There are literally hundreds of metrics that business leaders

can use to run their business today. Some are very valuable,
some not so much. For Engineering, think of an engineer as a
continually developing employee who will take years, if not
decades, to become fully trained and proficient in a field of
study. So the focus of metrics should not only be in
performing a task on time and within budget, but also
developing said engineer through training and daily
challenges.

Listed below are 5 areas of metrics you should consider for

your engineering department. Why 5 metrics? Why not 3, or
2, or 20? There’s not a right answer here, but the metrics you
measure should say something about your business and what
stage your company is in. The right number of metrics is the
number you LOOK AT! Companies spend gobs of money
collecting numbers and data they will never see! The saying is
“What’s measured, get’s managed”, a reverse to that could be
“Don’t measure what you don’t manage”…if it’s not important
to you to run your day to day department or company, then
why measure it? Each business is unique, use the information
below as a starting point and if you have no metrics, my advice
would be to pick one, start there, and add more as needed. As
long as you are continually looking at the data collected and
making adjustments, you can do no wrong.

I’m also a strong believer in ever changing metrics. Your

business and customers change month to month, year to year,
so should what you measure from your employees. A stale
metric becomes one no one looks at and wasted time spent
collecting…keep them fresh! A benefit of this is if you happen
to choose the wrong metric. Say you measure quality but that
has a negative effect on your on time delivery, then you can
change it. Changing metrics keeps employees on their toes.
The first three metrics listed below are what I call “general
metrics”, these are elements that you should measure but how
you measure and what you measure will vary depending on
your company and the role engineering plays. The last two are
more specific, but I consider them fundamentally important
(engineering or other).

Process Metrics

These have to do with the daily processes and what could be

called “Value Added Time” that your engineers spend on
task. For those not involved with “Lean” this would be any
task that contributes towards the bottom line, or for an
engineer, if you bill for a task then it could be considered Value
Added. Remember, you don’t bill for Engineering changes,
Revisions, or Paperwork (outside of some reports).

Some examples of process style metrics to measure:

• Estimation Accuracy
• Scope Variance
• Schedule Variance
• Productivity (hrs worked vs. hrs billed)
• Order processing time
• Response time to RFQ
• Product development Cycle time
• Product development cost
• On time delivery
Quality Metrics

Quality metrics are pretty easy to discern, anything that

relates to the quality of the product coming out of Engineering
or the quality of information going in. Remember, no matter
what your operation is you are shooting for 100% First time
success. Many will say “this is impossible in our industry”, it
may be tough to achieve but that doesn’t mean it shouldn’t be
the goal. Engineering departments and companies become
very comfortable with accepting less than perfect results. No
doubt, there’s often more variables in Engineering’s success
that clouds that “perfect” result, but we should strive for it
none the less.

Some examples of quality style metrics:

• Number of Engineering changes

• Number of revisions (Depending on your business,
revisions could be a bad thing)
• First pass yield
• Six Sigma for Engineering
• Customer satisfaction (Engineering’s customer, not end
user)
• Supplier defect rate (often the supplier is whoever is
supplying specs and info to Engineering)

Technical Metrics

This is a big one that is often ignored. Computers and

software are just as critical to Engineering as a CNC machine is
to your production capability. I’ve seen companies that invest
heavily in IT and those that do not, when it comes to
Engineering those that don’t, suffer. Think of Engineering as
another equipment operator on your production floor (albeit a
highly paid one) and any minute that he or she has to wait for
a computer to load, an analysis to run, or a model to refresh is
costing the company money. Hold your IT to the same level as
your Industrial Maintenance person and use metrics to
determine if computer downtime is costing you money or
causing a bottleneck.

Some examples of IT Metrics:

• Computer/Software Uptime
• Preventative Maintenance
• % of files managed by a PDM software

People Metrics

As you make these investments in process, quality, and

technical improvements you need to keep your
Engineers/Designers engaged and employed at YOUR
company. Turnover rate and Absenteeism will tell you all you
need to know. Frequently absent or sick employees, typically
do not enjoy his/her job and that employee leaving in the next
few months is a high possibility. What’s worse is those that
don’t leave, but instead become a cancer upon your
organization, until you take action.

Watch turnover rate as well, a lot of dollars in training and

knowledge is lost when an engineer decides to go
elsewhere. The cost to replace a technical employee such as
an engineer could be as much as 1.5 times their annual
salary2…Ouch!

Skills Matrix

On the other side of the spectrum, a happy Engineer without

training and development has equally negative effects. A field
like engineering revolves around technical software and
scientific information, there are always new things to
learn. Look into developing a skills matrix and training
budget, as well as training days that engineers use to sharpen
their skills. If you haven’t seen a skills matrix, google will help,
just list every skill you could possibly like that engineer to
have and then make the chart public. Hidden charts offers no
challenge, and employees often have an area they think they
are skilled in, when you feel differently. If you do a skills chart
and find that your employees are highly qualified in each
skill…then you probably don’t have the right skills listed.

I hope you this information helps you and your organization

become engaged with metrics, it’s a great place to go when you
have a problem that you’re not sure how to solve. Typically,
when you measure that problem area, it magically starts to fix
itself! Rye Design offers Engineer training and organizational
help, if we could be of assistance in these areas, let us know.