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Are Your KPIs Helping You to Perform? ...
Are Your KPIs Helping You to Perform?
When it comes to Key Performance Indicators (KPIs), many terms are used
to describe similar things. A recent ARC survey captured the types of KPIs
currently used at four levels of manufacturing management: Operator, Supervisor,
Plant/Mill Manager, or C-Level. The survey found that the
majority of Operator-level KPIs are translations of the higher level business
performance objectives to which upper-level management
is held. While these KPIs are not always
directly related to financial performance, they have
a definite effect on the financial outcome. If KPI
targets are not directly tied to financial performance,
how can plant personnel be sure their
decisions are increasing corporate performance factors
such as profit? Conversely, many commonly
used KPIs appear to be driving counterproductive
The majority of Operating level KPIs
reported in ARC’s recent RPM survey
reflect translations of higher level
business performance objectives.
If KPI targets are not directly tied to
financial performance, how can plant
personnel be sure their decisions are
fueling corporate performance metrics
such as profitability?