When setting process measures, there are four key areas where I start:
- Cycle Time
I’ll be exploring these over a series of blog posts on Measures starting with this post on Volume.
Volume seems like a simple measure. At its root, it is concerned with how many. Lets consider a simple a simple loan process and dig in a little deeper.
First, should I measure the number of loans, or the $ value of the loans processed? Is there another weighting factor that affects the process that I should measure?
The loan process has two types of loans. Do I need to measure volume separately for each type or jointly? What if there is different process requirements for each type?
Our process has 3 steps: Capture, Approve, Fund. There is drop-off after each step, so that volume at the first step will be different than subsequent steps. How do I account for this? If there are dependencies, and parallel steps, they may also need to be accounted for. Volume measurement gets more interesting as transactions become longer running. Over what period do I measure? Do I care about:
- The number in each step (how many loans need funded),
- The number that passed through each step (how many loans got approved today and may or may not yet be funded regardless of when we captured the loan), or
- The number that got converted through the process steps (of the loans captured this week, what percent were approved, are funded)
I have multiple processors at each step. Do I want to measure volume separately for each processor, or is jointly OK? What if the processors are more specialized or have different levels of approval authority?
Volume measures can get complex very quickly. So, be sure to understand how volume measures are being used. Depending on what level of visibility is required and how it impacts management or the ability to optimize processing, there can be many dimensions to how volume gets tracked and reported.