4.8 Conclusion

Good measurement is one of the cornerstones to success—in both our professional and personal lives. Good measurement helps us understand the world around us, including the processes that create value and the decisions our key stakeholders make. It also encourages the right behaviors and enables us to communicate more clearly and powerfully. But, really good measurement practice is hard to do. So, it is rare—and thus valuable. You need to make the design of a top-notch measurement and reward system a priority.

Logistics measurements are generally useful for driving and measuring day-to-day behaviors. But to communicate with top management, we need to speak the language of finance. That means we need to translate what we do to measures like profit impact and ROA. The profit leverage effect and strategic profit model can help us do that.

As we conclude, we should make one point clear: Throughout this chapter, we have emphasized the importance of clear, quantitative measures. You need clear measures when you are dealing with things that can be quantified, like money, delivery days, inventory turns, and so on. But, Albert Einstein once warned, "Not everything that counts can be counted, and not everything that can be counted counts." 1 This maxim is not an excuse to ignore measurement of important, measurable issues, such as shipping costs or damage rates. It is a reminder that there may be additional factors that should be considered, such as the potential impact of late shipments on customer goodwill. You need to remember this fact in your own lives as well. Many important factors that affect your health and happiness are not quantifiably measurable, but they are nonetheless immeasurably valuable.