# Metrics

```Manufacturing Metrics
BALANCED SCORECARD
MESA EMPIRICAL STUDY
Metrics Matter
 You can’t improve what you can’t measure.
 You can’t measure what you can’t see.
- Dr. W. Edwards Deming
Metric
 A metric is a verifiable measure stated in either
quantitative or qualitative terms.


“97 percent inventory accuracy”
“According to our customer evaluations, we are providing
above-average service”
Metric
 A metric is a verifiable measure that
 captures performance in terms of how something is being done
relative to a standard,
 allows and encourages comparison,
Customer quality measures
 Customers typically relate quality to:

Feature based measures; “have” or “have not” - determined by
design

Performance measures - “range of values” - conformance to
design or ideal value
True vs. Substitute performance measures
 Customers - use “true” performance measures.
 example: a true measure of a car door may be “easy to close”.
 true performance measures typically vary by each individual
customer.
 Unfortunately, producers cannot measure performance as each
individual customer does.
 Producers - use “substitute” performance measures
 these measures are quantifiable (measurable units).
 Substitute measure for a car door: door closing effort (footpounds).
 Other example: light bulb
 true performance measure -- brightens the room
 substitute performance measure – wattage or lumens
Educating Consumers
 Sometimes, producers educate consumers on
their substitute performance measures.
 What are substitute performance measures for
the following customer desires:
 Good
Gas Mileage
 Powerful Computer
 What is the effect of educating consumers on
performance measures?
What is a “metric”?
 Another term for a substitute performance
measure is a metric.
 Metric
is a standard of measurement.
 In quality management, we use metrics to translate
customer needs into producer performance
measures.
 Internal quality metrics
 scrap and rework
 process capability (Cp or Cpk)
 first time through quality (FTTQ)
Identifying effective metrics
 Effective metrics satisfy the following
conditions:
 performance
is clearly defined in a measurable entity
(quantifiable).
 a capable system exists to measure the entity (e.g., a
gage).
 Effective metrics allow for actionable responses
if the performance is unacceptable.
 There
is little value in a metric which identifies
nonperformance if nothing can or will be done to
remedy it.
 Example: Is net sales a good metric to measure the
performance of a manufacturing department?
Use of quality metrics
 Quality metric data may be used to:
 spot trends in performance.
 compare alternatives.
 predict performance.
 However, organizations should consider the
costs and benefits of collecting information for
a particular quality metric.
 collecting
data will not necessarily result in higher
performance levels.
 higher quality companies often use fewer metrics
than their competitors.
Acceptable ranges
 In practice, identifying effective metrics is often
difficult.

Main reason: non-performance of a metric does not always lead
to customer dissatisfaction.
 Consider
the car door example again, if door closing
effort is the metric, will a customer be dissatisfied if the
actual effort is 50 foot-pounds versus 55 foot-pounds.
 Producers typically identify ranges of acceptable
performance for a metric.


(a) For services, ranges often referred to as break points.
(b) In manufacturing, these ranges are known as targets,
tolerances, or specifications.
Break points
 Break points are levels where improved performance
will likely change customer behavior.
 Example: waiting in line

Suppose the average customer will only wait for 5 minutes
 Wait
longer than 5 minutes -- customer is dissatisfied.
 1-5 minutes -- customer is satisfied.
 less than 1 minute -- customer is extremely satisfied
 Should a company try to reduce average wait time from
4 to 2 minutes.?
Targets, tolerances and specifications
 Target (nominal) - desired value of a
characteristic.
 A tolerance specifies an allowable deviation
from a target value where a characteristic is still
acceptable.
Lower specification
limit (LSL)
Upper specification
limit (USL)
TARGET
-1
+1
Balanced ScoreCard
A Balanced ScoreCard is both a Tool and a Process:
 The Tool: Your ScoreCard reports all key drivers of your
strategic success. It lets you know if performance in each
critical area is at the level you expect, and shows you
trends for each major business driver.
 The Process: For the Executive Team, the ScoreCard is the
centerpiece of your month-end review process. It is also
used with your extended management team, employees,
and Board to educate them on key performance issues.
BayMed (fictitious) Balanced ScoreCard
Financial
Market/Customers
138 Overall
138
Revenue
112 Gross
112
Margin
27 EBITDA
27
YTD In \$M
YTD In \$M
YTD In \$M
# 137.3
# 138
Act.
137.5
Tgt.>
### Free
4864
Cash Flow
YTD in \$K
# 5,000
# ###
Act.
4,864
Tgt.>
# 112.2
# 112
Act.
112.1
Tgt.>
25
Standard
25vs.
Actual Costs
In \$M
# 24.1
# 25.5
Act.
25
Tgt.<
# 27.0
Act.
# 27.4
27
Tgt.>
34Inventory
34
On Hand
In \$M
# 33.0
# 34.0
Act.
34
Tgt.<
QTD In \$M
# 41.5
# 42.4
Act.
42
Tgt.>
1 On-Time
1
Shipments
1
Act.
1
Tgt.>
In %
90.0%
88.1%
1
Raw
4 Materials
4
and OEM
Inventory Turns
4
Act.
4
Tgt.>
4.5
3.8
4
Rev.
0
Growth
0
New Customers
15
Partnerships
YOY In %
In %
15 (Grn & Yel)
# Viable
10.0%
10.4%
Tgt.
0
Act.
0
Tgt.>
10.0%
11.0%
0
31
New Product
31
Rev. Growth
In \$M
# 27.10
# 30.74
Act.
31
Tgt.>
0
Act.
0
Tgt.>
0
32Customer
32
Complaints
In #'s
# 20
# 32
Act.
32
Tgt.<
# 12
Act
#
15
15
4Customer
4
Satisfaction
5 Point Scale
4
4
Act.
Tgt.>
4.00
3.94
4
People & Culture
Operational Excellence
42
Sales Quota
42
Performance
Repeat
0
Bsns:
0
Rev. Growth
Marketing
53
Value/Cost
Ratio
# 60.0
# 53.3
Act.
53
Tgt.>
0 Cost of
0
Quality
As % of COGS
0
Act.
0
Tgt.<
Source: Michael Selby: ScoreCard Partners
10%
10.4%
0
130
130
R&D Days
Slippage
In # Days
# 22
# 130
Act.
130
Tgt.<
Call
1 Cntr Issues
1
st
Resolvd 1 Call
1
Act.
