Key Performance Indicators - KPI’s Training Pack
<ul><li>Target Audience   :  Site Management to Team Leaders  </li></ul><ul><li>Purpose of Module : To ensure employees ha...
Key Performance Indicators <ul><li>Course Outline </li></ul><ul><li>INTRODUCTION </li></ul><ul><li>WHAT ARE KEY PERFORMANC...
<ul><li>Name </li></ul><ul><li>Department </li></ul><ul><li>Length of service </li></ul><ul><li>Knowledge of  </li></ul><u...
What are KPI’s Flip Chart
Key Performance Indicators <ul><li>TO COMMUNICATE STATUS - ACTUAL v TARGET </li></ul><ul><ul><ul><li>PLANT LEVEL </li></ul...
Key Performance Indicators ESSENTIAL <ul><li>IMPORTANT TO THE VIEWER </li></ul><ul><li>VITAL - AFFECTS THE BUSINESS </li><...
Key Performance Indicators USEFUL <ul><li>CURRENT - UP TO DATE </li></ul><ul><li>EASY TO UNDERSTAND </li></ul><ul><li>IMPO...
Key Performance Indicators <ul><li>URGENCY / OWNERSHIP </li></ul><ul><li>RESPONSIBILITIES DEFINED </li></ul><ul><li>DYNAMI...
Key Performance Indicators <ul><li>GROUP OF  METRICS </li></ul><ul><ul><ul><ul><li>NOT EVERYTHING WE MEASURE IS A KPI ! </...
Key Performance Indicators <ul><li>DYNAMIC </li></ul><ul><ul><ul><ul><ul><li>WELL MANAGED - ROTATE VITAL FEW </li></ul></u...
<ul><li>Safety Performance </li></ul><ul><li>Quality Performance </li></ul><ul><li>Cost Performance </li></ul><ul><li>Deli...
Examples Defects Per Assembly 0 100 200 300 400 500 600 Jul Sept Nov Jan Mar May Jul Sep Nov Machining Sub Assy  Assembly ...
Examples <ul><li>RED </li></ul><ul><ul><li>Outside of target with no improvement </li></ul></ul><ul><ul><li>or deteriorati...
Examples Scrap Cost 2004 0 2000 4000 6000 8000 10000 12000 14000 16000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC £ 0...
Examples Schedule  0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Stage 1 Stage 2 Stage 3 How are we doing against the plan? ...
Examples External Supply Schedule Adherence 0% 20% 40% 60% 80% 100% 23 24 25 26 27 28 29 30 31 32 33 Supplier 1 Supplier 3...
Examples WIP 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Nov 99 Jun 00 Sep 00 Oct 00 Nov 00 36951 37043 £ '000 0 0.5 1 ...
Examples
Examples
Performance Management Cascade  &  <ul><li>Step 1  -  Team Leaders manage the  Key Drivers of  performance </li></ul><ul><...
Performance Management Cascade  &  <ul><li>Step 4   -  Head of Business reviews Weekly Performance </li></ul><ul><li>Good ...
Performance Management Cascade  &  <ul><li>Step 6   -  Site Cost Performance consolidated. Manufacturing Director reviews ...
What KPI’s do you think would be applicable to your area Flip Chart
How to Create and Manage KPI’s  Identify Customers and Suppliers Form Improvement Teams Create Improvement Plan Train User...
How to Create and Manage KPI’s  Score & Prioritise KEY Performance Indicators Identify Customers and Suppliers Determine  ...
How to Create and Manage KPI’s  &  Score & Prioritise KEY Performance Indicators Ease of recording data Impact on business...
How to Create and Manage KPI’s  Identify Customers and Suppliers Form Team Determine  Performance Drivers Score & Prioriti...
Example  &
How to Create and Manage KPI’s  Identify Customers and Suppliers Form Team Determine  Performance Drivers Identify Owners ...
How to Create and Manage KPI’s  Identify Customers and Suppliers Create Improvement Plan Train Users Form Team Determine  ...
How to Create and Manage KPI’s  Create Improvement Plan Train Users Form Team Determine  Performance Drivers Identify Owne...
