Getting 'up to speed' on management dashboards.

Editor's Note: This is the third of an occasional series on the management of technical and business issues in the global paper industry.

Is your company off course? Find out with a new measurement tool called the management dashboard. Like the on-line screens in your operator's control room, this highly efficient management tool can help you navigate through a confusing and conflicting universe.

A management dashboard is a web-enabled information tool that collects and presents a variety of management data from within a company in one easy-to-access interface. The dashboard can be accessed from any work function or location within the client company. A number of IT service providers currently offer software and services that include a variation of this idea; clients can usually customize the type of information monitored, and who within the company can access the information.

A management dashboard reflects a sophisticated business model that helps management understand what is driving its company's success. It keeps track of hard numbers that indicate financial progress, as well as softer measures--everything from return on working capital to customer satisfaction--that need to be managed along the road to profitable growth. For example, from the perspective of a capital-intensive industry, a dashboard might graph the return on net assets (is it rising or falling and where?) and also tally the company's safety record (is it improving or deteriorating and where?)

ARE WE ON THE RIGHT ROAD?

More importantly, a dashboard helps focus management's attention using a language common across the company. It allows managers across the entire organization to be certain they are talking about the same thing when they communicate. For example, if customer orders are not being produced on time and customer satisfaction is dropping, then people from sales, production, maintenance and purchasing will be reading the same score, and can tackle the problem from common ground The foundation of this approach is a rigorous performance measurement system linked to the business strategy of the company and its asset management strategy.

It's fine to talk about profits, but the management dashboard approach also includes knowing the health of other key business drivers. Managing the financials will not necessarily produce better financial results, because financials only tell you where you have been--they are lagging indicators. To improve performance, we need to know both our history (how we are doing) and our direction (where we are going.)

Ultimately, success is not only about "building a better mousetrap" or doing what we do better-faster-cheaper. It is also about understanding how the mousetrap, old or new, creates value. A management dashboard can help companies understand plant and equipment performance in a way that is directly linked to corporate strategy. It tells your plants how well their external relationships with suppliers and regulators are functioning. It shows how reliability in plants and equipment is a big contributor to sustainable bottom-line improvements.

The real value of this approach is that it drives managers at all levels to reexamine assumptions about what drives plant and equipment performance. It drives managers at all locations to focus on and become much more explicit about what matters to the customer, and ultimately what matters to the shareholder--all from an asset management point of view. The results show up as reduced need for capital, reduced operating expenses, increased plant capacity, and quantified return on net assets--all of which translate into improved bottom line performance.

Gail Petersen is an asset management consultant with Datamasters, a professional services firm specializing in information technology. You can reach her by email at: [e-mail] or by telephone at: 604-228-0915.