1
Tgt.>
In %
85%
89.4%
1
774
774
Snapshot
# @ Month End
# 769
# 774
Act.
774
Tgt.<
7
7
Product
Dvpt
Team Initiative
Avg. Days Late
7
Act.
7
Tgt.<
0
5
7
0 Internal
0
Mobility
0
0
Act.
Tgt.>
In %
25.0%
18.6%
0
Incentive
1
1 Pay
Strategic EE's
30% Over Base
1
1
Act.
Tgt.>
90%
74%
1
4
New Hire
Survey
Pulse
4
Survey
4
Last 4 Surveys
4.02
5 Point Scale
5 Pt. Scale
4
Act
4
Tgt.
4.00
4.02
4
4
Act.
4
Tgt.>
3.77
3.67
4
BayMed Balanced ScoreCard
Financial
Market/Customers
138 Overall
138
Revenue
112 Gross
112
Margin
27 EBITDA
27
YTD In \$M
YTD In \$M
YTD In \$M
# 137.3
# 138
Act.
137.5
Tgt.>
### Free
4864
Cash Flow
YTD in \$K
# 5,000
# ###
Act.
4,864
Tgt.>
Operational Excellence
# 112.2
# 112
Act.
112.1
Tgt.>
25
Standard
25vs.
Actual Costs
In \$M
# 24.1
# 25.5
Act.
25
Tgt.<
# 27.0
Act.
# 27.4
27
Tgt.>
34Inventory
34
On Hand
In \$M
# 33.0
# 34.0
Act.
34
Tgt.<
The Dashboard divides into 4
The Financial perspective
reports Revenues, Gross
Margins, EBITDA, Operating
Expense, Net Operating
Income, Free Cash Flow, and
any other Financial Data you
choose.
People & Culture
Revenue YTD, through May, 2010
Overall Revenue by Month
Products
Services/OEM
Total
Revenue Mix, YTD
Plan
Products
40
160
35
140
137.5
Svcs/OEM
137.3
123.7
31.5
28.4
25.3
120
46.3
27.9
10.0
24.5
Revenue \$M
30
Revenue in \$M
25
9.0
10.1
8.3
8.9
20
45.3
41.8
100
80
60
15
91.2
92.0
81.9
40
21.5
10
19.4
16.9
17.7
15.6
20
5
0
YTD '10
0
Jan-10 Feb-10 Mar-10
Plan
25.3
26.3
27.5
Apr-10 May-10 Jun-10
28.5
29.7
30.7
Jul-10
31.8
Aug-10 Sep-10
32.8
33.9
Oct-10
34.9
Nov-10 Dec-10
36.0
37.0
YTD Plan
YTD '09
YOY \$M
Products
9.3
Svcs/OEM
4.5
YOY %
11.3%
10.8%
BayMed Balanced ScoreCard
Financial
Market/Customers
The “Market/Customers”
perspective reports repeat
customers, new customers,
recent releases are
performing, customer
complaints and customer
satisfaction.
Operational Excellence
Repeat
0
Bsns:
0
Rev. Growth
Rev.
0
Growth
0
New Customers
15
Partnerships
YOY In %
In %
15 (Grn & Yel)
# Viable
10.0%
10.4%
Tgt.
0
Act.
0
Tgt.>
10.0%
11.0%
0
31
New Product
31
Rev. Growth
In \$M
# 27.10
# 30.74
Act.
31
Tgt.>
0
Act.
0
Tgt.>
0
32Customer
32
Complaints
In #'s
# 20
# 32
Act.
32
Tgt.<
People & Culture
# 12
Act
#
15
15
4Customer
4
Satisfaction
5 Point Scale
4
4
Act.
Tgt.>
4.00
3.94
4
YTD Repeat Business YOY, through May, 2010
YTD May, '10
YTD May, '09
BayMed Products
YTD Revenue in \$K
2,000
1,500
1,000
1,837
1,757
1,734
1,595
1,532
1,525
1,373
1,307
500
1,267
1,171
1,083
995
848
797
720
545
449
0
\$K
YTD '09
% Change
Hosp
Corp
Am er
Tenet
Health
Corp
Cath
Health
Init.
Sutter Method
Health
ist
Hosp
Cath
HC
West
Univ HC Kindrd
Svcs
HC
1,779
3.3%
1,816
-3.2%
1,623
6.9%
1,421 1,466 1,900 1,329
12.2% 4.5% -19.8% 3.3%
Com m Saint Sentara
Hth
Brnbs
Systm s
HC
851
1,170
53.7% 8.3%
1,225
-4.4%
1,036
4.5%
LifePoint
845
17.7%
Medical Health Perm
821
3.3%
884
-9.9%
BayMed Services
Multi-Plex
665
8.3%
Sanfrd Kettrng
Health HC Net
443
22.9%
40
4.5%
2,197
1,666
1,015
Datex
Ohm ed
Med- Siem ns
tronic
Med.
OEM
YTD Revenue in \$K
10,000
8,000
6,000
4,000
8,337
6,603
6,001
2,000
6,513
5,002
3,962
3,334
4,554
3,621
2,571
3,332
2,537
0
\$K
YTD '09
% Change
Hosp
Corp
Am er
Tenet
Health
Corp
Cath
Health
Init.
