How to align a Business Strategy to Operative KPIs

Q

QAMTY

#1
Hi everybody

While tunning kpis in a manufacturing plant, trying to make it more productive (that kpis really be tied to profits and margin)s, several doubts came up.

Starting..

In my case, defined the policy, the objectives, and for objectives, several kpis for all the processes, but have doubts how tie them directly.

Maybe like a formulae

Profit = kpis (in production, sales, storage, maintenance, etc)

quality = kpis ( in production, inspection, etc.)


I have seen lot of businesses have an ISO just because a client asked them to have it if they be part of suppliers.

But I see, that they manage the business (profits, margins) separated from the ISO.

I mean they have apart (not into iso) the margins, profits,roi, etc.
but suchs aspects are not tied directly to operative kpi´s.


In my point of view, for a business to be profitable, all these issues must be managed together.


I have heard of Kaplan (scoreboard) which consider all the aspects
financial, processes, personnel, clients.


Please share your point of view in this regard

Thanks
 
Elsmar Forum Sponsor

howste

Thaumaturge
Super Moderator
#2
Re: How to align a business strategy to operative kpis?

In my point of view, for a business to be profitable, all these issues must be managed together.
I completely agree. For a long time I've promoted the integration of quality and business policy, objectives, and metrics. I posted this document here in 2008: https://elsmar.com/Forums/attachment.php?attachmentid=9623

I have used this over the years as an example of how to tie the policy, objectives, and metrics together. You can see that profitability and efficiency are included even though they are not generally considered as "quality" objectives. Well before ISO 9001:2015 required top management to demonstrate leadership by "ensuring that the quality policy and quality objectives... are compatible with the context and strategic direction of the organization" it made sense to merge quality and business needs. The part you don't see in the table is that the metrics are also tied to effectiveness of the various processes of the system.
 
Q

QAMTY

#3
Re: How to align a business strategy to operative kpis?

Thanks Howste

Really, really, Very interesting document.

Could you share other paper accompanyng to this one.

of course not compromising confidenciality.

Or guide me where to find a book or any other stuff

Thanks
 

howste

Thaumaturge
Super Moderator
#4
Re: How to align a business strategy to operative kpis?

I just use turtle diagrams along with this for each process, and a process map showing the interactions between the processes (which is in the quality manual).
 
Q

QAMTY

#5
Re: How to align a business strategy to operative kpis?

Howstle, thanks,let me try it.
Ideally, I can imagine a software with dashboard,with graphics,where dinamically we can simulate the business,lets say if I need this profit,what is the kpi I need in production to obtain it,or what is the maximum rejects of bad product,etc.of course simulated with available data from the business (rejects, cost man hour, cost of energy, maintenance,etc.) I Think I can try some software on the market.
Thank you so much
 
Q

QAMTY

#6
Re: How to align a business strategy to operative kpis?

Howste
In your example, in the next:

through the use of efficient processes->Efficiency ->Production efficiency ->92% by 12/31/08

My question are:
1-You defined this objective to be reached by 12 31 08, and will be revised until you reach that date, ok? in order to be modified, but into the timeframe will not not be changed nor monitored?
2-By managing "production efficiency" you expect to manage this objective, ok?
but for production efficiency,this will be supported by:
I think, defining kpis on production processes,quality control process,etc., and these kpis will be monitored each month maybe, but only these kpis, it does not make sense to monitor objective, since this result is derived from the kpis.

Is it correct my assumption?
Thanks
 

Big Jim

Super Moderator
#7
Re: How to align a business strategy to operative kpis?

Howste
In your example, in the next:

through the use of efficient processes->Efficiency ->Production efficiency ->92% by 12/31/08

My question are:
1-You defined this objective to be reached by 12 31 08, and will be revised until you reach that date, ok? in order to be modified, but into the timeframe will not not be changed nor monitored?
2-By managing "production efficiency" you expect to manage this objective, ok?
but for production efficiency,this will be supported by:
I think, defining kpis on production processes,quality control process,etc., and these kpis will be monitored each month maybe, but only these kpis, it does not make sense to monitor objective, since this result is derived from the kpis.

Is it correct my assumption?
Thanks
First of all, if there isn't a goal attached, it isn't a quality objective. By definition, a goal IS an objective. And quality objectives need to be measurable.

There is nothing wrong with quality objectives and kpi being aligned so they do double duty.
 

howste

Thaumaturge
Super Moderator
#8
Re: How to align a business strategy to operative kpis?

1-You defined this objective to be reached by 12 31 08, and will be revised until you reach that date, ok? in order to be modified, but into the timeframe will not not be changed nor monitored?
The intent is that by the date specified (hopefully) the goal will be met. But objectives are intended to help the business, so they can be adjusted any time that the business needs to adjust them. If business conditions change in a way that the goal is no longer realistic, then the company could change the date or the number to be met. Of course if the number is met before the date, it could be revised upward.
 
