7 Steps to Better KPIs
We had one question:
Which performance indicators are you using in today’s work environment?
Of those interviewed, 88% of respondents stated that performance indicators were not available or tracked within the organization.?Yikes!?Broad phrases like “we are growing nicely” were often referenced and undefined.
???Step #1: Identify a shared problem.
Asking a broad question of “what keeps you up at night” often generates an ideal starting point. Of those we interviewed, 67% identified supply chain issues as the #1 cause of sleepless nights. Amazingly, the supply chain issue was identified in every industry we spoke with, from healthcare to manufacturing. The “headache” is real – regardless of the industry.
???Step #2: Capture your value stream.?
Value Stream: A set of actions generating value for a customer, member, or recipient of your organization’s product or service.
Every business has a series of actions that create value for something else. When mapped, this series of actions, the?value stream?provides a visual of areas where you can integrate performance indicators.
???Step #3: Create a baseline metric.?
Metrics associated with the supply chain value stream could include any or all the following:
???Step #4: Track your results.
This step is assigned to one individual or a department within your organization. Tracking can include manual processes but are most effective and secure when automated. However, don’t let a lack of automation stand in your way! A starting number in any baseline metric category is always better than not having a number at all.
???Step #5: Report.
Individuals perform on what is tracked and reported. For example, if you have 6 raw material issues in 24 hours, alarms should go off. If that alarm goes unreported, the problem will likely continue. When that alarm is reported to a supervisor, the issue will probably be addressed and hopefully solved. Nobody likes to fail, but failure is part of the experience and is beneficial in creating workplace relationships!
???Step #6: Incentivize.
YOU ROCK!?Doesn’t it feel good to hear a compliment? Any variation of an incentive, from public praise to a celebratory lunch or bonus, drives enthusiasm in the value stream. Like the baseline number, pick a number that aligns with success, then reward the achievement. You’ll notice the little things just happen when you give genuine praise.
???Step #7: Document the Standard.
Now that you have performance indicators in place, capture the details. How did you create the metrics? Who is embedded within the processes that contribute to the metrics? These details become your Standard Operating Policies and Procedures for repeat success and scalability in your organization.