Sutter
Health
Kaiser
Perm
Cath
HC
West
8,037
3.7%
4,048 4,929 4,465 4,143 4,018
63.1% 21.7% 12.0% -4.4% -17.0%
Univ HC Sentara
Svcs
LifePoint
Method
ist
Hosp
4,804 3,762 3,576
35.6% 21.0% 1.3%
2,257
13.9%
Colin
Med
Critikon
2,760 2,500
20.7% 1.5%
2,320 1,500
840
-5.3% 11.1% 20.8%
Revenue from Targeted New Products, through May, 2010
Actual \$M
MPX-017
Target \$M
RC-7000
2
2.5
2
1.0
1
1
Revenue in \$M
1.5
1
1
2.06
1.921.97
1.81
1.74
Revenue in \$M
Revenue in \$M
2.0
1
1
Dialysis MiniLab
2
0.78 0.81
0.86 0.88
0.92
1
1.12
1.33
1.241.27
1.17
1
1
1
0.5
0
0
0
0
0.0
0
J
F
M
A M
J
J
A S
O
N
D
Immuno-B4
1.2
F
M
A
M
J
J
A
S
O
N
D
J
Boxter A5
1.2
0.77
0.81
0.92
Revenue in \$M
0.8
0.6
0.4
0.8
M
A
M
J
J
A
S
O
N
D
Silvon 2
0.6
1.0
0.85 0.87
F
0.7
0.89 0.92
0.81
0.96
0.5
0.84
Revenue in \$M
1.0
Revenue in \$M
0
J
0.6
0.4
0.41
0.42
0.45 0.46
0.48
0.3
0.4
0.2
0.2
0.2
0.0
0.1
0.0
J
F
M
A
M
J
J
A
S
O
N
D
0.0
J
F
M
A
M
J
J
A
S
O
N
D
J
F
M
A
M
J
J
A
S
O
N
D
Customer Complaints, Through May, 2010
Overall, by Month
Total
By Category
Target < 20
Shpmnt Accuracy 6 Mos
4%
2 Mos
35
2%
32
Shpmnt Timing
Eqpt Perfrmance
34%
6 Mos
12%
2 Mos
25
Documentation
# of Complaints
27%
2 Mos
30
20
20
6 Mos
18
20
9%
6 Mos
27%
2 Mos
23%
18
Pricing
12%
6 Mos
13%
2 Mos
15
Sales Honesty
6 Mos
12%
2 Mos
11%
10
Cust. Service
6 Mos
2 Mos
0%
2%
5
Tech Support
8%
6 Mos
6%
2 Mos
0
J
F
M
A
32
0
0
0
0
0
0
0
M
J
J
A
S
O
N
D
0%
10%
20%
30%
Category as % of Total
40%
BayMed Balanced ScoreCard
Financial
Market/Customers
Operational Excellence
“Operational
Excellence” reports the
People & Culture
core competencies which you have to
execute well to win customer loyalty.
Core Competencies vary by company
and industry. “BayMed” tracks sales
execution, marketing effectiveness,
product development speed,
manufacturing and customer support
excellence.
42
Sales Quota
42
Performance
QTD In \$M
# 41.5
Tgt.>
# 42.4
Act.
42
1 On-Time
1
Shipments
1
Tgt.>
Act.
1
In %
90.0%
88.1%
1
Raw
4 Materials
4
and OEM
Inventory Turns
4
Tgt.>
Act.
4
4.5
3.8
4
Marketing
53
Value/Cost
Ratio
# 60.0
Tgt.>
# 53.3
Act.
53
0 Cost of
0
Quality
As % of COGS
0
Tgt.<
Act.
0
10%
10.4%
0
130
130
R&D Days
Slippage
In # Days
# 22
Tgt.<
# 130
Act.
130
Call
1 Cntr Issues
1
Resolvd 1st Call
1
Tgt.>
Act.
1
In %
85%
89.4%
1
Sales Effectiveness, through May, 2010
Closed-6 Mo.
Written Quote
Pipeline Value (Sales Effectiveness)
Conversion Rates (Sales Efficiency)
Pipeline (Sales Activity)
