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What are the best KPIs to measure in your operations research project?

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Operations research (OR) is a discipline that applies mathematical and analytical methods to help decision-makers optimize complex systems and processes. OR projects can involve various aspects of planning, scheduling, routing, inventory, forecasting, simulation, optimization, and more. But how do you measure the success and impact of your OR project? How do you communicate the value of your OR solutions to stakeholders and clients? How do you monitor and improve your OR performance over time? The answer is: by using key performance indicators (KPIs).

本文章的要点总结

Problem-driven KPIs:

Begin by evaluating your project's specific challenges and let these guide the selection of your KPIs. This ensures that your metrics are directly tied to what's most critical for success in your operations.
Keep it simple and relevant:

Choose KPIs that are easy to understand and measure, focusing on essential aspects like cost and time. This simplicity helps maintain clarity on performance and facilitates more effective decision-making.

本摘要由 AI 和以下专家提供支持

Ahmet Kandakoglu

Senior Manager, Data Science and…
Sheeba Pathak

1 What are KPIs?

KPIs are measurable values that indicate how well an organization, team, or project is achieving its objectives and goals. KPIs can be used to evaluate different aspects of performance, such as efficiency, quality, customer satisfaction, profitability, and innovation. KPIs can also be used to compare different scenarios, alternatives, or benchmarks. KPIs can help you track your progress, identify strengths and weaknesses, and make data-driven decisions.

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Mohamed El Arabi Chab

Procurement agent
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KPIs are here to follow up the Middle management vision and ensure to be in compliance with the daily operational tasks You can not track the efficiency of your departement if all that you hear is to reduce the cost and delivery times KPIs are simple to put into practice and to track if your business targets are clearly identified

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2 How to choose KPIs for your OR project?

When selecting KPIs for your OR project, there is no one-size-fits-all formula. The best KPIs depend on the context, scope, and purpose of your project, as well as the expectations and needs of your stakeholders and clients. However, there are some general criteria to consider when choosing relevant and meaningful KPIs. These include alignment with the strategic objectives and goals of your project and organization; specificity in defining what you want to measure, how you will measure it, and what the target or desired outcome is; measurability with data that is reliable, valid, and available; actionability with insights and feedback that can help you improve your performance; and timeliness that reflects the current situation of your project.

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Ahmet Kandakoglu

Senior Manager, Data Science and Advanced Analytics @ IATA | Researcher | Lecturer | Top Operations Research Voice on LinkedIn
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A few advice: Let the business problems drive the KPIs. Focus on the current practice, and the performance measures or KPIs that are currently being used. Note that an objective function value, a decision variable or a constraint can be a KPI. But in many situations, keep in mind that there may be a few measures that you need to determine after post-processing of your optimization model results. Finally, feel free to identify a reasonable KPI that the optimization model can contribute to the business problem.

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Sheeba Pathak
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Keep it simple. While you may find a host of metrics already in place, see if there is something particular you want to track. Usually it would be either cost or time or both, as that is the aim of OR. Devise a method to quantify it and track it periodically. Automate it if you want to check this very frequently. Keep the metrics simple to compute and comprehend.

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Muthu Solayappan

Co-Founder @ Plan Optimus | S&OP/IBP Software | Supply Chain Planning | Network Optimization
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More often than not, objective functions which are formulated as a part of the math model, would double up as KPIs for the project. In case of multi-objective optimization, each component of the objective function is as a potential KPI. However, if notional values are used for objective function coefficients, it would not render itself as meaningful KPIs. Talking to the business users would often give a deeper insight into metrics that are worth measuring and tracking.

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3 How to measure KPIs for your OR project?

Once you have chosen your KPIs for your OR project, you need to measure them regularly and consistently. This involves collecting, analyzing, and reporting the data that corresponds to your KPIs. There are various methods and tools that you can use to measure your KPIs, such as surveys and questionnaires for gathering feedback and opinions from customers or employees. Spreadsheets and databases can store and organize numerical and categorical data from various sources. Dashboards and charts are great for visualizing the data and trends of your KPIs. Software and applications are useful for automating the data collection and analysis process. Depending on the type and source of data, the level of detail and accuracy, as well as the format and presentation of the results, these methods and tools can help you measure KPIs related to satisfaction, loyalty, engagement, perception, efficiency, quality, profitability, productivity, performance, progress, comparison, optimization, simulation or forecasting.

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4 How to report KPIs for your OR project?

When measuring your KPIs for your OR project, you need to report them to stakeholders and clients. This means summarizing and interpreting the data and results of your KPIs, as well as explaining their implications and recommendations. The purpose of this is to demonstrate the value and impact of your OR project, while justifying and supporting your decisions and actions. There are various formats and channels you can use to report your KPIs, depending on the audience, purpose, and message of the report. For instance, reports and documents offer detailed and comprehensive information about your KPIs, such as tables, graphs, charts, diagrams, or text. Presentations and slides are useful for concise summaries of your KPIs with images, icons, colors, or animations. Stories and narratives provide engaging stories and examples of your KPIs with anecdotes, testimonials, case studies, or scenarios. These can be delivered as oral or written stories like podcasts, blogs, or newsletters.

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5 How to improve KPIs for your OR project?

Finally, you need to improve your KPIs for your OR project over time. This means monitoring and evaluating the performance and outcomes of your KPIs, and identifying and implementing opportunities and actions for improvement. The goal of this is to enhance the quality and effectiveness of your OR project, and to achieve higher levels of satisfaction and success for your stakeholders and clients. To do this, you should review and revise your KPIs periodically, ensuring that they are still relevant, meaningful, and achievable. Additionally, you should benchmark and compare your KPIs against your own performance history as well as that of competitors or industry standards. This can help you identify gaps, strengths, weaknesses, and best practices. Finally, you should learn from the data and results you gain from your KPIs in order to experiment with new ideas or approaches that can improve them.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the best KPIs to measure in your operations research project?

1

2

3

4

5

6

1 What are KPIs?

2 How to choose KPIs for your OR project?

3 How to measure KPIs for your OR project?

4 How to report KPIs for your OR project?

5 How to improve KPIs for your OR project?

6 Here’s what else to consider

Operations Research

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What are the best KPIs to measure in your operations research project?

1

2

3

4

5

6

1 What are KPIs?

2 How to choose KPIs for your OR project?

3 How to measure KPIs for your OR project?

4 How to report KPIs for your OR project?

5 How to improve KPIs for your OR project?

6 Here’s what else to consider

Operations Research

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