From goals to operating decisions
Connect a measurable goal to a practical action and the assumption that makes it worth trying.
Translate a broad goal into a measurable outcome, a practical action, and an explicit assumption linking the two.
Overview
At Riverton Tools, an established manufacturer, the plant manager tells the team to “improve delivery reliability.”
The manager needs to define the result, choose a practical change, and explain why that change should help.
Both businesses and all figures in this lesson are fictional teaching assumptions.
Recall Lesson 009: Why did Lane Bicycle Service need more guidance than “increase revenue by 20%”? Think of one decision that the target could not settle.
Define the result
An outcome is a result you want to achieve. An action is something people do to influence it. Completing a training session is an action; reducing customer errors could be the desired outcome.
Make the outcome specific enough that two people could independently judge progress. Name the customer or process, the measure, its current level, the target, and the deadline. The current level is the baseline.
The Institute for Healthcare Improvement recommends measurable aims with deadlines and a clearly defined population and setting. It also connects numerical targets to proposed changes and available resources. We can apply that planning discipline to business operations. Source: IHI.
Riverton could aim to raise the share of orders shipped by their original promised date from 90% to at least 95% over the next four weeks. “Original” matters: changing a late order's promised date should not make the delay disappear from the measure.
That measure covers dispatch from the factory. It does not establish when customers receive their orders. If arrival reliability is the real customer problem, the manager needs an arrival measure too.
Connect an action to the outcome
An operating decision commits people, time, money, or a work method. “Improve service” leaves the work unspecified. “Assign a coordinator to check tomorrow's materials by 3 p.m. each day” tells someone what to do.
The link between action and outcome is an assumption: something you believe must hold for the plan to work. Write it plainly: “If we check materials earlier, we can fix shortages before production starts, so fewer orders leave late.”
That sentence contains a prediction. Earlier checks will help only if shortages can actually be resolved in time. A supplier requiring six weeks to deliver a missing part could defeat the plan.
Assign someone to carry out the change, specify the resources available, and set a review date. Also identify a result you must protect, such as product quality or customer waiting time. People can otherwise improve one number while creating a different problem.
The Model for Improvement separates aims, measures, and proposed changes, then encourages small tests and adjustment based on what happens. A test gives managers evidence to revise a plan; it does not guarantee success. Source: IHI.
Worked example
Riverton had 200 orders due last week. It shipped 180 by their original promised dates. Of the 20 late orders, 12 were delayed by missing materials and eight by other causes. Each late order has one recorded primary cause in this simplified example.
The on-time shipment rate is on-time orders divided by all orders due, multiplied by 100. Last week's rate was 180 ÷ 200 × 100 = 90%.
With another 200 orders due, a 95% target requires 0.95 × 200 = 190 on-time shipments. Riverton therefore needs ten additional on-time orders: 190 − 180 = 10. The rate must rise by five percentage points, from 90% to 95%.
The manager proposes a daily materials check for four weeks. The coordinator will use 30 minutes of existing work time each day, replacing a duplicative report. Production and purchasing agree to address flagged shortages.
If next week's delay pattern matches the baseline, preventing ten of the 12 material-related delays would reach the target. Preventing only six would produce (180 + 6) ÷ 200 × 100 = 93%. These are conditional calculations, not forecasts.
The plan depends on shortages being detectable and fixable early enough. Review the 12 cases before starting. During the test, record whether checks occurred, which shortages were resolved, and whether the affected orders shipped on time.
Review results weekly and after four weeks. Count damaged or incorrect shipments too, so the team does not gain speed by skipping quality checks. If order volume changes, calculate the rate using all orders due in that period.
A better rate after the change would be encouraging. It would not alone prove that the check caused it: easier orders, better supplier performance, or other changes could contribute.
Exercise
Allow 6–8 minutes. You own Maple Bakery and want more reliable pickup orders. Last week, 80 of 100 prepaid orders were ready by the pickup time originally agreed with the customer. Fifteen were late because packing started too late; five were late because baking finished late. Assume one primary cause per late order.
You propose having an employee prepare boxes and labels for 30 minutes before the morning rush. That employee would spend less time preparing the counter display. No extra paid hours are available. Your proposed target is at least 90% ready on time over the next four weeks.
- State the measurable outcome, including baseline and deadline.
- At 100 orders per week, how many additional orders must be ready on time? How many of the 15 packing delays must the change prevent if everything else stays the same?
- Write the proposed action and the assumption linking it to the outcome.
- Name one possible downside and how you would check it. Write a short brief naming the goal, action, responsible person, measure, and resource constraint.
Answer
The outcome is to raise the share of prepaid pickup orders ready by their original agreed time from 80% to at least 90% over the next four weeks. Record readiness times against the original order records.
At 100 orders, the target requires 0.90 × 100 = 90 ready on time. That means 90 − 80 = ten additional orders. Preventing ten of the 15 packing delays would suffice if the other delays remain unchanged.
The action is to assign 30 minutes before the rush to preparing boxes and labels. The assumption is that this preparation removes enough packing delays without causing new delays elsewhere. Late packing might instead reflect missing items or last-minute customer changes, so inspect recent orders before treating preparation as the solution.
Less display preparation could leave counter products unavailable when customers arrive. Check that products are displayed on time, alongside pickup readiness. If that worsens, revise the work allocation.
A short brief could read: “The owner will assign the opening employee 30 minutes for box and label preparation, aiming to raise on-time pickup readiness from 80% to 90% over four weeks. The owner will review original pickup times and counter-display readiness weekly. The test uses existing hours and assumes advance preparation prevents at least ten packing delays per 100 orders without creating other delays.”
Recall answer: Lane's growth target did not decide which customers to serve, which service promise to make, or whether to accept custom builds.
Applying this lesson
Before assigning work, complete this sentence: “We will take this action to move this measure from this baseline to this target by this date, because we believe this link will hold.”
Next: Organizations, authority, and accountability. We will examine who should decide, who should be consulted, and when to escalate a decision.
Sources
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