Sales Analysis
Written Quote
Written Quote
Sales Analysis
Sales Analysis
Target
30
200
29
28
32%
62%
60%
31%
150
In \$M
83.4
Conversion %
112.7
102.8
110.5
86.7
100
28.4
50
29.5
23.1
12.6
15.0
11.7
12.3
14.7
12.9
23.6
21.0
24.9
0
69.6
44.4
27.2
16.7
6.8
6.6
11.8
10.6
12.3
17.0
NoAm - NoAm - NoAm - Latin EUREast Cntrl West Am er. West
Total \$M 163
155
185
86
16.4
6.6
4.8
7.9
38.0
13.8
12.0
18.4
QTD Tgt
58%
56%
51%
45%
82%
85%
83%
81%
80%
72%
66%
13.7
4.9
5.5
6.6
52%
Model
East
Asia
ROW
105
195
90
53%
52%
49%
51%
45%
40%
Q-End Target
7.47
6
4
2
8.37
7.27
6.64
5.90
8.23
3.99
9.18
8.52
7.89
5.81
5.40
3.93
5.55
2.49
3.74
5.08
2.12
3.28
2.08
1.82
0
% QTD
Target
5.8
NoAm - NoAm - NoAm - Latin EUREast Cntrl West Am er. West
EUREast
East
Asia
ROW
112% 109% 104% 107% 94%
85%
95%
88%
22
20
5.1
14
3.1
5.0
7.9
4.7
6.5
5.7
42%
5.8
6.4
4.4
9
3.9
3.4
2.0
2.0
1.8
1.9
2.8
6.4
6.3
5.5
3.3
NoAm - NoAm - NoAm - Latin EUREast Cntrl West Am er. West
EUREast
East
Asia
NoAm - NoAm - NoAm - Latin EUREast Cntrl West Am er. West
ROW
T'tl \$M
SelfGen-New
Conversion %
In \$M
8
6.6
7.6
28.3
SelfGen-Rpt
House-New
50%
20%
44%
25%
35%
33%
29%
40%
22%
47%
17%
53%
23.9
25.2
13.2
3,028,121
2,789,372
2,549,039
14%
58%
9%
65%
6%
69%
19%
18%
17%
14%
12%
10%
8%
7%
10%
12%
14%
14%
17%
17%
18%
18%
18%
NoAm - NoAm - NoAm - Latin EURModel East Cntrl West Am er. West
EUREast
East
Asia
2,390,387
2,249,382
2,187,429
Curacen
Brazilen LTD
Pramed
ROW
7.7
21.5
7.4
18.1
Name
YTD Revenue
% House
Closed
TriStar
6,310,405
28.8%
CTW Resellers
5,449,895
22.0%
Appenware
3,728,876
17.0%
Cypron Design
3,442,039
28.0%
Sond Inc
3,155,202
20.0%
2,868,366
18.0%
Inets Corp
2,294,693
27.0%
Xilent GmbH
1,434,183
24.0%
ROW
2,027,770
1,789,021
1,548,688
Kaiser Perm
Tulagen
AtlantaCare
8
East
Asia
House-Rpt
20%
Gesundbnd GmbH
HelioArc
SW Ministries
5.4
1.9
1.8
1.4
2.3
EUREast
Top Deals Pending
ChinLau
Catholic HC West
Methodist HC
4.6
Resellers
Revenue by Source
10.49
10
45%
6.7
15
10
68%
25
0
12.46
11.80
47%
5
14
12
73%
7.1
20
25%
24%
57%
50%
Quota Performance
QTD Actual
27%
27%
59.6
EUREast
178
25
30%
29%
In \$M
27%
1,390,036
1,249,031
1,187,078
Marketing Effectiveness, through May, 2010
60
53
50
44
487
40
400
248
22
195
69
0
27
318
22
19
122
200
123
Pubs
Replies
Show s
Blast
Em ail
Replies
4.4
3.8
0.5
8.4
83
155
56
89
WebDirect
Replies
Replies
2.9
4.0
33
Prospect Referrals
ing
from
(Phone) Partners
1.8
1.1
30
20
88
Direct
Mail
Replies
70
103 100
68.3
60
40
10
10
0
0
80
52.5
59
56
44
30
20
81
55.2
50
33.1
22.4
1.2
Direct
Mail
Replies
Pubs
Replies
.8
.8
Show s
Blast
Em ail
Replies
40
20
.2
1.1
.9
.4
WebDirect
Replies
Replies
0
1st 9 Mo. Rev. \$M
Mkt. Launch Spend
18.7
20
18
15.6
16
Prospect Referrals
ing
from
(Phone) Partners
14
19.0
10
8.7
10
8
5.0
3.3
3.8
4.5
5
4.5
4
5.2 3.8
3.3
2.6
0.9
2.3
3.4
7
6
7.8
3.3 3
2.8
2
5.6
4.9
0
11.3
7.4
2.5
4
9
6.3
8
6
9.1
15.3
6.7
12
2
Ratio
13.2
12.3
60
30
21.5
18.723
.4
44.4
Cost Efficiency of Last 12 Product Launches
Mktg Spend vs. Revenue
\$M
Value \$M
(# Qual
33
321
120
111
2.7
1.4
2.4
2.1
1.7
3.4
Product
Name
EnviroLab
Asthma
Pak
TRS3010
24 Hr.
Tri-Bon
Boxter
A3
Salivan
2
MPX017
RC7000
Dialysis
Minilab
ImmunoB4
Boxter
A5
Silvon
3.5
Launch
May-08
Jul-08
Sep-08
Sep-08
Nov-08
Nov-08
Dec-08
Feb-09
Apr-09
May-09
Jul-09
Aug-09
1
0
Ratio Revenue / Mktg
Spend
55
70
800
600
80
80
875
68
1,000
Ratio Target
Ratio Value/Cost
Lead Value/Cost Ratio, Last 3 Mos.
Ratio Actual
Product Development Schedules, through May 31, 2010
Boxter A7
Feasibility
Feasibility
Phase 2
Report
Approval
Com plete
Developm ent
Regulatory
Technical
Fully Functional
Subm issions
Report
Prototype
Com plete
Com plete
Phase 3
Approval
Transfer and Scale Up
Initial Run
Transfer Lots
Passes QA
Test
1 Mo. Ago
Now
11/1/09
1
1
12/15/09
1
1
2/15/10
1
1
2/28/10
1
1
3/31/10
1
1
4/15/10
1
1
6/30/10
0
0
7/31/10
0
0
Days Late
0
15
14
0
0
0
1000
1000
Date Com pleted
RC 8000
Feasibility
Feasibility
Phase 2
Report
Approval
Com plete
Developm ent
Regulatory
Technical
Fully Functional
Subm issions
Report
Prototype
Com plete
Com plete
Phase 3
Approval
Transfer and Scale Up
Initial Run
Transfer Lots
Passes QA
Test
1 Mo. Ago
Now
11/15/09
1
1
12/31/09
1
1
3/15/10
1
1
4/30/10
1
1
5/31/10
0
1
5/31/10
0
1
8/31/10
0
0
10/31/10
0
0
Days Late
0
0
59
61
46
31
31
31
Date Com pleted
TRS 3020
Developm ent
Technical
Phase 3
Report
Approval
Com plete
Transfer and Scale Up
Initial Run
Passes QA
Test
Transfer Lots
Design Validt'n
Rpt Com plete
Phase 4
Approval
Launch
Market PreDevice Mstr
Launch
Record
Com plete
Com plete
1 Mo. Ago
Now
9/16/09
1
1
10/3/09
1
1
11/30/09
1
1
1/15/10
1
1
3/1/10
1
1
4/12/10
1
1
6/1/10
0
0
7/1/10
0
0
Days Late
2
3
45
75
104
130
120
122
Date Com pleted
HIV MiniLab
Com plete
Feasibility
Product
Feasibility
Req'rm ents
Report
Drafted
Com plete
Phase 2
Approval
