5.4.5. Value Chain Success Metrics
💡 First Principle: Each value chain activity has key success metrics — measures of whether it's actually achieving its purpose — because an activity you can't measure is an activity you can't improve, and measurement closes the loop back to continual improvement.
Each value chain activity is associated with key success metrics that indicate whether it's fulfilling its purpose and contributing to value. These metrics let the organization see where the value chain is performing well and where it needs attention, feeding directly into continual improvement. The specific metrics differ by activity (for example, an operational activity might track reliability or incident resolution, while a build activity might track lead time or change success rate), but the principle is constant: measure each activity against its purpose.
⚠️ Exam Trap: Success metrics are tied to each activity's purpose — they're not generic organization-wide KPIs. The point is measuring whether each activity achieves what it exists to do, which is what makes targeted improvement possible.
Reflection Question: Why must a value chain activity's success metric relate to its specific purpose rather than to overall organizational profit?
