict your intended message. It doesn’t get more “big picture” than data visualization. Don’t groan. Yes, charts and graphs are examples of data visualization. But there’s also so much more.

In “Data Visualization: How to Tell a Story with Data,” Forbes contributor Nicole Martin explains, “Data visualization is using data and statistics in creative ways to show patterns and draw conclusions about a hypothesis, or prove theories, that can help drive decisions in the organization.”

As the saying goes, a picture is worth a thousand words. It’s easy to get lost in number stats. Consider the Seurat painting A Sunday Afternoon on the Island of La Grande Jatte.

When observed from a distance, we see a lovely landscape covered with people enjoying the grassy shore. In reality, the painting is actually made up of millions of little points, or dots, of color that, up close, only made sense to the painter. Charts, graphs, and other visuals take all the minute information you hold and blend it into an image others can understand.

Charts and graphs are critical when you want to pare down explanations, illustrate trends, and make comparisons. Use pictures when you need to impress certain conditions, such as overcrowding or unused space. Images are powerful and very effective at stirring action and understanding. In fact, that Seurat comparison is an example of data visualization – millions of little points that create a bigger picture.

FIVE KEY PERFORMANCE INDICATORS

We’ve covered the value in Keeping Inventory Statistics Simple, framing a report to suit the situation, using reports as vehicles for personal and company growth opportunities, zeroing in on what really matters, and making a scene.

Next let’s look at five KPIs worth reporting, and effective ways to do so.

Asset Utilization

Understanding asset utilization allows companies to properly allocate and regulate resources. Assets are limited. The idea is to find the most efficient distribution of assets for the company. Look for items that are being over- and underused. Compare department usage. Is anyone monopolizing assets? Are there times of day when a particular item is in higher demand? Pie charts are particularly useful when comparing parts of a whole. Report outliers and provide suggestions on ways to improve utilization for company growth.

Inventory Turnover

Are there products gathering dust on your shelves? Is there something so popular that you can never have enough of in stock? Inventory turnover reports show popularity and buying/usage trends. Use those to forecast future supply and demand arcs. Review who is buying or using your products and where they live/work. Use Venn diagrams and pictographs to illustrate demographic trends in relation to your sales. Report on lucrative and untapped markets.

Equipment Reliability

A smooth, efficient production process requires reliable equipment. When something (or someone) gets out of sorts, it creates a bottleneck that affects related processes. That is not smooth, efficient production. Unfortunately, others don’t always understand the importance and trickle-down effect of each and every step in a given process. Use flow charts to show the downstream effects of defunct or defective equipment. Report successful processes, as well as those that could use some tuning, and offer insight that will keep your company on the front edge of prosperity.

Audits

You can only use your assets if you have access to them. Missing and/or misappropriated assets cause headaches for inventory managers and financial officers alike. Compare expected and actual inventory. Find explanations for any discrepancies. When confronted with unaccounted-for discrepancies, try to find trends in disappearances. Is it one specific product or brand? Is there a certain time of day or year that products seem to go missing? Bar charts help visualize time and volume trends. Report findings and provide possible solutions to minimize inventory and profit loss.

Vendor History

Are your vendors reliable? Are they timely? Could you do better? Line graphs are perfect for demonstrating history comparisons. Time-related data is easier to see when traced out. Lay multiple lines on a single graph to demonstrate consistencies or inconsistencies over time. Report outstanding partnerships and offer alternative suggestions to underperforming vendors.

REPORT EARLY, REPORT OFTEN

Updates and reports are often looked upon with dread by both presenter and presentee. Fairly or not, KPIs can be perceived as report cards.  And in some senses, they are in that they present an objective picture of progress at a given point in time.

If you can focus the KPI you’re presenting to only show the most relevant data, you’re off to a good start. The next step is to incorporate pulling and preparing your KPIs on a regular basis. Scheduled reporting built into your project management system helps reinforce the importance of KPIs as tools to monitor the health of the overall enterprise.

And finally, If you really want to improve and advance, ask for feedback on your report. What was useful? What KPIs were overlooked? Incorporate that feedback into your next report and don’t forget to seal it with a KISS.

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