Developm ent
Regulatory
Fully Functional
Subm issions
Prototype
Com plete
1 Mo. Ago
Now
0
0
0
0
3/1/10
1
1
3/1/10
1
1
4/15/10
1
1
5/1/10
1
1
7/1/10
0
0
8/15/10
0
0
Days Late
#N/A
#N/A
0
0
0
0
1000
1000
Date Com pleted
Diabetes AB
Transfer and Scale Up
Launch
Device Mstr
Regulatory
Record
Approval
Com plete
9/15/10
9/15/10
Orig Launch Current Launch
11/30/10
12/31/10
Orig Launch Current Launch
8/15/10
11/1/10
Orig Launch Current Launch
3/15/11
8/15/10
Orig Launch Current Launch
Design Validt'n
Rpt Com plete
Phase 4
Approval
Market PreLaunch
Com plete
1 Mo. Ago
Now
10/15/09
1
1
12/1/09
1
1
1/1/10
1
1
3/15/10
1
1
4/30/10
1
1
5/31/10
0
1
0
0
0
0
Days Late
0
0
0
0
0
0
#N/A
#N/A
Date Com pleted
Orig Launch Current Launch
Phase 5
Approval
1/1/11
1/1/11
On-Time Shipments and Service by Business Unit, through May, 2010
Actual
Multiplexes
Target
BayMed Products
90.0
100
80
On-Time %
On-Time %
80
60
40
90.0 85.0 84.0 92.0 89.3
60
40
20
20
0
0
# Cm't
# OT
J
F
M
A
M
20
18
20
17
25
21
25
23
28
25
J
J
A
S
O
N
D
97.3 94.3
J
# Cm't
# OT
YTD OT %
F
80.6
M
89.0 83.2
A
M
88.1%
YTD OT %
J
A
S
O
N
D
89.5%
OEM
90.0
100
90.0
100
80
On-Time %
80
On-Time %
J
220 210 180 100 173
214 198 145 89 144
BayMed Service Contract Milestones
60
40
95.0
100
94.2
83.3 90.7 91.8 89.6
60
98.9
40
20
20
0
0
J
F
M
# Cm't 120 120 97
# OT
113 100 88
A
M
J
J
A
85 115
78 103
YTD OT %
S
O
N
D
J
90.0 84.9 88.7 88.0
F
M
A
M
J
J
A
#K Cm't 453 450 392 275 393
#K OT 448 405 333 244 345
89.8%
YTD OT %
90.4%
S
O
N
D
Inventory Turns Through May, 2010
Actual
Target
Work In Progress
Raw Materials & OEM
12
10
Inventory Turns
4
3
2
1
8
6
4
2
3.0
4.0
3.5
3.8
5.0 7.5 6.0 6.7 7.4
4.0
0
0
J
F
M
A
M
J
J
A
Gross Inventory Value \$M
Excess and Obsolete \$M
Net Active Value \$M
S
O
N
J
D
F
10.45
0.48
9.97
M
A
M
J
J
Gross Inventory Value \$M
Excess and Obsolete \$M
Net Active Value \$M
Finished Goods
2.0
Inventory Turns
Inventory Turns
5
1.5
1.0
0.5
0.4
0.5
1.0
1.3
1.4
J
F
M
A
M
0.0
J
Gross Inventory Value \$M
Excess and Obsolete \$M
Net Active Value \$M
J
A
S
0.98
0.01
0.97
O
N
D
A
S
3.18
0.12
3.06
O
N
D
Cost of Quality, through May, 2010
Actual
Total
Sustaining Engineering
12
Q Cost as % of COGS
Inventory Accuracy
4.0
2.5
3.5
10
2.0
3.0
8
2.5
6
4
1.5
2.0
9.6
8.9
7.2
10.4
3.4
1.5
6.7
1.0
2
1.6
2.0
1.6
1.7
F
M
Current Mo (\$M)
A
M
J
0.68
J
A
S
O
YTD (\$M)
N
D
2.81
0.0
J
F
M
A
Current Mo (\$M)
M
J
J
0.22
A
S
O
YTD (\$M)
N
D
0.75
J
1.0
1.0
5
0.8
0.8
4
0.6
0.6
0.9
0.4
Current Mo (\$M)
A
0.04
M
J
J
A
S
YTD (\$M)
O
N
D
0.21
J
A
S
O
N
YTD (\$M)
D
0.41
3.9
3.6
2.5
1
0.0
M
J
0.13
3.2
0.2
0.0
4.4
2
0.8 0.8 0.8
0.7
0.2
M
3
1.0 1.0
F
A
Warranty
6
0.5 0.6
M
Rework
1.2
0.6
F
Current Mo (\$M)
1.2
J
0.9
0.5
Scrap
0.4
1.2
0.5
0.0
J
2.1
1.0
2.7
0.5
0
Q Cost as % of COGS
Target
0
J
F
M
Current Mo (\$M)
A
M
0.05
J
J
A
S
YTD (\$M)
O
N
D
0.28
J
F
M
Current Mo (\$M)
A
M
0.23
J
J
A
S
YTD (\$M)
O
N
D
1.15
Call Center Statistics, through May, 2010
Actual
Target
% Issues Resolved on First Call
100%
100%
90%
95%
89.4%
J
F
M
A
M
85%
90.3%
73.9%
10%
88.1%
20%
76.0%
30%
91.2%
40%
90%
90.0%
50%
89.7%
60%
89.5%
% w/in 30"
70%
88.6%
# Calls/Month
80%
J
F
M
A
M
80%
0%
J
J
A
S
O
N
D
Calls K#'s 113 110 115 118 114
# Resolv'd 100 83 101 87 102
A
S
O
N
D
A
S
O
N
D
Average Talk Times
3:00
8.9%
8.5%
8.3%
8.6%
J
F
M
A
M
0:30
J
F
M
A
M
0:00
0%
Calls K#'s 113 110 115 118 114
Aban K#'s 10.9 9.8 9.8 9.8 9.8
1:00
2:17
9.7%
4%
1:30
2:24
6%
2:00
2:37
8%
2:30
2:33
10%
2:15
Time in Minutes & Seconds
12%
% Abandoned
J
Calls K#'s 113 110 115 118 114
<30" K#'s 101 98 103 108 103
% Abandoned
2%
J
J
J
A
S
O
N
D
J
J
BayMed Balanced ScoreCard
Financial
Market/Customers
Operational Excellence
People & Culture
“People & Culture” looks at
the workforce, reporting
workforce growth, internal
mobility and competency
development, strategically
vital employees, hiring
quality, and employee
engagement.
774
774
Snapshot
# @ Month End
# 769
# 774
Act.
774
Tgt.<
7
7
Product
Dvpt
Team Initiative
Avg. Days Late
7
Act.
7
Tgt.<
0
5
7
0 Internal
0
Mobility
0
0
Act.
Tgt.>
In %
25.0%
18.6%
0
Incentive
1
1 Pay
Strategic EE's
30% Over Base
1
1
Act.
Tgt.>
90%
74%
1
4
New Hire
Survey
Pulse
4
Survey
4
Last 4 Surveys
4.02
5 Point Scale
5 Pt. Scale
4
Act
4
Tgt.
4.00
4.02
4
4
Act.
4
Tgt.>
3.77
3.67
4
% Overage Open Reqs (>60 Days)
115%
90%
% Reqs >60 Days Old
100.7%
97.2%
95.4%
102.4%
102.0%
99.2%
95%
88.4%
108.4%
98.4%
100%
110.0%
105%
109.1%
Actual %
50%
110%
40%
40%
Acceptable Level
Target
38% 39%
33%
27%
30%
20%
10%
0%
Total
69
71
774
769
0-30
31-60
61-90
>90
1
1
1
New
New
Replacement
14
22
1
1
2
1
1
Involuntary
Voluntary
Total
4
Sales
2
1
Q.A.
2
Mtrls
Total
Sales
Q.A.
Mtrls
Mktg
0
1
Mktg
2
10
1
4
2
Mftg
2
8
6
IT
2
Involuntary
4
Eng
1
1
Mftg
4
1
IT
1
1
Eng
3
2
10
CustSvc
8
CustSvc
0
1
1
2
8
6
5
2
1
14
12
5
1
2
1
1
D
16
Actg/Fin.