Thread starter Similar threads Forum Replies Date
G PolyWorks Alignment Issue - How to align the part General Measurement Device and Calibration Topics 1
M Informational TGA – Several proposed changes to classification to better align with the EU MDR Medical Device and FDA Regulations and Standards News 0
F How to Align a Software Consulting/Contract Firm to ISO 13485+14971 & 62304 ISO 13485:2016 - Medical Device Quality Management Systems 1
D Does 7.6 Control of Monitoring and Measuring Equipment align with ISO 17025 ISO 17025 related Discussions 4
A One company, more plants, different procedures..how to align them ? Document Control Systems, Procedures, Forms and Templates 9
S How to align our global ISO 9001 procedures to each specific project ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 22
J FPDS now GPDS - How does GPDS align with the 23 elements of APQP APQP and PPAP 8
H Expanding our business and the implications to our QMS Manufacturing and Related Processes 2
Richard Regalado Top 10 operational risks of 2019 for business continuity planning Business Continuity & Resiliency Planning (BCRP) 6
M ISO 9001:2015 8.2.1 Contingency Plan required for small Business? ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 7
Nicole Desouza ISO / AS Certification - Small business with less than 100 employees ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 7
R Supplier evaluation and business needs in the context of ISO 13485 ISO 13485:2016 - Medical Device Quality Management Systems 2
M Informational Australia – TGA business plan 2019-20 Medical Device and FDA Regulations and Standards News 0
M SOP Sample for BC/ISO22301 (Business Continuity) wanted Business Continuity & Resiliency Planning (BCRP) 4
M BCM (Business Continuity) and BPM in a company with an IT System Business Continuity & Resiliency Planning (BCRP) 0
A Brazil: Termination of business relations with BRH – what happens to registrations? Other Medical Device Regulations World-Wide 1
Jen Kirley Conway Business Services LLC - Jen Kirley ISO 14001:2015 Specific Discussions 0
J Business Intelligence and 21 CFR Part 11 Compliance Qualification and Validation (including 21 CFR Part 11) 1
G Anyone working with or planning to do business in the CBD (cannabidiol) industry? US Food and Drug Administration (FDA) 1
M Supplier Management outsourcing - Business idea Supplier Quality Assurance and other Supplier Issues 8
T AS9100 Maintain Approval When Business Ownership Changes AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 8
WCHorn US Citizen Traveling to Mumbai for Business Travel - Hotels, Motels, Planes and Trains 4
S New to the automotive business and VDA VDA Standards - Germany's Automotive Standards 5
R Process Mapping for a BPMS (Business Process Management System) vs ISO Process Maps, Process Mapping and Turtle Diagrams 1
F BREXIT - What/How are You and Your Business Preparing for It? EU Medical Device Regulations 20
P Suggestion for QMS platform solution + Business process automation Software Quality Assurance 3
A Should we do business in the automotive sector? IATF 16949 - Automotive Quality Systems Standard 7
F Business expanding - Campus vs Multi Site Certification Structure AS9100, IAQG, NADCAP and Aerospace related Standards and Requirements 4
P Definition Business Type - Definition of what we do-Business Type Definitions, Acronyms, Abbreviations and Interpretations Listed Alphabetically 4
A What does a good business practice Process Audit look like for AS9100D? Process Audits and Layered Process Audits 9
S Internal Audits performed by another local business ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 26
R Business Benefits from IATF 16949 QMS IATF 16949 - Automotive Quality Systems Standard 4
S Business development and support - Getting business general liability insurance Career and Occupation Discussions 5
J Business Impact Analysis SOP Business Continuity & Resiliency Planning (BCRP) 2
B Seeking for an example or a template of a Business Plan Service Industry Specific Topics 3
Q Is ISO 9001 fully enough to manage a business? ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 19
supadrai d/b/a doing business as and the FDA US Food and Drug Administration (FDA) 1
J Business Continuity - ISO 22301 BCMS Strategic and Tactical Objectives Business Continuity & Resiliency Planning (BCRP) 3
M Are Critical Business Processes Assets that need to be included in Asset Inventory? IEC 27001 - Information Security Management Systems (ISMS) 1
N Organization Treating One Business as an Internal Supplier Supplier Quality Assurance and other Supplier Issues 3
Q Suggested KPIs for a Manufacturing Production Business ISO 9000, ISO 9001, and ISO 9004 Quality Management Systems Standards 1
J ISO 17025 Guide and Ideas for a New Calibration Business ISO 17025 related Discussions 18
S Importer and Registered Place of Business in EU EU Medical Device Regulations 1
L Implantable Medical Device Manufacturer Going Out of Business - Complaints EU Medical Device Regulations 2
S Acquisitions and Joint Ventures (Business Development Department) and ISO 13485 EU Medical Device Regulations 3
R Still confused on OPRP and CCP in an ISO 22000 Catering Business Food Safety - ISO 22000, HACCP (21 CFR 120) 3
F Which Business Function should Approve Suppliers and maintain the ASL Supplier Quality Assurance and other Supplier Issues 8
Ninja Getting eaten by Big Business - My company was bought by a huge multinational Coffee Break and Water Cooler Discussions 54
S SQM (Supplier Quality Management) - Centralized or divided per Business Group Benchmarking 0
3 Brasil: OEM Medical Device Business - Product Design Customization Other Medical Device Regulations World-Wide 6

Similar threads

Top Bottom