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CHAPTER 3: MEASUREMENT
TYPES OF MEASURES
Central to benchmarking is measurement. Measurement
provides an objective way to gauge performance and to identify
best performances. In the case of customer-driven benchmarking,
you need to apply a set of measures in order to assess how well
you address customer desires and satisfaction. If you are not
measuring, then you cannot possibly be doing benchmarking,
and if you are not applying measures oriented toward how well
you are serving your customers, then you are not doing
customer-driven benchmarking.
During the last several decades, a system of classifying measures
has evolved that helps to focus on customers. In the 1960s and
1970s, most attempts to develop performance management
systems, including traditional maintenance management
systems, focused on two types of measures: outputs and inputs.
These measures are defined as follows.
Outputs
Outputs are a measure of production or accomplishment. In
highway maintenance, examples of output measures are lane
miles of roadway surfaced, the number of bags of litter picked
up, and the number of acres mowed.
Inputs
Inputs are the resources used to deliver a product or service,
perform an activity, or undertake a business process. In
highway maintenance, the inputs consist of labor, equipment,
and materials. The funds needed to pay for these resources may
also be considered an input. Under certain circumstances, other
productive resources--such as land, water, or air--can be treated
as an input.
As illustrated in Figure 5, maintenance agencies focused on
measures of productivity use these measures by looking at the
ratio of output to various types of inputs. One could measure
output per labor hour, per equipment dollar, per quantity of
material used, or per dollar of expenditure. One might also
examine unit costs expressed as the cost per unit of output.
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Chapter 3: Measurement
Figure 5. Product and Service Delivery Processes
The trouble with input and output measures is that they are
internally focused on the work maintenance personnel do. They
are not externally focused on customers.
More recently, especially since the enactment of the Government
Performance and Results Act of 1993, the focus has been
increasingly on outcomes.
Outcomes
Outcomes are the results, effects, or changes that occur due to
delivering a product or service, conducting an activity, or
carrying out a business process. For example, an outcome of
pavement resurfacing might be smoother pavement. An outcome
of litter pickup might be cleaner roadsides, and the outcomes of
mowing might be increased sight distance at intersections and
around curves and, consequently, reduced accidents.
Outcomes are more likely to be externally focused and frequently
relate to customer preferences, expectations, and satisfaction. By
looking at the ratio of outcomes relative to inputs, one can
address the effectiveness of a program in addressing customer-
oriented results. Typical measures might be an outcome per labor
hour, per equipment hour, or per dollar of expenditure.
One might also examine cost effectiveness, which is the cost per
unit of outcome achieved. Figure 4 illustrates that as one
transitions from using output measures to outcome measures,
the emphasis shifts from productivity to effectiveness.
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Some agencies have gone one step further and identified another
set of measures: value added.
Value Added
Value-added measures are customer-oriented outcome
measures expressed in terms of the value received by the
customer. Measures of value added include an increase in
customer satisfaction or an increase in economic value from, for
example, travel time saved or life-cycle costs avoided.
As one transitions from a focus on outcomes to value added, the Customer-driven
perspective shifts from effectiveness to the net value added to the benchmarking is like a stool
customer and provides the basis for resource allocation in that rests on four types of
economic terms. measures
Four Types of Measures for Customer-Driven Benchmarking
In customer-driven benchmarking, use measures similar in type
to the ones described above. However, the project team suggests
you think about four types of measures:
1. Outcomes--the customer-oriented outcome or value-
added measures as defined above.
2. Resources--the same as the inputs defined above (e.g.,
labor, equipment, materials, and funding).
Hardship
3. Outputs--measures of levels of production or Factors
Inputs
accomplishment.
Outputs
4. Hardship Factors--factors outside the control of the Outcomes
maintenance organization such as weather and terrain that
influence the outcomes and level of resources used.
Relationship of Outcomes, Resources, and Hardship Factors
In the spirit of sound economic analysis, customer-driven
benchmarking takes the approach that some overall picture of
outcomes relative to some overall picture of the resources
expended, while adjusting for factors outside the control of a
maintenance organization, is the proper way to assess
performance. There is no attempt to combine outcomes into a
single measure of benefits, which would require converting all
benefits into dollar terms or applying appropriate weights to
each outcome in order to construct an overall performance index.
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