No more confusion between metrics and analytics
In simple terms, METRICS are a method of measuring something or the results obtained from doing so. Metrics represent the values of what you’re measuring. When applied to business, the most important metrics —the indicators of business performance—are called key performance indicators (KPIs); it’s a widely understood term that’s been used for decades. Companies can apply KPIs to all areas and levels of the business.
For example, at the highest level, they may include:
- Profit margin
- Return of investment (ROI)
- Free cash flow
- Working capital
- Environment, health, and safety (EHS)
At the plant level we usually see:
- Energy intensity
- On-time delivery
And at the asset performance level, companies may have:
- Planned downtime
- Unplanned downtime
- Overall equipment effectiveness (OEE)
ANALYTICS can be defined as the discovery, interpretation, and communication of meaningful patterns in data and applying those patterns toward effective decision-making. When we consider the LNS Research framework for analytics, we see that metrics are primarily descriptive in nature. That is, they describe what happened in the past or what’s happening now. Inspecting metrics may shed light on the diagnostic side but lacks an explicit explanation of the “why,” or reasons behind them.