Page 121 - Performance Leadership

110 • Part II Operational and Analytical Dimensions

F igur e 7.5
Business Interface between Manufacturing and Logistics

Manufacturing Logistics
Business domain metrics: Business domain metrics:
• % Use production lines • Distribution costs per unit
• % Uptime • % Use capacity
• % First time right • % Optimized route plan
• % Variance act/ bud. production • % Own capacity / external cap

• Average storage time
• Number of units stored

Business Interface

IT Development and IT Operations

Most IT departments consist largely of two parts. There is an IT devel-
opment organization that implements IT applications, either packaged
or customized, and there is an IT operations department that runs the
systems on a daily basis. Both departments tend to have a different busi-
ness model, a different culture, and a different set of best practices. It
is the task of the chief information officer (CIO) to manage these two
departments and the supporting staff.
The business model of the IT development department is project-
based. The staff, made up of either internal employees or external con-
sultants, go from assignment to assignment, implementing different
systems or updating existing ones. On a project-by-project basis, the IT
development organization uses various metrics to monitor productiv-
ity, quality, and control costs. Productivity can be measured by calcu-
lating the function points (FPs) per developer. (A function point is a
unit of size in IT that helps in estimating the scale and complexity of
an implementation project: the more function points, the bigger and
more complex the project.) Quality can be measured by tracking the
number of bugs discovered during testing, or the amount of rework dur-
ing development, testing, and postimplementation. Cost control can