Typical KPI’s  KPI - examples Target <ul><ul><li>Quality </li></ul></ul><ul><ul><li>Defects </li></ul></ul><ul><ul><li>(De...
KPI’s  <ul><li>Direct relationship to business plan </li></ul><ul><li>Communicates progress against plan </li></ul><ul><li...
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KPI's Training Pack

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  • Airbus Production System Module: Workplace Management Element: KPI’s © Copyright Airbus UK Ltd 2002 All rights reserved. No part of this presentation may be reproduced in any form or by any means without the written permission of the copyright holder. Training Pack
  • Objectives:- To understand what a KPI is for To be able to interpret and ask questions using KPI’s To be able to get involved in creating and managing KPI’s
  • Start with the presenters then round the training room asking each delegate their name location and any knowledge of Lean they have. Presenters to give name, position and where they learnt about Lean, which company, which customers, what products. Emphasis that the Lean tools are aimed at the waste in any system. This ice breaker helps settle the group and get more participation latter.
  • Ask the group for their thoughts onKPI’s Use flip chart to capture the ideas the group has on KPI’s
  • Using flip chart What should KPI’s do for us? Are there different types of KPI? Who are they for?
  • Using flip chart What are bad examples of KPI’s ? Used for the wrong reasons . Not easy to understand . Not managed - out of date . Key point A bad or mis-managed KPI is worse than no KPI.
  • Using flip chart What would make a good KPI ? Any examples they have seen . What would they like to see?
  • Any others? Refer to original list on flip chart EG. Safety Non Right 1st Time Productivity OEE Cost of Quality etc…..
  • Good example
  • Not easy - think of examples where it does not work Needs Involvement Needs Ownership Needs Feedback Needs to drive improvement
  • Other examples
  • Other examples
  • Other examples
  • Other examples
  • Other examples
  • Other examples
  • The KPI’s are useless unless they are managed through a Performance Management Process Go through the 6 steps Step 1 Team leader data collection Step 2 Manager reviews data at daily meeting Step 3 Ops Manager review
  • Step 4 Head of Business weekly review of performance Step 5 Manufacturing management team monthly review
  • Step 6 Site wide performance reviewed with partners
  • Ask the group for their thoughts Use flip chart to capture the ideas the group has on KPI’s for their area Eg’s Waste elimination Delivery Schedule adherence Takt adherence Overtime Right first time Efficiency / Profit Timely Customer Orientated Continuous Improvement Reducing man hours
  • This is the 12 step process to create KPI’s Talk through each one
  • This shows Define and Prioritise stage.
  • Identify the owners and develop a review process WHO WHAT WHERE WHEN HOW
  • Data collecting sheet to feed into the performance indicators
  • Train people to use the indicators…..This is critical as they must all be trained exactly the same way,to ensure repeatability and reproducibility (Gauge R &amp; R).
  • Collect the data and create an improvement plan. This is done by agreeing targets for improvement based on the site targets and following the initial data collection you will have a much better understanding of what you are capable of.
  • Once you have created your KPI’s you should monitor the relevant of them regularly, by going through the process again. Always ask your customer if they want anything different than you are providing them.