Terms by Department
2
8
Actg/Fin.
Hires by Department
10
4
1
1
Voluntary
12
6
2
1
N
Terminations, YTD
New & Replacement Hires YTD
Replacemt
1
2
2
1
O
Total
Sales
62
65
S
Sales
Q.A.
42
41
A
Q.A.
Mtrls
50
49
J
Mtrls
Mktg
256
258
J
Mktg
Mftg
38
43
M
Mftg
IT
116
107
A
IT
Eng
55
50
M
Eng
CustSvc
62
63
F
24
22
Actg/Fin.
Actg/Fin.
Actual
AOP
J
CustSvc
85%
13
18
Employee Development and Mobility, through May, 2010
People Trained in Key Programs, YTD
Performance Evals in Last 12 Mos.
Target: 100%
% w Dvpt Plans
% Employees Completing
100
97
89
80
94
99
90 89
100
93
93
90 90
98
91
90
83
83
82
77
60
56
55
40
20
80%
60%
40%
83%
95%
88% 92%
89%
87%
82%
76%
72% 68%
57%
20%
0
0%
CrossSelling
Product MultiTier
Knwldge Selling
Project
Mgmt
Process Cust'mer
Mapping Req'rmnt
Mgmt.
Basics
Sr. Mgt.
Seminar
Fin.
HR
Total
Acutal #
Target #
Target
100%
% EE's Evaluated
Live Training
35
36
64
72
17
18
71
72
15
18
10
18
18 214 18 144 22 112 14
20 240 20 160 40 120 15
12
12
23
30
39
40
18
20
35 162 666 # Eval'd
42 197 734 # EE's
20
24
Development Plans Updated in Last 12 Mos.
% w Dvpt Plans
59
62
Cust
Svc
Eng
IT
Mftg
Mktg
Mtrls
Q.A.
48
55
84
116
26
38
228
256
38
50
37
42
57
62
Sales Total
39
69
636
774
Internal Mobility Last 12 Mos.
% Lateral
Target
% Vertical
Target
35%
100%
% Mobility
% EE's Evaluated
30%
80%
60%
40%
79%
84%
82%
76%
58%
74%
63%
74%
79%
13%
25%
11%
20%
15%
4%
10%
7%
6%
54%
10%
20%
5%
7%
6%
4%
19% 18%
13%
11%
3%
12%
10% 12% 10%
5%
0%
Acutal #
Target #
4%
12%
4%
0%
Actg/
Fin.
19
24
HR
51
62
Cust
Svc
46
55
Co-Wide Actual
556
Eng
IT
Mftg
Mktg
Mtrls
Q.A.
Sales
67
116
24
38
195
256
37
50
31
42
49
62
37
69
Co-Wide Target
774
Co-Wide %
72%
Fin.
HR
# Lateral
3
12
# Vertical
1
8
# EE's
24
62
Cust
Svc
10
6
55
Eng
IT
Mftg
Mktg
Mtrls
Q.A.
13
7
116
2
1
38
31
18
256
5
2
50
5
4
42
6
4
62
Sales Total
3
3
69
90
54
774
Strategically Critical Employees, for the Month of May, '10
% with Development Plans In Place
100%
90%
90%
90%
80%
70%
60% 94%
100% 100%
100% 100%
88%
83%
80%
70%
100% 100%
60%
90%
81%
75%
71%
50%
63%
100%
% Receiving 360's
100%
50%
80%
70%
100%
60%
50%
40%
30%
30%
30%
FIN
10
10
HR
5
5
Total
95
114
#w DvpPln
# EE's
% Eligible >30% Incentive Pay
R&D Mktg BsDev Sales Mftg
25
7
3
12
24
31
7
3
17
41
FIN
9
10
HR
5
5
Total
85
114
# 360'd
# EE's
% Met w/ Mentors Last 2 Mos.
90%
90%
90%
80%
70%
50%
100% 100%
90%
74%
71%
80%
70%
100%
60%
90%
84%
50%
67%
60%
40%
40%
44%
R&D Mktg BsDev Sales Mftg
29
5
3
17
18
31
7
3
17
41
71%
43%
41%
FIN
9
10
HR
3
5
Total
84
114
# Met Mntr
# EE's
STRATEGIC POSITIONS
# Strategic Positions
Total Positions
% Strategic Positions
64%
49%
R&D Mktg BsDev Sales Mftg
21
5
3
12
20
31
7
3
17
41
FIN
9
10
HR
3
5
Total
73
114
80%
70%
60%
50%
61%
67%
61%
40%
44%
30%
30%
# w >30%
# EE's
% w/ Int. Replacemnt
100%
% Met w/ Mentors
100%
94%
71%
% w/ Available Internal Replacement
100%
60%
68%
60%
40%
R&D Mktg BsDev Sales Mftg
29
7
3
15
26
31
7
3
17
41
90%
59%
40%
# 4's & 5's
# EE's
% Elig. >30% Incentive.
% Receiving 360° Evaluations
100%
% w/ Dvpt. Plans
% Rated 4 or 5
% Strategic EE's Rated 4 or 5
71%
63%
70%
60%
63%
HR
3
5
Total
72
114
43%
30%
R&D Mktg BsDev Sales Mftg
26
3
2
7
18
31
7
3
17
41
FIN
9
10
HR
5
5
Total
70
114
R&D Mktg BsDev Sales Mftg
31
7
3
17
41
116
41
9
124 360
27% 17% 33% 14% 11%
FIN
10
62
16%
HR
5
62
8%
R&D Mktg BsDev Sales Mftg
#w R'plmnt 19
3
2
12
26
# EE's
31
7
3
17
41
Total
114
774
15%
FIN
7
10
Product Development Process Improvement Initiative, through May 31, 2010
PDP Intiative
Joe Brownley
Bsns Case
Template
Approved
Comp. Analysis
Template
Approved
Feature/Function
Template
Approved
Exit criteria for
All PDP Steps
Approved
Training for All
Applicaable Mgrs
& EE's
Mftg.
