Post-pandemic manufacturing is struggling with broken supply chains, inflation, skills shortages amongst employees, and tougher sustainability regulations combined with increased customer expectations. Getting the right mix of purpose and metrics can have a serious impact on your position in the market and growth. Having a clear and unambiguous purpose statement has never been more important and by aligning your production metrics to your purpose, you can supercharge your operational efficiency. Deloitte research shows that businesses with a strong purpose are much more attractive for employees, experience higher employee engagement and achieve greater job satisfaction. And guess what? These businesses are also more profitable.
Don't forget your purpose in all the available data
In 2025, many manufacturing organisations are increasing their investments in integrated analytics tools. Why? Two reasons. Firstly, most organisations are drowning in data from ERP systems, IT/OT sensors, CRM systems and data platforms, all contributing to the morass of information required to run complex manufacturing operations.
Secondly, integrated analytics tools allow manufacturers to cut through the data and make accurate data-driven decisions quickly. This could include finance, sales, marketing or future investments, and at any level, from the production site to the C-suite.
In post-pandemic manufacturing, it’s critical to be able to rely on accurate data and make good decisions and forecasts. But, like any reporting tool, integrated analytics are only as good as the quality of the information they rely on.
Best-in-class manufacturers know the effectiveness of manufacturing processes is driven by a clear understanding of the overall business purpose, coupled with proactive metrics which are designed to optimise process efficiency and minimise waste and re-work. A good mixture of leading and lagging metrics is required to drive both high quality and high predictability of output.
Manufacturers who haven’t defined metrics from their purpose tend to have more frequent production stops (maintenance outages, stock-outs), higher levels of re-work and defect rectification, and lower levels of productivity and quality compared to purpose-driven manufacturers.
The problem: when measures define your purpose
Columbus was recently contracted to implement an ERP system into a specialised vehicle manufacturer, who’s overarching production KPI was the ability to produce twenty-five vehicles per day.
The manufacturer reported that they had poor process adherence and high levels of re-work. They believed that the ERP system would standardise their processes and improve operational efficiencies and performance.
From walking the floor and analysing production processes it was apparent that this measure was the cause of the poor process adherence and high levels of re-work. Twenty-five vehicles were, on average, produced per day but at the cost of quality and consistency.
Vehicles were being pushed out the door so that they could be reported as complete. However, many contained missing items or had known faults and hence had to be re-worked before delivery.
It was also clear that a new ERP system wouldn’t solve this issue, but conversely, low process consistency would be more likely to reduce the ERP project success. By delivering against the metric, processes were worked around rather than followed. As ERP systems are predicated on processes, organisations that work around processes tend to heavily customise their ERP systems to reflect their actual ways of working. Heavily customised ERP systems are complex and difficult to understand, leading to low user adoption, value realisation and, in the long-run, technical debt.
In this example the metric; 25 vehicles per day, had created an unwanted method; pushing vehicles out the door so that they could be reported as complete. This, in turn, had defined their purpose for them; meet production targets, manage re-work queues and keep the target happy.
More about how they solved this problem later...
When your purpose defines your measures
Contrast the above example with Jaguar Land Rover. The company has integrated sustainability into its core purpose, driving initiatives that reduce carbon footprints across its production lines.
By measuring success through environmental impact metrics alongside traditional quality measures a car manufacturer must deliver on, Jaguar Land Rover ensures that it maintains high standards while fulfilling its commitment to sustainability.
Aligning your metrics with your purpose
Reports are driven by top-down requirements for measures of business success. As we saw in the example above, the risk is that these measures, if unaligned to the business purpose, create undesirable behaviors downstream. Your people may be fulfilling the metric, however the work required to deliver the metric may not be the most effective or efficient way of managing production.
In driving towards higher efficiency, it’s important to differentiate between what’s value-add work and what isn’t value-add work. Typically, a very large percentage of work is from non-value-add failure demand; the capacity you lose from not getting the product right the first time. A key question is: “are your metrics tracking the achievement of purpose or are they merely tracking the achievement of activity?”