  • KPI's Training Pack

    1. 1. Key Performance Indicators - KPI’s Training Pack
    2. 2. <ul><li>Target Audience : Site Management to Team Leaders </li></ul><ul><li>Purpose of Module : To ensure employees have the skills to quantify impact, and provide timely direction for an individuals contribution ( at all levels) towards achieving overall business goals </li></ul><ul><li>Aims & Objectives : </li></ul><ul><ul><ul><ul><li>How to define & measure our given business goals </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Why have KPI’s </li></ul></ul></ul></ul><ul><ul><ul><ul><li>How clarity of objectives improves motivation and delivers performance </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Standardised approaches to KPI’s </li></ul></ul></ul></ul><ul><ul><ul><ul><li>How to translate and cascade KPI’s at all levels </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Explain links to Performance Management </li></ul></ul></ul></ul>Aims & Objectives
    3. 3. Key Performance Indicators <ul><li>Course Outline </li></ul><ul><li>INTRODUCTION </li></ul><ul><li>WHAT ARE KEY PERFORMANCE INDICATORS ? </li></ul><ul><li>CHARACTERSITICS OF A GOOD KPI </li></ul><ul><li>EXAMPLES OF KPI’S </li></ul><ul><li>THE KPI CASCADE PROCESS </li></ul><ul><li>HOW TO CREATE AND MANAGE KPI’S </li></ul><ul><li>SUMMARY </li></ul>
    4. 4. <ul><li>Name </li></ul><ul><li>Department </li></ul><ul><li>Length of service </li></ul><ul><li>Knowledge of </li></ul><ul><li>Key Performance Indicators </li></ul>Introductions
    5. 5. What are KPI’s Flip Chart
    6. 6. Key Performance Indicators <ul><li>TO COMMUNICATE STATUS - ACTUAL v TARGET </li></ul><ul><ul><ul><li>PLANT LEVEL </li></ul></ul></ul><ul><ul><ul><li>BUSINESS LEVEL </li></ul></ul></ul><ul><ul><ul><li>WORK STATION LEVEL </li></ul></ul></ul><ul><li>TO DRIVE IMPROVEMENT BY FACT NOT GUESSWORK </li></ul><ul><li>TO HELP PRIORITISE IMPROVEMENT ACTIVITY </li></ul><ul><li>A CONTINUAL HEALTH CHECK FOR THE BUSINESS </li></ul><ul><li>TO CONNECT THE CUSTOMER TO THE PROCESS </li></ul>WHAT ARE KPI’s FOR?
    7. 7. Key Performance Indicators ESSENTIAL <ul><li>IMPORTANT TO THE VIEWER </li></ul><ul><li>VITAL - AFFECTS THE BUSINESS </li></ul><ul><li>CUSTOMER FOCUSED </li></ul><ul><li>DRIVES IMPROVEMENT </li></ul>
    8. 8. Key Performance Indicators USEFUL <ul><li>CURRENT - UP TO DATE </li></ul><ul><li>EASY TO UNDERSTAND </li></ul><ul><li>IMPORTANT AND RELEVANT </li></ul><ul><li>VIEWER CAN CONTRIBUTE </li></ul><ul><ul><li>HAS A STAKE </li></ul></ul><ul><ul><li>CAN HAVE AN EFFECT (good and bad) </li></ul></ul>
    9. 9. Key Performance Indicators <ul><li>URGENCY / OWNERSHIP </li></ul><ul><li>RESPONSIBILITIES DEFINED </li></ul><ul><li>DYNAMIC IMPROVEMENT PLAN </li></ul><ul><li>AUDIT PROCESS - ACTUAL V’s PLAN </li></ul><ul><li>CLEAR OBJECTIVES </li></ul>IMMEDIATE
    10. 10. Key Performance Indicators <ul><li>GROUP OF METRICS </li></ul><ul><ul><ul><ul><li>NOT EVERYTHING WE MEASURE IS A KPI ! </li></ul></ul></ul></ul><ul><li>STATISTICS </li></ul><ul><ul><ul><ul><li>THESE CAN HELP DEFINE KPI’s </li></ul></ul></ul></ul><ul><li>WORK MEASUREMENT </li></ul><ul><li>A TOOL FOR BLAME </li></ul><ul><li>WALL PAPER </li></ul>WHAT ARE KPI’s NOT ?
