Running head: METRICS AND ANALYTICS

Metrics and Analytics

Southern New Hampshire University

05/01/17
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Metrics and Analytics

Operational managers must use a combination of Metrics and analytics when
maintaining and when making important decisions regarding the current and future state
of an organization.

Chosen Metrics

What are the most important metrics for operations managers?

Hours worked per process Sales revenue
Inventory size Customer loyalty and retention
Variable cost percentage overhead cost Cost of customer acquisition
Monthly profit or loss Operating productivity
Size of the gross margin Overhead costs
(Zwilling, 2011)
List at least three metrics that you feel are important. You will need to define each
of the metrics.

Sales revenue Sales revenue is important to any

Customer loyalty and retention
Operating productivity
organization, not only for the obvious
reason which is profit.
From an operational standpoint sales
data should be pulled from various data
supporting sales such as price changes,
competitive actions, and cost of sales.
Looking at the metrics mentioned as
well as others such as turnover ratio,
return on sales, and return on assets will
aid any operations manager in making
accurate decisions towards the
organizations future plans.
Customer loyalty and retention is
important to an organization for the
reason being customers are the source
of revenue.
There are ways in which an
organization can measure customer
retention and satisfaction.
Direct feedback, customer surveys, and
purchase analysis are some tools to use
for feedback.
Operating productivity is important for
the reason any organizational manager
wants to assure the business is being
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run as efficiently as possible at all

times.
Productivity can be measured by using
industry statistics, and by checking
productivity statistics within the
organization over time.
(Zwilling, 2011)

Do any of the metrics support the triple bottom line?

The metrics chosen do support the economic and t environmental and social aspects of
the triple bottom line.
 Customer retention and loyalty supports the social aspect of the bottom line.
 Operational productivity supports the environmental aspect of the bottom line as
if production is being operating efficiently there will be a reduction in waste
which is good for the environment.
 Sales revenue supports the economic aspect of the bottom line.
Financial Performance

Describe how each of the metrics you listed under the “chosen metrics” section
supports the financial performance of the organization.

 Customer retention will support the financial performance of the organization by

continuing to bring in revenue. Satisfied customers will not only continue to use
the services or product being sold, they may also bring in additional customers.
 Operational productivity will support the financial performance of the
organization by reducing waste, which saves money. This aspect will also
contribute by utilizing time management of production appropriately which will
save in unnecessary wage expenses.
 Sales revenue will support the financial performance of the organization by allow
the business to continue to function through sales.

Data

What data would you need to collect for each of the metrics you chose?

 Sales revenue would require looking at sales information both present and past to
determine the organizations current state.
 Customer retention and satisfaction would require feedback from customers
through direct feedback, surveys, and by comparing customer satisfaction of the
organization with its competitors.
 Operational productivity would require Productivity can be measured by using
industry statistics, and by checking productivity statistics within the organization
over time.
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Also,

You need to discuss how you would make sure that the data are of sufficient quality.

There should be plans in place to assure the data is accurate and cannot be manipulated.
Plans should include only allowing specific people to have access to information being
used for analysis.

Data Analytics

You will need to describe how data analytics support the metrics that you chose.
What is analytics?
Analytics where operations management is concerned is the idea of focusing on trying to
improve operations which are already established. This process is completed by utilizing
various tools to gather the information needed in order to come up with an effective
business plan. ("What is Operational Analytics? - Definition from Techopedia", 2017)
Why is it important?
Analytics in operations management supports the concept of business resource planning.
Having an effective business plan is imperative to any organization for the reason that it
will save money, improve collaboration, improve productivity, and improve inventory
and production management, and last but not least keep the customer satisfied. ("Why
ERP Systems are Important - Why Use an ERP", 2015)
Does it help support the triple bottom line?
The triple bottom line can serve as sustainability metric. Economy, equity, and
environment must not only be equally represented, but should be an essential part of the
plan.

A combination of many metrics are used when determining the current and future state
of an organization. Utilizing sales revenue, customer retention, and operational
productivity are just three of the many metrics which could be used during this process.
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References

What is Operational Analytics? - Definition from Techopedia. (2017). Techopedia.com.

Retrieved 1 May 2017, from
https://www.techopedia.com/definition/29495/operational-analytics

Why ERP Systems are Important - Why Use an ERP. (2015). SelectHub. Retrieved 1 May
2017, from https://selecthub.com/enterprise-resource-planning/why-erp-systems-
are-important/

Zwilling, M. (2011). Forbes Welcome. Forbes.com. Retrieved 1 May 2017, from

https://www.forbes.com/sites/martinzwilling/2011/09/28/10-metrics-every-
growing-business-must-keep-an-eye-on/2/#76b5918628b8