Deliverables
Approved
Cust. Support
Deliverables
Approved
1/15/10
2/1/10
2/15/10
3/1/10
4/1/10
4/15/10
5/15/10
Date Com plete (Future)
Documentation
Training for All
Plan Template Applicaable Mgrs
Approved
& EE's
6/15/10
7/31/10
1 Month Ago
Now
5
15
0
0
-5
10
5
Com m ents First Training Held on April 10; poor attendance from Marketing and Manufacturing; 2nd Session to be held on June 10
Product Dvpt Process Training YTD
Actual
Product Team Staffing Levels
Eng
Target
16
30
Mftg
2
2
30
14
2
3
# Staff on Team
12
20
30
15
12
1
1
10
6
Mktg
EE's
1
12
2
2
2
0
1
12
4
12
Eng
Mgrs
2
3
0
1
10
Eng
EE's
1
2
8
6
0
2
2
12
10
5
3
2
3
2
25
YTD Completions
Mktg
18
35
15
""
3
0
Mktg
Mgrs
3
3
3
Mftg
EE's
Mftg
EE's
Product Team
10
9
10
10
8
10
9
10
8
2
0
Plan Act
Plan Act
Plan Act
Plan Act
Plan Act
Plan Act
Elixir
Tappan
FDA Merc
HyperBow
Merc 2
New Hire Surveys, Last 6 Months
SURVEY ITEM
Team prepared for my arrival
Benefits/ee programs meet expectations
Know who to ask re: processes/projects
My training plan exists
Mgr & I have established my goals
Mgr interested in me as a person
I see how my goals fit w/ team's goals
My job is as was described in interviews
I know/can approach mgmt team folks
Overall, this is a great place to work
# Surveys
SURVEY ITEM
Position filled in acceptable timeframe
I had high quality candidates to recruit from
Recruiting/Sign On/Relocation \$ adequate to attract
OnBoarding process gave EE valuable Gen. knowledge
New EE's tech skills as strong as I had hoped
Interpersonal/Org. skills as strong as I had hoped
Starting Salary set at right level compared to peers
New EE ramped up learning curve as fast as I had hoped
EE will be fully competent in this position in 12 months
EE has met or exceeded my expectations
# Surveys
Eng/
IT
4.0
4.0
4.1
3.1
3.9
4.1
4.1
3.9
4.3
4.5
10
EMPLOYEE SURVEY
Sales
Marketing/ Mftg/QA/ Acctg/Fin/
3.6
3.8
3.9
3.8
4.1
4.2
3.7
3.3
3.6
3.8
3.8
3.9
3.6
3.6
3.4
3.7
4.1
3.6
4.2
4.1
4.6
3.9
3.8
3.9
4.1
3.9
4.2
4.3
4.6
3.9
3.9
4.1
4.6
4.1
4.2
4.4
4.6
4.0
4.4
4.5
3
2
14
6
Eng/
IT
MANAGER SURVEY
Sales
Marketing/ Mftg/QA/ Acctg/Fin/
3.5
3.5
3.9
4.2
4.0
4.5
4.2
4.2
3.3
2.4
8
4.1
3.6
4.1
3.6
3.1
3.6
4.1
4.1
4.1
3.6
3
2.4
3.6
3.9
4.3
4.3
3.8
4.1
4.3
3.8
4.1
2
3.4
3.0
3.5
4.0
4.4
4.1
4.4
4.0
4.5
3.8
11
3.3
3.8
3.7
3.9
3.7
4.0
3.7
4.2
3.3
3.8
5
BayMed Balanced ScoreCard
Financial
Market/Customers
138 Overall
138
Revenue
112 Gross
112
Margin
27 EBITDA
27
YTD In \$M
YTD In \$M
YTD In \$M
# 137.3
# 138
Act.
137.5
Tgt.>
### Free
4864
Cash Flow
YTD in \$K
# 5,000
# ###
Act.
4,864
Tgt.>
# 112.2
# 112
Act.
112.1
Tgt.>
25
Standard
25vs.
Actual Costs
In \$M
# 24.1
# 25.5
Act.
25
Tgt.<
# 27.0
Act.
# 27.4
27
Tgt.>
34Inventory
34
On Hand
In \$M
# 33.0
# 34.0
Act.
34
Tgt.<
QTD In \$M
# 41.5
# 42.4
Act.
42
Tgt.>
1 On-Time
1
Shipments
1
Act.
1
Tgt.>
In %
90.0%
88.1%
1
Raw
4 Materials
4
and OEM
Inventory Turns
4
Act.
4
Tgt.>
4.5
3.8
4
Rev.
0
Growth
0
New Customers
15
Partnerships
YOY In %
In %
15 (Grn & Yel)
# Viable
10.0%
10.4%
Tgt.
0
Act.
0
Tgt.>
10.0%
11.0%
0
31
New Product
31
Rev. Growth
In \$M
# 27.10
# 30.74
Act.
31
Tgt.>
0
Act.
0
Tgt.>
0
32Customer
32
Complaints
In #'s
# 20
# 32
Act.
32
Tgt.<
# 12
Act
#
15
15
4Customer
4
Satisfaction
5 Point Scale
4
4
Act.
Tgt.>
4.00
3.94
4
People & Culture
Operational Excellence
42
Sales Quota
42
Performance
Repeat
0
Bsns:
0
Rev. Growth
Marketing
53
Value/Cost
Ratio
# 60.0
# 53.3
Act.
53
Tgt.>
0 Cost of
0
Quality
As % of COGS
0
Act.
0
Tgt.<
10%
10.4%
0
130
130
R&D Days
Slippage
In # Days
# 22
# 130
Act.
130
Tgt.<
Call
1 Cntr Issues
1
st
Resolvd 1 Call
1
Act.
1
Tgt.>
In %
85%
89.4%
1
774
774
Snapshot
# @ Month End
# 769
# 774
Act.
774
Tgt.<
7
7
Product
Dvpt
Team Initiative
Avg. Days Late
7
Act.
7
Tgt.<
0
5
7
0 Internal
0
Mobility
0
0
Act.
Tgt.>
In %
25.0%
18.6%
0
Incentive
1
1 Pay
Strategic EE's
30% Over Base
1
1
Act.
Tgt.>
90%
74%
1
4
New Hire
Survey
Pulse
4
Survey
4
Last 4 Surveys
4.02
5 Point Scale
5 Pt. Scale
4
Act
4
Tgt.
4.00
4.02
4
4
Act.
4
Tgt.>
3.77
3.67
4
Metrics that Matter: Empirical Study
 Study Background
 Metrics Matter to Performance
 Fast, Effective Metrics
 Manufacturing Enterprise Solutions Use
 Metrics Framework Success
Industry Council
MESA Guided Project
 Scott Daugherty, Plant Manager, Cormetech Inc.