    11. 11. Key Performance Indicators <ul><li>DYNAMIC </li></ul><ul><ul><ul><ul><ul><li>WELL MANAGED - ROTATE VITAL FEW </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>OWNED AND OPERATED BY LOCAL TEAM </li></ul></ul></ul></ul></ul><ul><li>SIMPLE </li></ul><ul><ul><ul><ul><ul><li>EASY TO UPDATE - MANUAL </li></ul></ul></ul></ul></ul><ul><li>VISUAL </li></ul><ul><ul><ul><ul><ul><li>LOCATED WHERE EASY TO SEE </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>CHANGES JUMP OUT AT VIEWER </li></ul></ul></ul></ul></ul><ul><li>ENGAGING </li></ul><ul><ul><ul><ul><ul><li>RELEVANT - CREATES TALKING POINT </li></ul></ul></ul></ul></ul><ul><li>STANDARD FORMAT </li></ul><ul><ul><ul><ul><ul><li>EASY FOR OUTSIDER TO UNDERSTAND </li></ul></ul></ul></ul></ul><ul><li>FEEDBACK RECORDED AND ACTED UPON </li></ul>CHARACTERISTICS OF GOOD KPI
    12. 12. <ul><li>Safety Performance </li></ul><ul><li>Quality Performance </li></ul><ul><li>Cost Performance </li></ul><ul><li>Delivery Performance </li></ul><ul><li>People Performance </li></ul>Key Performance Indicators Business KPI’s
    13. 13. Examples Defects Per Assembly 0 100 200 300 400 500 600 Jul Sept Nov Jan Mar May Jul Sep Nov Machining Sub Assy Assembly Test 2001 Target Target Improvement Actual Performance Plotted Against Target Legend Easy To understand Visual Indicator of Performance Trend Unambiguous Title
    14. 14. Examples <ul><li>RED </li></ul><ul><ul><li>Outside of target with no improvement </li></ul></ul><ul><ul><li>or deteriorating trend. </li></ul></ul><ul><li>AMBER </li></ul><ul><ul><li>Inside of target but with deteriorating trend. </li></ul></ul><ul><ul><li>Outside of target but with improving trend. </li></ul></ul><ul><li>GREEN </li></ul><ul><ul><li>Inside of target with improving or level trend. </li></ul></ul>RAG Colour Coding
    15. 15. Examples Scrap Cost 2004 0 2000 4000 6000 8000 10000 12000 14000 16000 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC £ 0 10 20 30 40 50 60 70 80 No. Of Items Scrap Cost Scrapped Items Budget YTD Scrap Cost: £34.0k
    16. 16. Examples Schedule 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Stage 1 Stage 2 Stage 3 How are we doing against the plan? Are we on target?
    17. 17. Examples External Supply Schedule Adherence 0% 20% 40% 60% 80% 100% 23 24 25 26 27 28 29 30 31 32 33 Supplier 1 Supplier 3 Supplier 5 Supplier 2 Supplier 4 What are we aiming for?
    18. 18. Examples WIP 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Nov 99 Jun 00 Sep 00 Oct 00 Nov 00 36951 37043 £ '000 0 0.5 1 1.5 2 2.5 3 3.5 Stock Turns WIP Value Product A WIP Value Product B WIP Budget Stock Turns
    19. 19. Examples
    20. 20. Examples
    21. 21. Performance Management Cascade & <ul><li>Step 1 - Team Leaders manage the Key Drivers of performance </li></ul><ul><li>Are we fully manned to complete the work packages? </li></ul><ul><li>Is overtime under control? </li></ul><ul><li>Are we hitting targets (Minutes to complete Operations) ? </li></ul><ul><li>Step 2 - Manager holds daily </li></ul><ul><li>Team Leader review by </li></ul><ul><li>work package </li></ul><ul><li>Actions timely and focused </li></ul><ul><li>Support given when needed </li></ul>Stage 1 Jig Board Minutes to complete Op 1 Minutes to complete Op 2 <ul><li>Step 3 - Assembly Managers review Weekly Performance withManagers . </li></ul><ul><li>Cost accountability introduced. Focus on shift by shift performance. </li></ul>
    22. 22. Performance Management Cascade & <ul><li>Step 4 - Head of Business reviews Weekly Performance </li></ul><ul><li>Good informed </li></ul><ul><li>debate </li></ul><ul><li>resulting from </li></ul><ul><li>upward cascade </li></ul><ul><li>of Team Leaders’ </li></ul><ul><li>performance </li></ul><ul><li>Countermeasure plans if targets not being met </li></ul><ul><li>Step 5 – Senior Management Team reviews Monthly performance </li></ul><ul><li>Senior level escalation plans. </li></ul>
