What Are Metrics?

Metrics are measures of quantitative assessment commonly used for assessing, comparing, and tracking performance or production. Generally, a group of metrics will typically be used to build a dashboard that management or analysts review on a regular basis to maintain performance assessments, opinions, and business strategies. 

Understanding Metrics

Metrics have been used in accounting, operations, and performance analysis throughout history.

Executives use them to analyze corporate finance and operational strategies. Analysts use them to form opinions and investment recommendations. Portfolio managers use metrics to guide their investing portfolios. Furthermore, project managers also find them essential in leading and managing strategic projects of all kinds.

Overall, metrics refer to a wide variety of data points generated from a multitude of methods. Best practices across industries have created a common set of comprehensive metrics used in ongoing evaluations. However, individual cases and scenarios typically guide the choice of metrics used.

Choosing Metrics

Every business executive, analyst, portfolio manager, and the project manager has a range of data sources available to them for building and structuring their own metric analysis. This can potentially make it difficult to choose the best metrics needed for important assessments and evaluations. Generally, managers seek to build a dashboard of what has come to be known as key performance indicators (KPIs).

In order to establish a useful metric, a manager must first assess its goals. From there, it is important to find the best outputs that measure the activities related to these goals. A final step is also setting goals and targets for KPI metrics that are integrated with business decisions.

Academics and corporate researchers have defined many industry metrics and methods that can help shape the building of KPIs and other metric dashboards. An entire decision analysis method called applied information economics was developed by Douglas Hubbard for analyzing metrics in a variety of business applications. Other popular decision analysis methods include cost-benefit analysis, forecasting, and Monte Carlo simulation.

Several businesses have also popularized certain methods that have become industry standards in many sectors. DuPont began using metrics to better their own business and in the process came up with the popular DuPont analysis which closely isolates variables involved in the return on equity (ROE) metric. GE has also commissioned a set of metrics known as Six Sigma that are commonly used today, with metrics tracked in six key areas: critical to quality; defects; process capability; variation; stable operations; and, design for Six Sigma.

Examples of Metrics

While there are a wide range of metrics, below are some commonly used tools:

Economic Metrics

Operational Company Metrics

From a comprehensive perspective, executives, industry analysts, and individual investors often look at key operational performance measures of a company, all from different perspectives. Some top-level operational metrics include measures derived from the analysis of a company’s financial statements. Key financial statement metrics include sales, earnings before interest and tax (EBIT), net income, earnings per share, margins, efficiency ratios, liquidity ratios, leverage ratios, and rates of return. Each of these metrics provides a different insight into the operational efficiency of a company.

Executives use these operational metrics to make corporate decisions involving costs, labor, financing, and investing. Executives and analysts also build complex financial models to identify future growth and value prospects, integrating both economic and operational metric forecasts.

There are several metrics that are key to comparing the financial position of companies against their competitors or the market overall. Two of these key comparable metrics, which are based on market value, include price-to-earnings ratio and price-to-book ratio.

Portfolio Management

Portfolio managers use metrics to identify investing allocations in a portfolio. All types of metrics are also used for analyzing and investing in securities that fit a specific portfolio strategy. For example, environmental, social and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.

Project Management Metrics

In project management, metrics are essential in measuring project progression, output targets, and overall project success. Some of the areas where metric analysis is often needed include resources, cost, time, scope, quality, safety, and actions. Project managers have the responsibility to choose metrics that provide the best analysis and directional insight for a project. Metrics are followed in order to measure the overall progression, production, and performance.

What Is 3D Printing?

Three-dimensional (3D) printing is an additive manufacturing process that creates a physical object from a digital design. The process works by laying down thin layers of material in the form of liquid or powdered plastic, metal or cement, and then fusing the layers together.

Understanding 3D Printing

Since it was introduced, 3D printing technology has already increased manufacturing productivity. In the long-term, it has the potential to massively disrupt both the manufacturing, logistics, and inventory management industries, especially if it can be successfully incorporated into mass production processes.

Currently, 3D printing speeds are too slow to be used in mass production. However, the technology has been used to reduce the lead time in the development of prototypes of parts and devices, and the tooling needed to make them. This is hugely beneficial to small-scale manufacturers because it reduces their costs and the time to market, that is, the amount of time from a product being conceived until its being available for sale.

3D printing can create intricate and complex shapes using less material than subtractive manufacturing processes, such as drilling, welding, injection molding, and other processes. Making prototypes faster, easier, and cheaper allows for more innovation, experimentation, and product-based startups.

Industrial Uses

Car and aircraft manufacturers have taken the lead in 3D manufacturing, using the technology to transform unibody and fuselage design and production, and powertrain design and production. Boeing is using 3D-printed titanium parts in the construction of its 787 Dreamliner airliner. In 2017, General Electric created a helicopter engine with 16 parts instead of 900–an indication of how big an impact 3D printing could potentially have on supply chains.

In medical sciences, 3D printing is being used to customize implants. In the future, organs and body parts may be created using 3D printing techniques. In the fashion world, Nike, Adidas, and New Balance are using 3D printing to create their shoes. In the construction industry, companies around the world are making breakthroughs in 3D printing of the materials need to build homes. Using layers of concrete, homes can be built in 24 hours, which are stronger than regular cinder blocks and cost a fraction of the price.

In the manufacturing of hearing aids, 3D printing is now customary. The use of 3D printing accelerates the process of manufacturing and enables manufacturers to make custom hearing aids. Audiologists can use 3D scanners to create a custom prototype using reference points from the scan. Manufacturers can feed the scan into a 3D printing machine and after fine-tuning the materials and the ear shapes, print the entire hearing aids.