Key Performance Indicators - Do I have to have one for ALL of my processes?

[rangotango]

Hi,

I am interested in setting our key performance indicators, and think I can set an average of the last 2 years results; e.g scrap cost as % of sales and ppm.
Is this sufficient?

Do I have to have one for ALL of my processes?

Rangotango

[Caster]

Originally Posted by rangotango

Hi,Do I have to have one for ALL of my processes?
Rangotango

My registrar says YES, my best guess "why" is Paragraph 0.2 Process Approach

d) continual improvement of processes based on objective measurement.

I look forward to what others have to say

[MikeL]

I have worked on KPI's that address the four key areas in 8.4

Customer satisfaction which could be a survey, no of complaints

product conformity which could be warranty or an inspection result

process trends such as efficiency or utilisation or no of rejects

supplier performance - no of rejects

If you have a least one measure in each of these areas that is enough.

Section 0 is not a compliance requirement according to ISO. I've never had an assessor beat me over the head with it.

[RCBeyette]

Try doing a search on the Cove for Metrice and Key Indicators...we've had many discusions on these topics before.

But do you need them for all your processes...let me answer by a question or two:

• Why wouldn't you?
• How do you know that your processes are under control if you are not measuring them?

My organization has a philosophy that there can be no Improvement without Routine. In other words, Improvement is impossible if your current processes are not stable and under control. How can you demonstrate this if you are not measuring those indicators for the key activities within the processes?

And if you can not demonstrate control...how can you demonstrate improvement?

Oh, welcome to the Cove, rangotango!

[warrior]

I have created a Indicator for any one of my processes!
But I remind that I have a small number of processes. Only the key processes for my organization.

So, I have indicators on:
1 - Purchaising
2 - Sales
3 - Research & Development (we do only Development)
4 - Production (a process that goes from planning to packing)
5 - Logistics
6 - Customer Perception Management

[SteelMaiden]

not trying to be a smart here, but no, you don't have to have ONE for ALL your processes, you need to have at least one for each of your processes. I wanted to make sure that this is understood, as there is a difference, and didn't want it to be misinterpreted as we are not all from the same place. I know what you really meant, but that doesn't mean it would translate well. Interuption over, back to the regularly scheduled discussion.

[Duke Okes]

So the answer is ... it depends.

What do you call a process? If you're talking about a high-level business process (of which there are typically about 5-9 for any organization), then the answer is probably yes. If you're talking about the (sub)processes that combined make up the macro processes, then it's your decision.

Also, as someone mentioned, you will often have more than one objective/metric for any specific process. There are externally-focused metrics (effectiveness) and internally-focused metrics (efficiency). Often I think about quality (e.g., satisfaction of the customer of the process with what they receive), cost (productivity, etc.) and delivery (e.g., cycle time).

A key issue is to make sure that you don't have too many metrics. I've seen organizations with literally 120+ metrics, and believe me, they weren't managing them very well. All time in measurement, no time for management. The Pareto principle rules again.

[pskkumar1960]

Hi friends,

The first thing is to Identify Key Processes for the Organization.

It is based on the Type of Organization. For Eg. In manufacturing Organization the Key Processes would be

1- Planning
2- Purchase
3- Stores
4- Production
5- Quality
6- Engineering
7- Maintenance
8- Marketing etc.

Generally Any Organization will have certain Goals Such as “Achieve Turn Over of 100 % over Last Year, Reduce Customer returns etc,.then based on these Company Goals the Individual Key Performance Indicators for each Processes can be defined.

The key here is that the Individual Key Performance Indicators should be aligned and Linked towards the Company Goals to have real impact on the effectiveness of Key Performance Indicators.

For the above 8 Processes each Process can have 1 or 2 Key Performance indicators which has to be Monitored by the respective Process Owners with a fixed Frequency and reviewed by the Top Management .

Once every six Months these Key Performance indicators are to be reviewed and if needed to be changed as required.


With best Regards,

PSSKumar