This document provides an introduction to key performance indicators (KPIs). It discusses why organizations use KPIs, how to create them, and how to monitor them. KPIs measure critical success factors to focus on today's and tomorrow's success. The document outlines a KPI process that involves observing behavior, identifying critical success factors, creating measures, and monitoring them. It also discusses how to create a balanced scorecard across operational excellence, capital stewardship, profitability, and organizational development. Examples of KPIs are provided for various categories.

1. INTRODUCTION TO KEY
PERFORMANCE
INDICATOR(KPI)

2. What’s
A KPI?
MEASURES THAT FOCUS
ON CRITICAL FACTORS
FOR TODAY’S AND
TOMORROW’S SUCCESS.
= KEY PERFORMANCE
INDICATOR

3. Why have KPI?
Creating your KPI
Creating
Balanced
Scorecard
Monitoring
WHAT TO EXPECT?

4. WHY
HAVE
KPI?
 THE BEST MEASURES ARE OBVIOUS
 THIS IS EASY
 FOCUS IS NEEDED
 TYING MEASURES TO PAY IS THE
ONLY WAY TO MOTIVATE
 MEASURES ALWAYS INCREASE
PERFORMANCE
 MEASURES ARE IN PLACE TO
ENSURE STAFF ARE SPENDING THEIR
WORKING HOURS ON THE RIGHT
ACTIVITIES

5. Observe Human
Behaviour
Balanced &
Strategic
Known Critical
Success Factors
Create Measures
Monitor
THE
KPI
PROCESS

6. The balanced score card is
a strategic planning and
management system that
is used extensively in
business and industry
world wide to align
business activities to the
vision and strategy of the
organization, improve
external and internal
communications, and
monitor organizations
performance against
strategic goals.
BALANCED SCORE CARD
Goal

7. WE HAVE CATEGORIZE OUR BALANCED
SOCRE CARD IN 4 CATEGORIES
OPERATIONAL
EXCELLENCE
CAPITAL
STEWERDSHIP
PROFITABILITY
ORGANIZATIONAL
DEVELOPMENT

8. OPERATIONAL EXCELLENCE
Operational excellence
is the composition of
Leadership engagement,
Employee Involvement,
Strategic direction and
focus, Exceed customer
expectation, Process
excellence and
commitment to Quality.
EXAMPLE: FTT
fabric/accessories/AQL/
production/plant , plant
efficiency, cutting
efficiency, pilot failures.

9. CAPITAL STEWARDSHIP
The careful and
responsible
management of
the capital
entrusted for
reaching
organizations
ultimate goal.
Example:
Direct/Indirect
Ratio, WIP, OT/EOT

11. ORGANIZATIONAL DEVELOPMENT

12. Keeps daily
activities on track
with strategy
Goals are motivating
Baselines help with
trend analysis
Employee
engagement
WHY ARE KPI’S IMPORTANT?

13. Have a team to
select
Measure things that
matter
Select measures
that measures
multiple areas of the
business
Example: measure
profit versus only
revenue or cost
TOO MANY KPI IS HARMFUL

14. BFM elaborates the
idea of BASIC FOR
KPI MEASUREMENT.
BFM tells us about
the definition,
calculation method
of a certain KPI.
Through BFM we can
easily know how our
KPI IS MEASURED.
WHAT IS BFM?

15. QA_03
Plant FTT has been categorized by QA_03
Calculation Method
QA_03 = Fusing Inspection × Cutting Accuracy Inspection ×
Fabric inspection × Acc. Inspection × Cut Panel Inspection × Inline
Inspection × End line Inspection×Finishing Quality Inspection×AQL.
Definition of Plant FTT:
This KPI is the multiplication of Fusing Inspection, Cutting Accuracy
Inspection, Fabric inspection, Accessories Inspection, Cut Panel
Inspection, Inline Inspection, End line Inspection, Finishing Quality
Inspection, AQL inspection for the first time.
Example:
For the month of January our plant FTT was 50.34% which means that in
that month if we had achieved 100 work minutes then we utilized first
time only 50.34%planned work minute.
SAMPLE BFM

16. THE
KPI
SCORECARD
OPERATIONAL
EXCELLENCE
•FTT
Fabric/accessories/plant/cutting/production/finishing/AQL,
Independent audit pass rate, Customer Complaints, Plant
efficiency, cutting efficiency, production efficiency, Change
over time, No of style changes, Pilot lead time, Manufacturing
cycle time, Pilot FTT, Pilot failures, OTTA, OTD Plant, OTD
Cutting, OTD Manufacturing, SMV Saving on costing, On time
layout submission, Finishing Efficiency, Packing Accuracy,
Machine Downtime, Utility Downtime, On time machine
availability,
CAPITAL
STEWARDSHIP
• Machine rent cost, Spare parts cost,
Direct/Indirect ratio, WIP, OT/EOT
PROFITABILITY
•Order to cut, Cut to ship, Order to ship, Rejection
Quantity, Rejection value, Rejection %, Not found AFM,
Not found BFM, Standard hour utilization, Standard
minute cost
ORGANIZATIONAL
DEVELOPMENT
• Training hours for Managers, Line management,
operators.

17. EXAMPLES
Critical Success Factor (KPI)
Engaged staff
Staff missing training over next 2 weeks,
reported daily
Grow leaders Number of recognitions in past 2 weeks
Innovation
# planned for next 30 days -90 days
(reported weekly)

18. KPI EXAMPLES
# Production Efficiency Three Day Ladder_TL_1_1st Day
# Production Efficiency Three Day Ladder_TL_1_2nd Day
# Production Efficiency Three Day Ladder_TL_1_3rd Day
# of quality problems found
# of new initiatives completed
# of customer complaints recording
# of finishing deficiency found
# of calculating fabric, accessories, AQL, plant, cutting,
production FTT
# of independent audit pass rate
# of pilot lead time
# of manufacturing cycle time
# of standard hour utilization
# of standard minute cost

19. OBJECTIVES:
Implementation
Reporting
Abandonment
MONITORING

20. Roll out into team
performance
measures
Test measures for
behavioural
alignment
Change or remove
measures where
appropriate
IMPLEMENTATION

21. Use visualization
Simplification
Frequency
Daily reports to team
Weekly updates to
management
REPORTING

22. Stop creating unread
reports
Remove KPIs that
aren’t reviewed or
changing
Remove KPIs that
are harmful,
duplicated, or
unnecessary.
ABANDONMENT

23. Why have KPI?
Creating your KPI
Balanced
Scorecard
Monitoring
WHAT WE COVERED

24. QUESTIONS?