KPI Focus Workshop

Building a KPI is about collecting evidence

WHAT Does KPIMean?

K”ONCERN- (WHAT AFFECTS RESULTS)PERFECT- (WHAT RESULT ARE INTENDED)S“I”GNAL- (INDICATE DIRECTION)

KEY- (IMPORTANT / RELEVANT)PERFORMANCE- (DOING, Carrying Out, Executing)INDICATOR- (POINT OUT, TELL, SHOW)

KPI is a formula to collect evidence/data that indicates if your management makes “performance” better or worse!

Measuring Device

Sample Size= 100Mean= 40.1 cmAverage= 40.0 cmSTD σ = .073# Bad products = 4

● Before 3 months Reduce Process Variation 5%.

● Reduce QC reject 10% by October.

Goals

Is There a KPIHere? Requirements / Limits

Analysis / Statistics

Result

XY=40.3cm

Consequences

MEASURE S.M.A.R.T. GOALS WITH M.R.T. KPI’s?

Data captured / available (or, could be available) from the way you do

business.(Does capturing Data cost more than the value it provides?)

Critical Success Factors (CSF’s) identify the concern or necessary action to achieve your goal (ex. an issue that prevents you activity from being effective) .KPI’s follow that concern catching only the important information from your business metrics.

M-What data can you use?R- Does it fit to CSF?T- Track progress (how often?)

First we need to have activities we manage!Think of elevators in a tall building.

●What are activities of elevator management?●What is “Good Performance” for an elevator?

Lets Consider Elevator

Management

• Who are the different stakeholders?• How are their motivations different?• WHAT IS A GOOD ELEVATOR?

Suppliers? Shoppers?Owners? Office Staff?Workers?

A view of performance will change depending on who you serve?

In your experience, what is a Bad Elevator?How can you observe this?

What are the indicators of a performance problem?

How can the problems/issues be observed or described to another person.

Elevator Request

The basic control cycle for the control of an elevator

We have 8 lifts & 100

FloorsACTIVITY

MANAGEMENT-

ACTIVITY MANAGEMENT-● Receive Pickup Requests

Prioritize and schedule cars● Move vehicles (assets) to correct location.● Load Cargo● Review Destination Requests

Determine if there are interim stops to be made.

Prioritize and schedule cars● Unload Cargo

Determine if you can load cargo from current location and deliver to another.

●Determine waiting location (If no request)●Schedule repairs and maintenance

Elevator ManagementSame as

Transportation Management?

What factors do you need to consider?

● Is a problem a control issue?

● Is it a design issue?● Can you predict the

issue?○ Will better info

help?● Is there

infrastructure you can’t change?

What STRATEGY might...address/reduce these issues?

Video Link

http://www.schindlerportna.com/trafficmanagement/

Double-D

ecker

Control App

Add External Lift Grouping / Location Control System

Conveyor/ Milk Run

Arom

atherapy

RFID

Access C

ontrol

Regenerative P

wr.

Anti-GraffitiFilm

Will Your Strategy Work?

AddressesObjectives

Solves Issues(CSF)

Considers Factors

ResourcesAre Available

How can you Prove

?

1. Your management is: Good at solving a concern? Bad at solving a concern?

2. Your Strategy: Made performance Better? Made performance Worse?

How can you provide evidence that:

INDICATE /SIGNAL

Direction is:Good/BadBetter/Worse

re. RESULTS

(over time...)

What is a KPI?It is a formula to compare repeating activities

What is a KPI?

K= Critical Concern (counted or measured)P= Perfect Standard (input or output, standard)I= Indicator (Signal)

Count or Measure the (CSF) Critical Success

Factor Compare to a Standard

It is a formula to compare repeating activities

AND – Tell how often will you review the data?

Some Elevator KPIExamples

●“Average Wait” per 1000 requests(weekly) = ∑Wait Time /1000 requests (review each week)

●Average Cleaning Cost (monthly)= ∑Cleaning Costs/Number of Cleanings (per month)

●Elevator System Availability(monthly)= (Total Time – Unavailable)/Total Time (per month)

●Watts per use (daily)= ∑Energy used / # of Trips (per day) (This is a cost measurement why not use cost to operate / trip?)

COUNT OR MEASURE THE “K”ONCERN

(C.S.F.)● BINARY OR ABSOLUTE METRIC: Number

meeting/breaking a standard or goal- ex. # of Damaged Goods # of On-Time Shipments # of Error Free Transactions # that meet the goal, requirement or limit

(ex. # delivered in less than 3 days)● COMPARATIVE METRIC: Incorporates more than

one measurement-ex.Average (sum of total / number in standard)Variation (max – min)Utilization (Used-Total Available)Deviation (reality – expectation) (max/min-

requirement)

● Outputs (results of work):● Number of Product Produced or Shipped● Number of Transactions● Number of Kilometres Travelled● Carbon Produced CO2

● Number of Orders Processed● Revenue Earned

● Inputs or Resources Used:● Total requests● m3 (square meters) of Warehouse or Transport Space● Amount of Fuel or Electricity Consumed● Month or Days or Hours or Currency Consumed

● When volume change (seasonality) is a concern use a level comparator:● Per Unit (or) a set number of units-ex. #damage/1,000 units● Per Transaction (or) a set number-ex. #complaints/100 requests

COMPARE TO A STANDARD

WHAT WOULD BE PERFECT?

REVIEW!

DATA captured / available (or, could be available) from the way you do business.(Will capturing data cost more than the value it could provide?)

Critical Success Factors (CSF’s) identify the concern or necessary action to achieve your goal (ex. an issue that prevents you activity from being effective) .KPI’s follow that concern catching only the important information from your business metrics.M-easurement data available?R- elevat to CSF?T- Track progress (how often?)

A KPI is a formula to create evidence that direction in a “CSF” is trending Good, Bad, Better, or Worse

WHAT IS A GOOD KPI?

Good Luck!