4. 4Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
What are “Key Performance Indicators” - KPIs
Key Performance Indicators (KPIs) are a set of quantifiable measures that a
company uses to gauge its performance over time
KPIs are used to determine a company's progress in achieving its strategic and
operational goals, and also to compare a company's finances and performance
against other businesses within its industry
Key Performance Indicators should be avital navigation instrument used by
management to understand whether their business is on a successful voyage or
whether is veering off the prosperous path
Whatever Key Performance Indicators are selected, they must reflect the
organization's goals, they must be key to its success, and they must be quantifiable
(measurable)
KPIs must be specific, measurable, achievable, relevant, time-bound and must
have a clear target
6. 6Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
The difference between a KPIs and a Metrics
Without real KPIs an organization will not perform to
its maximum
Developing the wrong KPI will create more harm
than help
KPIs without clearly defined targets and review
process serve no purpose and have no meaning
7. 7Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Define the indicators
The indicators must be :
Measurable and precise
Based on company objectives
Easy highlighting a need for corrective action
Reflect the progress of the company
Target on customers needs
A vital information for the employees
A mean to obtain the employees involvement
8. 8Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
KPIs echoes organizational goals
KPIs are decided by management
KPIs provide context (framework)
KPIs create meaning for all organizational levels
KPIs are based on real (authentic) data
KPIs are easy to understand
KPIs lead to actions
Characteristics of a good KPIs Process
10. 10Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
KPI Development Process
Specific
Each KPI must focus on a specific performance targetS
M
T
R
A
Measurable
Must be easy to measure and collect data
Attainable
Each KPI must be reasonable and achievable
Realistic
Each KPI must be a representative of the work being done
Time-based
Each KPI must be measured in a specific time period
Set clear Targets
and Objectives
11. 11Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
KPI Process
KPI Process consist of four elements
1. Collecting the information (data)
2. Charting the information
3. Analyzing the information
4. Taking immediate corrective action – if necessary
For every KPI Process we must define:
1. What information do we collect
2. Who is responsible for each KPI
3. When do we collect information, review and analyze
4. Where is the information to be collected
5. Why do we want to collect this information
6. How is the KPI process going to operate daily
12. 12Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Types of KPIs
Production Process KPIs – measure the efficiency or productivity of a business
process
Input KPIs – measure assets and resources invested in to generate business results
Output KPIs – measure the financial and non-financial results of business activities
Leading KPIs – measure activities that have a significant effect on future
performance
Lagging KPIs – indicators that reflect a success or failure after an event, after it has
been conducted
Outcome KPIs – reflect overall results or impact of business activities as a
quantification of their performance
Qualitative KPIs – a descriptive characteristic, an opinion, a property or a feature
15. 15Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Financial KPIs
Revenue from Sales
Profit / Losses
Sales / Orders
Quantity Invoiced (shipped)
Operations
Operating Costs
Cost of Materials
Factory Wages
Equipment Cost (Depreciation)
Cost of Overtime
Cost of Scrap
Admin Salaries and Benefits
Total Costs
Financial
KPIs
SAFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
16. 16Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Sales and Marketing KPIs
Forecast Accuracy – short term and long term
Number of units sold
Average unit sales price
Sales events/promos results
Number of new Customers
Number of new orders received
Number of sales per employee
Number of Customer complaints, returns, etc.
Sales efficiencies
Sales and
Marketing KPIs
SAFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
17. 17Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Production (Manufacturing) KPIs
Process management
Production Schedule Attainment
Process Stability - Reduction of Variation
Lost production time due to equipment problems
Lost production time due to manpower shortages
Lost production time due to material shortages
Overtime hours
Manufacturing Efficiency
Number of Units (Parts) produced per Man Hour (PPH)
Changeover/Setup times (number and duration)
Manufacturing
KPIs
SAFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
18. 18Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Production (Manufacturing) KPIs
Maintenance / Engineering
Equipment Uptime / Downtime (frequency & duration) - OEE
Equipment Utilization, machine efficiency
Repair Efficiency - MTBF
Maintenance Response Time (number and duration) - MTTR
Planned Maintenance
Availability of Tooling
TPM - Autonomous Maintenance performed by Operators
Quality
Number of Customer complaints, returns, etc.
FTTQ - First Time Through Quality in PPM
Scrap / Rework / Repairs
Quality Audits
Manufacturing
KPIs
SAFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
19. 19Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Supply Chain Management KPIs
Customer Deliveries
On Time Deliveries
Number of Premium Shipments
Number of Missed Shipments
Incomplete Transactions
Total Customer Lead time – number of days to deliver an order to the customer
Inventory Management
Number of Material Shortage Incidents
Inventory Turns (days) - Raw Materials, WIP and Finished Goods
Information Accuracy
Obsolete Inventory
Supplier Assessment and Evaluation
Supply Chain
Management
KPIs
SAFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
20. 20Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Human Resources KPIs
People
Manpower Control (Current vs Planned)
Number of production employees
Number of admin employees
Attendance / Lateness
Turn over rate / Terminations / Resignations
Employee Survey
Number of Improvement Suggestions
Cross-functional Training Matrix
Safety
Number on Near-Misses
Number of Accidents
People – HR
KPIs
SAFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
21. 21Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Target Condition:
Targets:
KPIs:
Nobody gets hurt in our factories, including - our employees, customers
and visitors.
Safety
SAFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
ZERO lost time accidents
Zero recordable incidents
Zero near misses
Green Cross – daily
Safety KPIs
22. 22Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Target Condition:
Targets:
KPIs:
Customer Quality - all products shipped to our Customer meet their
quality expectations 100%.
Zero Customer returns
Zero Customer complaints
Zero Warranty returns and repairs
Daily Quality Q – Customer Quality
Number of Customer complaints - weekly
Number of warranty returns – weekly
Number of mislabelled shipments
Quality
AFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
External Quality
KPIs
23. 23Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Target Condition:
Targets:
KPIs:
All our products shipped delivered to the Customer on-time and in the
right quantity
100% on time deliveries
100% correct quantity shipped
Delivery D
Number of shipments – daily
Number of On-Time shipment – daily
Number of Missed Shipment – daily
Number of Late shipments – daily
Number of Short shipments – daily
Number of Premium shipments - daily
Supply Chain
Management
QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
Customer
Delivery KPIs
24. 24Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Target Condition:
Targets:
KPIs:
Planned production requirements achieved every day.
100% daily Production Schedule Attainment
Daily Volumes – Planned vs Actual
Lost production time due to equipment problems
Lost production time due to manpower shortages
Lost production time due to material shortages
Overtime hours
Productivity
COST PEOPLE
Manufacturing
KPIs
27. 27Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Information and Meeting Centers:
To display and update all date and information related to Team’s activities
To conduct review meetings
To review progress of continuous improvement activities
To provide a place for operators and Team Leaders to work on the
administrative aspect of their job: updating charts, summarizing results,
writing and completing forms and reports
SAFETY QUALITY DELIVERY PRODUCTIVITY COST PEOPLE
29. 29Marek.Piatkowski@Rogers.com
Key Performance
Indicators
Introduction
Thinkingwin, Win, WIN
Changing the World. One Kaizen at a time
This presentation is an intellectual property of W3 Group Canada Inc.
No parts of this document can be copied or reproduced
without written permission from:
Marek Piatkowski
W3 Group Canada Inc.
iPhone: 416-235-2631
Cell: 248-207-0416
Marek.Piatkowski@rogers.com
http://twi-network.com