Business is a team sport. Everyone in business would like to work more collaboratively and give other people more lead time to help them have a better outcome.
But what often happens is each department speaks a different language. Having the right metrics at the right time for the right person is imperative to the overall success of a business.
Imagine if each of your departments were able to better communicate with each other and began speaking the same data language. It would be game-changing.
On its surface, increasing labor efficiency and worker productivity may seem like an operations-only endeavor; however, if you look closer, you’ll see the cross-functional ecosystem required.
That’s why today, we are going to dive into the advantages of cross-functional metrics, and how departments can better collaborate and communicate with each other for better business outcomes.
The Advantages of Cross-Functional Insight
Imagine everyone in your organization has a metric. Operations is focusing on cost per unit. HR is focusing on time to fill and turnover. Sales is focusing on units sold. Finance is focusing on revenue and margin.
Each department is asked to track their metric, look at trends and manage key influencers. Not only are they responsible for that metric, they are responsible for stating if that number is feasible and achievable. Because, it’s not only important to track your metrics, it is important to understand why or why not you are hitting your goal and make changes for the future to positively impact that metric.
What this does for your business is creates focus. It allows each department to focus on the one area and takes those results to other departments to eventually make cross-functional changes through collaboration and communication.
Areas of Focus by Department
- Operations: Hitting production goals
- HR: Having enough people working on each line
- Sales: Hitting sales goals and creating happy customers
- Finance: Hitting revenue goals and staying on budget
What do each of these have in common? They all require cross-functional collaboration and communication to achieve.
Think back to our frozen pizza manufacturing example [LINK]. If your job is to make pizzas as efficiently as possible, that is the responsibility of operations. But there are ways that operations can collaborate with departments like HR, sales and finance to make operations run more smoothly.
- How quickly is your team producing your units?
- How well is your team performing?
- Where is labor deployed? Where do you need more labor deployed?
- Who needs coaching/help?
When answering these questions, think about how you can impact other departments as well. Letting sales know that production is down, and efficiency has decreased, allows sales to set proper expectations for customers. Understanding where you are under your headcount budget, allows you to tell HR “Hey, I need more people on Line 5 to hit our production goals.”
But operations couldn’t operate if they didn’t have people! HR has a very important role in cross-functional metrics. Without HR, operations wouldn’t be able to fill the right positions, or have much insight into trends in overtime and turnover.
HR must focus on metrics like:
- Time to fill: Having enough people to do the work is imperative for successful and efficient operations. Quality talent acquisition is impacted by
- Best sources for talent
- The lead time necessary
- Turnover & retention
- Time to train
- Headcount: Monitoring daily headcount to make sure you have enough people
- Hiring additional headcount to ensure 100%
- Overtime: Monitoring overtime and hiring when overtime is exceeding FTE thresholds
- Allows you to better manage burnout
- # of Consecutive Days Worked
- Leads to managing burnout
- Prevents turnover
- Prevents injury
Each of these metrics helps operations and finance. Ensuring that you are on your headcount budget is on target allows operations to hit their production goals. Without headcount, units produced could be drastically affected. Additionally, your labor and overtime budget is crucial to your finance team’s revenue and margin goals.
For sales to work cross-functionally, it is important to communicate with operations about production scheduling and expected production completion dates. Sales must make sure that the right inventory is available at the right time.
It is also important for sales to communicate to operations when products are selling faster or slower than expected so they can adjust production schedules accordingly. If one product is especially hot, it is important for operations to know in advance so they can properly meet SLAs and invoices. This would allow for operations to properly staff, schedule and plan for the increased need for production.
Finance & Accounting
Labor efficiency directly impacts cost accounting in understanding if your per unit costs are up or down. This could mean the difference between profitability and profit loss. Finance and accounting must be able to see which budgets are above or below target, and notify other departments like operations, HR and sales if they are getting close to exceeding those budgets.
Finance must be able to tell if the business is financially healthy from a revenue, production, per customer and per product point of view. If given the right tools, it should be easy for finance to notify other departments of budget and finance discrepancies.
The Power of Cross-Functional Collaboration with analytic.li
As you can see, it is up to every department to collaborate and communicate their metrics to each other to ensure positive results. But collaboration is hard. Even though business is a team sport every function has their own:
For example, it would be like showing up to play basketball and operations has a baseball bat, sales has a tennis racket, HR has a soccer ball and finance & accounting has a football and cleats. Without each of the players having the right equipment, speaking the same language and following the same process, it is hard to play together.
Now think about each of these areas in terms of labor efficiency and productivity.
Labor Efficiency and productivity can be driven positively when:
- 1. Data is all in one model
- HR: Labor, payroll & timekeeping data
- Operations: Production data
- Sales: Sales data
- Finance & Accounting: Revenue & budget data
- 2. Data speaks the same language
- HR says departments... while operations says lines
- HR says locations and means cost centers… while operations says locations and means physical locations
- Operations: Finds out well in advance which products are being sold
- HR: Gets notified to hire another FTE when OT is high
- Sales: Quickly knows future inventory levels
- Finance & Accounting: Monitors profitability and ensures budgets are on track
With analytic.li, cross-functional collaboration is a no-brainer. We enable it by data aggregation, speed, focus, alerts and advice.
- Data Aggregation: Which means bringing together data from disparate systems like operations, sales and HR
- Speed: Which means increasing data refresh cycles to allow for faster action
- Focus: Which means simplifying complex analysis to enable more users
- Alerts: Which means providing notifications to users within the decision-making window
That’s Why We’re Here
At analytic.li, we uniquely understand the need for manufacturers and distributors to collaborate cross-functionally. After all, that is the foundation of labor efficiency and productivity.
With our first-ever, cross-functional labor efficiency and worker productivity platform we break down data barriers and organizational barriers to set up operations managers for success. This means businesses can arm their leaders with real-time insights by alerting leaders in all departments of staffing shortages, labor overages, and productivity trends to better manage their organizations.
If you’d like to learn more about ways to collaborate cross-functionally with data or discuss how analytic.li will work for your organization, reach out to us. We’re eager to connect with you. If now is not the time to consider new software but you liked what you read here, subscribe to our blog below.