Companies or organizations often misuse Engineering resources at the expense of accomplishing the goals for these technical resources. Measurement is key to identification of the activities and limit of the "leaks" affecting the department. It has been said "you can only manage what you can measure" and measurement is key to an efficient/effective engineering department or organization.

As a guiding principle, application of metrics should embody these characteristics:

• simple to record and track; minimize the total number of measures
• meaningful in relation to the work at hand and practical
• related to or in support of the business goals
• kept active and accurate (revise as required)
• available at all times to key personnel responsible (post or distribute)
• reviewed periodically with all of the personnel (obtain feedback)
• management interest, involvement and support in achieving results

The metrics applied should be tailored to the activity or department and documented using a meaningful frequency. Many of the metrics may stand alone or be plotted against hours, orders or project elements. For an on-going effort such as backlog or changes per a base number of features, a rolling average may be desirable in addition to a single time related value.

In other words, focus on the issues important to the business and activities key to success. Initiate one or two metrics per area of interest or product type. Begin with a few immediately and grow into the desired full set.

The following list is broader than needed but it provides an indication of the types of metrics that can be applied. This list assumes a business that supplies a product or service per customer request or potential multiple selection of model sizes or custom features.

STAFFING:

• Hours spent (or % of total) for submittals, sales orders, product development, manufacturing support, change, or "other" support.

ORDERS:

Total number of active orders per product group over time

• Number of submittals in process vs active orders (backlog)
• Schedule performance, actual vs estimated, or % on time

SUBMITTALS:

• Estimated hours per order vs actual hours per order
• Number of sales orders in process and hours required
• On time (schedule) release to next group (release to design)
• Average drafting hours per order or per estimate of project
• Available man-hours per product vs backlog hours per product
• Number of changes: pre and post release per order or project

DESIGN/DRAFTING:

• Estimated hours per order vs actual hours per order or project
• Number of sales orders in process and hours required
• On-time (schedule) release to production (days missed included)
• Average drafting hours per order or per project element
• Available man-hours per product vs backlog hours per product
• % errors vs total number of drawings per order, time period, project
• Number of changes pre and post release (per order, project, etc.)

DESIGN/ENGINEERING:

• Proposals won vs total submitted
• Estimated hours per order, project vs actual expended
• Number of sales orders in process and hours required
• Available man-hours per product vs backlog hours per product
• Number of changes, pre and post release
• % of corporate revenue from products developed in last 4 years

ENGINEERING/PRODUCT QUALITY:

• Warranty expense as a % of shipped $
• Field or customer complaints vs total items shipped
• Retrofit or rework $ as % of shipped $
• Engineering hrs addressing complaints vs total available
• Product or component MTBF (mean time between failures)

CR4 would like to thank Bob Cox of GEA Consulting, for contributing this blog entry, which originally appeared here