Finding Key Performance Indicators (KPI) within our Processes

[amariepsu]

I have been tasked with finding Key Performance Indicators within our processes, and then reporting back to management on my findings. I would like to take a 'scorecard' approach, but do not know how to go about it.

For example, I took a random sample of 20 forms completed for one process, and tallied up each time the internal requirement was not met for each sample.

I now have a histogram showing the major areas that need improvement, but Management does not want to see all these details. How can I create a general scorecard just giving an overview of the process performance?

At this point we just want to gauge where we currently are within this process. After that we will begin to create goals associated with this.

 

[ralphsulser]

If you are in manufactruing then KPIs for starters may be scrap, downtime, efficiency. These can be expanded to cover each piece of equipment and shift. Also add customer complaints/month, return goods, on time delivery, turnover, absenteeism, etc.

 

[amariepsu]

Thanks! I made a pie chart which mapped out specific areas where I found nonconformances within one process. This is my starting point. I just forwarded it to my boss. I hope he likes it!

 

[SteelMaiden]

I hate it when managers push this off in totallity to the QMS person. Part of this needs to come from what managers feel is important to look at to assess the health of the processes. Just my.

 

[ralphsulser]

I hate it when managers push this off in totallity to the QMS person. Part of this needs to come from what managers feel is important to look at to assess the health of the processes. Just my.

You are absoulty correct Steel, top management should be establishing KPIs to track and improve.

 

[amariepsu]

You guys are absolutely correct. This was communicated to top management, and now the department managers are all scurrying for ways to measure their performance. I'm trying to help, but everyone seems so lost.

We're starting with measuring on-time delivery only, so I'm asking everyone this question...

"What do you need up front to plan for your dept function? How can you measure your planned estimate vs. actual performance?"

I still feel like we're not getting anywhere. Does anyone have advice on how to measure specifically on-time delivery performance for each area?

 

[Duke Okes]

Does anyone have advice on how to measure specifically on-time delivery performance for each area?

Think cause & effect relationships. What does each department have to do so on-time delivery will be achieved? Or vice versa, what could go wrong in each department that would cause on-time delivery to not be achieved? Managing the processes that impact these Dept Measures (and the drivers for them) will then help ensure that OTD is hit.

Couple of examples:

- Purchasing: Delivery of purchased materials, quality of purchased materials
- Maintenance: Equipment uptime

 

[Bill Pflanz]

Ask the department managers what issues management usually asks about when they have a meeting. Those are your KPI's.

Bill Pflanz

 

[biowassim]

just compare the order date with the delivery date.

 

[Big Jim]

The January 2008 issue of Harvard Business Review has a great article on Key Performance Indicators. It is about 15 pages. If memory serves me correctly, it is titled "Managing the Business Enterprise".

I suggest you get a copy and digest it.