To differentiate between value-add and non-value-add, think of your customer. What steps or processes deliver value to the customer? Your customer in this case is both external and internal, e.g. are your warehouse team delivering parts on time and in-full to production or are they just fulfilling orders when possible? If it’s the latter, then what’s the reason for this and how can we fix it? Identify problems throughout the value chain, make the necessary changes and introduce metrics which are going to sustain the new behaviours.
Adopt a systems-thinking approach
To shift organisational metrics effectively, businesses must rethink traditional management styles and adopt a systems-thinking approach. Instead of relying on rigid, top-down control, systems thinking focuses on how work flows through the system and how it impacts customers.
Here's how to adjust metrics in an organisation:
1. Define purpose from the customer's viewpoint:
Organisations should clearly articulate their purpose based on what customers need and expect, ensuring that all internal activities contribute to delivering value. Start by gathering comprehensive customer insights through market research, feedback analysis, and advanced analytics tools. This step sounds obvious, but in our experience, we find that customer value is often forgotten or assumed - it should be determined after a thorough analysis.
Then create or revisit a clear, customer-centric purpose statement that addresses specific unmet needs, aligning internal activities and metrics to this purpose while engaging employees in the process. Finally, implement and monitor these changes, and be sure to regularly review and refine metrics to reflect evolving customer preferences and market conditions.
2. Analyse how value flows to differentiate useful vs. problematic work:
Reducing unnecessary work leads to greater efficiency and better customer experiences, and happier employees. Examine manufacturing data and baseline what percentage of work is currently value-add and what percentage is failure demand work. Agree stretch targets for the change you want to see in these metrics.
- Value-adding work: Tasks that genuinely fulfil customer needs,... whether those be internal or external.
- Failure work: Extra effort caused by mistakes, inefficiencies, or service shortcomings.
3. Examine workflow to remove barriers:
Analyse the manufacturing value chain to identify where both value-add and failure demand activity is most likely to occur. By mapping out how work moves through the system, inefficiencies, delays, and redundant steps can be identified and addressed.
4. Develop new performance measures tied to purpose:
Instead of focusing on isolated targets, organisations should implement measures that provide real-time feedback on whether they’re achieving their core purpose: value delivery end-to-end.
5. Pilot, learn, and improve:
Trial new metrics on a small scale, gather insights, and refine them before implementing across the organisation. Don’t be afraid to fail, but adopt a fail-fast approach, limit your trials to small batch quantities or a smaller sub-BOM of an item of capital equipment.
6. Involve leadership and staff in the process:
Ensuring everyone understands the reasoning behind the new metrics helps create a culture of ongoing learning and improvement. Assess the rules and structures in place; internal policies, procedures, and performance measurements shape how employees behave. Many traditional targets and productivity measures unintentionally lead to poor outcomes by encouraging the wrong behaviours. In all business development it’s important to engage key stakeholders, those who will be ambassadors in the process. Engaged employees are almost by definition happier and more productive.
7. Engage organisational change management:
Organisational change management helps embed these news ways of working. Leadership should act as ambassadors for the changes and be comfortable that it will take time for these to embed.
When measures define your purpose: so, what’s the solution?
Meanwhile, back at our specialised vehicle manufacturer, they were still producing vehicles that required a high level of re-work. Effectively the business was drowning in failure demand activity.
By changing the purpose to “build vehicles right the first time” the manufacturer was able to align their metrics to support their purpose. Twenty-five vehicles per day became “measure the end-to-end time to build vehicles right the first time” and “measure the number of vehicles that are produced right the first time”. This in turn changed their existing method to a more desirable one: “Find and act on causes of problems that are impacting our purpose”.
The case for purpose-driven manufacturing
The contrast between starting with business purpose versus starting with methods highlights a crucial insight for manufacturers; aligning operations with strategic goals leads to superior product quality and customer satisfaction. By adopting a systems-thinking approach, organisations can ensure that their manufacturing processes are not only efficient but also capable of delivering high-quality products that resonate with their customers' needs.
In an era where consumer expectations are higher than ever, manufacturers must prioritise purpose-driven strategies to remain competitive and relevant in the marketplace. Embracing this approach will not only enhance product quality but also foster innovation and resilience in any manufacturing organisation.