    23. 23. Performance Management Cascade & <ul><li>Step 6 - Site Cost Performance consolidated. Manufacturing Director reviews Factory Manager Performance. </li></ul><ul><li>Forecasts of cost performance compiled to ensure corrective actions taken to achieve “Budget”. </li></ul><ul><li>Risks & Opportunities monitoring and control. </li></ul>
    24. 24. What KPI’s do you think would be applicable to your area Flip Chart
    25. 25. How to Create and Manage KPI’s Identify Customers and Suppliers Form Improvement Teams Create Improvement Plan Train Users Monitor Progress To Plan And Take Corrective Action Form Team Determine Performance Drivers1 Identify owners and users Score & Prioritise KEY Performance Indicators Define Local Performance Indicators Develop Format And Review Process Collect Data PLAN Continuous Improvement Cycle DO CHECK ACT
    26. 26. How to Create and Manage KPI’s Score & Prioritise KEY Performance Indicators Identify Customers and Suppliers Determine Performance Drivers Form Team Define Local Performance Indicators
    27. 27. How to Create and Manage KPI’s & Score & Prioritise KEY Performance Indicators Ease of recording data Impact on business Frequency of occurrence Define Local Performance Indicators
    28. 28. How to Create and Manage KPI’s Identify Customers and Suppliers Form Team Determine Performance Drivers Score & Prioritise KEY Performance Indicators Define Local Performance Indicators Develop Format And Review Process Identify Owners and Users
    29. 29. Example &
    30. 30. How to Create and Manage KPI’s Identify Customers and Suppliers Form Team Determine Performance Drivers Identify Owners and Users Score & Prioritise KEY Performance Indicators Define Local Performance Indicators Develop Format And Review Process Train Users
    31. 31. How to Create and Manage KPI’s Identify Customers and Suppliers Create Improvement Plan Train Users Form Team Determine Performance Drivers Identify Owners and Users Score & Prioritise KEY Performance Indicators Define Local Performance Indicators Develop Format And Review Process Collect Data
    32. 32. How to Create and Manage KPI’s Create Improvement Plan Train Users Form Team Determine Performance Drivers Identify Owners and users Score & Prioritise KEY Performance Indicators Define Local Performance Indicators Develop Format And Review Process Collect Data Identify Customers and Suppliers Form Improvement Teams Monitor Progress To Plan And Take Corrective Action
    33. 33. Typical KPI’s KPI - examples Target <ul><ul><li>Quality </li></ul></ul><ul><ul><li>Defects </li></ul></ul><ul><ul><li>(Defects per unit) </li></ul></ul><ul><ul><li>Errors </li></ul></ul><ul><ul><li>(errors per unit) </li></ul></ul><ul><ul><li>Delivery </li></ul></ul><ul><ul><li>Schedule adherence </li></ul></ul><ul><ul><li>(Hours delta to plan) </li></ul></ul><ul><ul><li>Cycle Time </li></ul></ul><ul><ul><li>(Hours per Unit) </li></ul></ul><ul><ul><li>C o st </li></ul></ul><ul><ul><li>Manning </li></ul></ul><ul><ul><li>( man hours per set ) </li></ul></ul><ul><ul><li>(Cost per unit) </li></ul></ul><ul><ul><li>People </li></ul></ul><ul><ul><ul><li>Skill Level </li></ul></ul></ul><ul><ul><ul><li>Training Hours </li></ul></ul></ul><ul><ul><li>0 delta (nil Hours behind or ahead of plan ) </li></ul></ul><ul><ul><li>To be agreed </li></ul></ul><ul><ul><li>1 Defects per unit </li></ul></ul><ul><ul><li>2 errors per unit </li></ul></ul><ul><ul><li>270 hours per unit </li></ul></ul><ul><ul><li>£5,000 per unit </li></ul></ul>Key performance indicators need to be simple and focused <ul><ul><li>75% people trained to Practitioner Level </li></ul></ul><ul><ul><li>40 hrs per man per year </li></ul></ul>
    34. 34. KPI’s <ul><li>Direct relationship to business plan </li></ul><ul><li>Communicates progress against plan </li></ul><ul><li>Drives continuous improvement </li></ul><ul><li>Visual - provokes a response </li></ul><ul><li>Effective - simple and easy to understand </li></ul><ul><li>Ownership - relates to everyone </li></ul><ul><li>Up to date - dynamic management </li></ul>SUMMARY

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