 John Plassenthal, Project Manager, Strategic
Integration, Enterprise Applications IT, International
Truck and Engine
 John Moore, Quality Program Manager, KLA
Tencor
 Neil Crew, Group IT Director, Princes Limited
 Brian Leinbach, MES Deployment Team Lead,
Wyeth Pharmaceuticals
Response Demographics
 On-line: 135 different manufacturers
 Representing 20 industries
 Range of Products Counts & Mix in plants
 Nearly evenly divided by size:
over \$2B, \$500M-\$2B, under \$500M
Every Production Type
Packaging
plus batch or
process
18%
Source: MESA Metrics
that Matter:
Uncovering KPIs that
Justify Operational
Improvements
Other Mixed
Mode
10%
Batch
Process
28%
Discrete
22%
Continuous
Process
22%
Three Major Respondent Groups
by Role
Line of
Enterprise
21%
IT /
Production IT
38%
Source: MESA Metrics
that Matter:
Uncovering KPIs that
Justify Operational
Improvements
Plant Manager
/ Plant
Operations
41%
Metrics Justify Improvement
 Industry struggles with the financial hurdles
 Disconnect between operations, IT and finance
 Bridging gap justifies projects
Financial Metrics







Net Operating Profit (78%)
EBITDA (71%)
Labor cost per unit (68%)
Customer Fill Rate / On-time Delivery (64%)
ROA / RONA (62%)
Economic Value / Economic Profit (60%)
Market Share (54%)
Top Productivity Metrics
 Revenue per employee
 Revenue per square foot
 Cash-to-cash cycle time
Source: MESA Metrics that Matter:
Uncovering KPIs that Justify Operational Improvements
Improvement to Financial Metrics
Less
improvement/
Don't Know
55%
Source: MESA Metrics that Matter:
Uncovering KPIs that Justify Operational Improvements
Improved by
>10% in 2+
metrics
19%
Improved by
>10% in 1
metric
10%
Improved by
>1% in 6
metrics
16%
Operations Areas Also
Source: MESA Metrics
that Matter:
Uncovering KPIs that
Justify Operational
Improvements
C
Fl
ex
ib
ili
ty
C
om
pl
ia
nc
e
U
til
iz
at
io
n
In
ve
nt
or
y
hp
ut
Th
ro
ug
er
vi
ce
er
S
us
to
m
Q
ua
lit
y
80%
70%
60%
50%
40%
30%
20%
10%
0%
Others
Some Operations KPIs
Are Common Across Segments
OSHA-reportable incidents/year
On-time delivery to customer request
On-time delivery to commit
Manufacturing cycle time
Average hours overtime/week
Average days total inventory
First-pass yield
Capacity utilization
0%
Source: MESA Metrics
that Matter:
Uncovering KPIs that
Justify Operational
Improvements
20%
40%
60%
80%
100%
Lower
Improvements /
Don't know
0%
20%
40%
60%
80%
100%
Better<------------------------------------------>Worse
Very/Pretty
Somewhat
Not very / In a few places
Source: MESA Metrics that Matter:
Uncovering KPIs that Justify Operational Improvements
24 Hours or Faster Feedback to
Operators So They Can Take Action
50%
40%
30%
20%
10%
0%
Source: MESA Metrics that Matter:
Uncovering KPIs that Justify Operational
Improvements
Others
and Operations that Cause Them
100%
90%
80%
70%
Annually
Quarterly
Monthly
Weekly
< 24 hours
60%
50%
40%
30%
20%
10%
0%
Source: MESA Metrics that Matter:
Uncovering KPIs that Justify Operational
Improvements
Others
Most Common Applications in
Investment Plans for Next 12 Months
Plant Dashboards
MES
SPC/SQC
Data Collection - Bar Coding
Work Instruction Delivery
0% 10% 20% 30% 40% 50% 60% 70%
Widely in Use
Source: MESA Metrics that Matter:
Uncovering KPIs that Justify Operational Improvements
Planning to Buy in next 12 Months
Gaining Benefits from
Manufacturing Software
Enterprise Resources Planning
Manufacturing Execution System
Process Management
Product Track & Trace
Production Dispatching
Maintenance Management
Labor Management/Time & Attendance
SPC/SQC
0%
<2 Years ROI
Source: MESA Metrics that Matter:
Uncovering KPIs that Justify Operational
Improvements
>2 Years ROI
20%
40%
No ROI Yet
60%
80%
100%
Not Measured
% with >1% annual improvement
Those with MES &
Dashboards Perform Better
70%
60%
50%
40%
30%
20%
10%
0%
OSHA-reportable On-time delivery
incidents/year
to customer
request
Use MES
Source: MESA Metrics that Matter:
Uncovering KPIs that Justify Operational
Improvements
On-time delivery
to commit
No MES
Manufacturing
cycle time
Use Plant Dashboard
Average hours
of overtime per
w eek
Average days
total inventory
No Plant Dashboard
MESA Metrics Framework
Corporate
Financials
Aggregated Financial
& Operations Metrics
Operations-level KPIs &
Dynamic Performance Metrics
Source: Metrics that
Matter Guidebook & Framework
Audience:
Increasing ability to take action
Increasing aggregation
Profitability
CFO, CEO
Plant Accounting,
Finance
Plant Management,
Operations
Management
Operators, Supervisors,
Quality, Engineers,
Technicians
Graphical Representation
of Metrics Framework
Corporate Strategy: Increase Brand Margin & Value
Strategy
Strategy
Net margin per brand
Financial Metrics
Action
Operational
Metrics
Action
Strategy
# of Profitable
Brand
ExtensionsAction
Plant
Strategy
Metrics
Action
Strategy
Measure
Action
Strategy
Measure Action
NPI
Rampup Time
Measure
Strategy
Measure Action
Source: Metrics that Matter Guidebook & Framework
Strategy
Measure Action
Planned vs.
Upside
Production Emergency
Flexibility Maintenance
Measure
Strategy
Lower
Production
Costs
Action
Reduce
Stock-outs
Strategy
Measure Action
Changeover
Speed
Measure
Measure
Strategy
Measure Action
First
Pass
Yield
Strategy
Measure Action
OEE
Measure
Energy
Consumption
Per Unit
References
 Charlie Gifford, Lean
Production, MESA
International.
 Michael Selby, Scorecard
Partners.
 Kaplan &Norton: The
Balanced Scorecard.
```

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