The best measures that should be captured and reported to managers relate to corporate strategy and are SMART: specific, measurable, actionable, relevant, and timely. Below are examples of poorly constructed performance measures for each of these. For each component of SMART, provide two better measures than those provided. SMART Process Measured Poor Measure Specific Production Number of defects Defect rate each day. Measurable Inventory Errors made Actionable Division A Profit margin #2 Relevant Sales Earnings per share #1 #2 Timely Production Last year's defect rate: #1 #2 Better measures Number of orders taken. Segment margin for month. Machine breakdown each day. Number of Inventory items not recorded on receiving report. Number of Inventory items delivered to incorrect production area. Total sales dollars generated per salesperson. Number of defects found in quality control process. Number of defects produced per machine. Contribution margin for quarter.