Dear IT Director,
My company is growing, and we got behind on orders. We have been doing a lot of work to catch up, but it is hard to tell if we are making any headway. My boss asked me if I have any ideas.
Confused in Cincinnati
Increasing late orders is a tough situation to be in, especially if revenue is growing. We have to deal with more orders than we have ever seen, and we need to catch up on late orders. If you focus on one of those, the other gets worse. Customers get cranky. When you hear about businesses not surviving their own success, this may be part of the cause.
I suggest the concept of Late-Days. This provides a single, trackable number that quantifies the size and age of the late pile. For each order, add up the number of days late. If you have variety in the size of your orders, you can tweak this by multiplying by the dollars or quantity of the order. As a bonus, we can use this concept for other late things besides sales, hint – how is your IT to-do list?
Before we get to an example, why is Late-Days useful? In my experience, not all overdue is created equally. Since there is never one silver bullet to fix overdue, we need to approach each situation differently. Ten orders that are weeks late differs from fifty orders that are days late. The solutions you try will be different in each case. Late-Days quantifies that for us in a way that helps us understand if we are making a difference.
While the number of late orders is the primary metric, it doesn’t really tell much of a story about what those lines are like. Days-Late gives a little more information.
First, the math. The simplest way is to add up the days late for each late order.
As I mentioned before, you can add a dollar or quantity multiplier if those vary in your situation. I’ll also remind you that no single metric holds all the answers. Late-Days is a simple metric to add to your mix of metrics.
How can we use Late-Days to monitor our progress?
Let’s look at the scenario I mentioned above: ten orders that are weeks overdue and fifty orders that are days overdue. We might have a Late-Days of 357 for the first and 128 for the second. By themselves, these numbers are not helpful. But when you track this metric over time, you will see changes. And that tells you if you are winning or losing.
Track Late-Days every day and work to make the number lower. The goal, of course, is zero.
The hard part is figuring out how to ship all those late orders, AND to ship all new orders on time. Late-Days provides a useful number to know if you are making progress.
Good Luck Confused,
The IT Director