Popular CEO Metrics and Dimensional Models
Company Name: Asian
Paints Limited, India
Introduction:
Asian Paints Limited is a chemical manufacturing
and distributing company headquartered in Mumbai, India. It’s an established
company with a huge market cap focused on the areas of decorative and industrial
paints, varnishes, primers and allied products. Whereas it carries its
operations in India under this name, international operations are carried under
its subsidiary Berger International Limited that operates in South-East Asia,
gulf and some other regions. For its operations, the company relies on its
manufacturing units in India and the vast network of dealer channels to which
it supplies both directly and indirectly via authorized distributors. Its
establishment dates back to 1942. The company trades on the Bombay Stock Exchange
and has shown good financial figures over the decade. It has been showing
steady growth in the stock market over the years. The company is led by Mr. KBS
Anand who is the CEO and MD of the company. For the analysis of the performance
of the company by higher management, figures like those on balance/income
sheets might seem important, yet these are just the scorecard of the
operational metrics that help derive these figures.
From the perspective of monitoring
performance, following metrics would seem vital for analysis by the CEO of the
company:
1.
On-time Delivery
This
metric focuses on the customer attentiveness aspect of the company operations.
It is targeted towards monitoring of the system that ensures delivery of the
order received on a timely basis. Irregular delivery times have a tremendous
potential to hamper the performance of the company as this would attract higher
rates of customer attrition, which brings down the performance.
2.
Manufacturing Cycle times
This
metric measures the time it takes for manufacturing unit to turn the raw
material into finished goods since the time order is released to it. This would
help in determining the strategies to offset the over stocking or lag in
delivery times.
3.
Yield
This
metric measures the percentage of products manufactured correctly the first
time as desired in the contract. Any decisions regarding quality of production,
machinery revision could be based on these.
4.
Customer returns
This
metric helps in analyzing the product satisfaction amongst the customers. If
this is high, it is highly likely the customer may move to some other company
which is never desirable for the company.
5.
Throughput
Measurement
of the quantity of production per manufacturing unit or division. This helps in
decisions about setting up of more units to fulfill the demand of the consumers.
6.
Utilization of capacity
This
is the measurement of percentage of full capacity of the manufacturing units
that is actually realized. It helps understand the shortcomings, if any in the
production that would further help in the rectification of production problems.
7.
Inventory/ Turns
This
is the measurement of amount of inventory required to garner a given cost of
goods sold by the company. Higher management is always interested in
maintaining an equilibrium between inventories stored and required so that cash
is not over struck.
8.
Safety incidents
This
is the measurement of accidental cases reported in the company. It is directed
towards employee satisfaction. Had there been more incidents, the management
needs to decide upon investment in safety mechanisms.
9.
Manufacturing cost/ Revenue %
This
is a measurement of the total cost of products to the company as a percentage
of revenue generated. This is highly visible metric towards higher profit
margins and efforts need to be put in to ensure this ratio to be at minimum
while maintaining the quality.
10. Net Profit
The
management needs to be aware of the net profit it has made to make conclusions
for its performance over the previous fiscal periods in order to report to
stakeholders of the company. It would also need to backtrack the flaws in case
there is a decreasing slope observed.
11. Productivity per Employee
Employee
performance is measured by the revenues generated by the company’s operations
divided by its strength of employees devoted towards a unit. It helps in
formulation of employee policies.
It is
worth noticing that this might not be a comprehensive list of all the metrics
desired by the manufacturing sector CEO’s or this company in general. However,
it lays down a big picture of what CEO’s need to consider while analyzing their
company’s performance. These indicators then serve as trigger points in
formulation of strategies and policies towards setting up of targets for the
following fiscal periods and laying down means of achieving them.
Dimensional Model Analysis:
For
the DW/BI capabilities into the analysis of company performance, each type of
dimensional model (transactional, periodic snapshot and accumulating) would be
used by various supply chain points. Retailers would lay interest on
transactional and periodic snapshots while higher management would be more
interested in combination of higher grain based models with roll-up
capabilities.
The
CEO of such a company would be interested in periodic snapshots with
granularity of date dimension as monthly, quarterly and yearly for each of the
modules of the supply chain individually. They would be able to identify
bottlenecks such as lower production in the manufacturing sector or disturbance
of equilibrium in inventory management from such a dimensional model. However,
to gain knowledge of the complete picture of the company as a whole, an
accumulating snapshot would also be required that explains the complete story
behind the whole pipeline from purchase of raw material to delivery of the
finished products to the customer. This would help emphasize upon the incentive
strategies for employees and stakeholders.
Rolled-up
visual trends from periodic snapshots would complement the story from the
accumulating snapshot that would assist in closing in on the areas that require
attention.
Popular Dimensions that would be necessarily needed are
as follows:
Date
Customer
Warehouse
Manufacturing
facility
Product
Logistics
…and
others as per the specific requirements of analysis.
References:
