Do KPIs require a pass/fail threshold?

[Randy]

Randy, I respectfully disagree with you. The purpose (as I understand it) of a KPI is to have a 'target' for performance of a process or activity. Having a 'target' (no matter what name you use to reference it) also implies the intent to ACHIEVE that target, or at the very least, to use that target to evaluate how close you are to achieving it.

If you do NOT have a 'PASS/FAIL' metric for your target, then what is the purpose of having it?

You didn't read it all in the full context......

set some kind of goal (nobody cares, it's yours) and try to make it happen, fixing whatever breaks on the way

Set a "goal" goal = TARGET. I also said, that it doesn't make a crap what you call something, just do it. I'm an auditor and I really couldn't care less what something is called as long as it's understood what it is, you can explain what it is and everything else is "hunkey-dunkey".

Fixing whatever breaks requires you to be attentive to whatever doodly-bing numbers or measurement you use and if they aren't getting you to where you want, either fix what's causing the problem or change the goal (if possible).

I've got somewhere over 5,000 flight hours crewing broken helicopters during test flights, we had "indicators" (guages) that gave us readings, they served us no purpose if we didn't have a required performance level under specified condition, and they indicated achievement of, transmission torques, temperatures, or airspeed....Or better yet, stall speed in a fixed wing aircraft, at certain speeds under specified control settings the plane should stall (make sure you've a good amount of air under you beforehand), you watched the "airspeed indicator" for the proper "speed...or target" before the plane started to fall (rather quickly) Variance either high or low required....Guess what? Corrective Action!...........It's all the same thing-Required Performance Level and Expectations (Goals-Targets).

 

[Jtavo]

Performance or, Process indicators may give you insight when used as thresholds. When used in the context of a supplier, I'd offer that you should look up Performance Based Contracts and how they work - as KPI's are just one of the measures used (and should be used sparingly). An indication into Systems Health of each contractor can be used to compare across contracts if that is your aim, however all of this should be gripped up by the Contracts Team (if you have one) or by quite a bit of reading - its a profession in itself.

Introducing a strict pass/fail metric into supplier management is the opposite to setting up for success

 

[mattador78]

You know what? Do whatever you want, and call stuff anything you want, just pick some whatever to monitor and measure that's important to you and maybe your customers, set some kind of goal (nobody cares, it's yours) and try to make it happen, fixing whatever breaks on the way. Do something, if it doesn't work, do something else.

Never a truer word spoken, had an audit where i was queired about why i didnt measure a certain metric. I replied that it didnt add value to what we did and if i did do it, it would be nothing more than a tick box exercise that could be missed and give me a NC in the future. So i wasnt going to bother. Auditor had common sense said fair enough and moved on.

 

[Randy]

had an audit where i was queired about why i didnt measure a certain metric.

Asked it more than once myself. Lot's of things that have a pretty graph or chart assigned to them seem to be little more than eye candy or "gee-wiz" gibberish to show people that something is being looked at. I honestly get tired and go brain dead early with the endless PPT slides with all this "stuff" flashing in front of me. "Show me the beef" comes to mind.

 

[Ed Panek]

One of my favorite quotes is "What we know for sure that just ain't so". I guess I'd need a wormhole Venn diagram, to show a subset of knowledge with a non-intersecting circle.

So many meettings where we discovered we dont know the key things we need to know to make a decision. Now its just a question of who is going to get tasked with answering it. This is why stuff takes so long often. In order to make an executive decision you require confidence in what we know about it. Just asking simple questions reveals "We dont know much" LOL