KPI's Training Pack
description
Transcript of KPI's Training Pack
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Key Performance Indicators - KPI’s
Training Pack
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Target Audience : Site Management to Team Leaders
Purpose of Module :To ensure employees have the skills to quantify impact, and provide timely direction for an individuals contribution ( at all levels) towards achieving overall business goals
Aims & Objectives :• How to define & measure our given business goals• Why have KPI’s • How clarity of objectives improves motivation and delivers performance• Standardised approaches to KPI’s• How to translate and cascade KPI’s at all levels• Explain links to Performance Management
Aims & Objectives
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Course Outline
•INTRODUCTION
•WHAT ARE KEY PERFORMANCE INDICATORS?
•CHARACTERSITICS OF A GOOD KPI
•EXAMPLES OF KPI’S
•THE KPI CASCADE PROCESS
•HOW TO CREATE AND MANAGE KPI’S
•SUMMARY
3
Key Performance Indicators
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• Name
• Department
• Length of service
• Knowledge of
Key Performance Indicators
Introductions
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Flip Chart
What are KPI’s
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•TO COMMUNICATE STATUS - ACTUAL v TARGET• PLANT LEVEL• BUSINESS LEVEL• WORK STATION LEVEL
•TO DRIVE IMPROVEMENT BY FACT NOT GUESSWORK
•TO HELP PRIORITISE IMPROVEMENT ACTIVITY
• A CONTINUAL HEALTH CHECK FOR THE BUSINESS
•TO CONNECT THE CUSTOMER TO THE PROCESS
WHAT ARE KPI’s FOR?
Key Performance Indicators
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ESSENTIAL
• IMPORTANT TO THE VIEWER
• VITAL - AFFECTS THE BUSINESS
• CUSTOMER FOCUSED
• DRIVES IMPROVEMENT
Key Performance Indicators
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USEFUL
• CURRENT - UP TO DATE
• EASY TO UNDERSTAND
• IMPORTANT AND RELEVANT
• VIEWER CAN CONTRIBUTE• HAS A STAKE• CAN HAVE AN EFFECT (good and bad)
Key Performance Indicators
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• URGENCY / OWNERSHIP
• RESPONSIBILITIES DEFINED
• DYNAMIC IMPROVEMENT PLAN
• AUDIT PROCESS - ACTUAL V’s PLAN
• CLEAR OBJECTIVES
IMMEDIATE
Key Performance Indicators
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• GROUP OF METRICS• NOT EVERYTHING WE MEASURE IS A KPI !
• STATISTICS•THESE CAN HELP DEFINE KPI’s
• WORK MEASUREMENT
• A TOOL FOR BLAME
• WALL PAPER
WHAT ARE KPI’s NOT?
Key Performance Indicators
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• DYNAMIC• WELL MANAGED - ROTATE VITAL FEW• OWNED AND OPERATED BY LOCAL TEAM
• SIMPLE• EASY TO UPDATE - MANUAL
• VISUAL• LOCATED WHERE EASY TO SEE• CHANGES JUMP OUT AT VIEWER
• ENGAGING • RELEVANT - CREATES TALKING POINT
• STANDARD FORMAT• EASY FOR OUTSIDER TO UNDERSTAND
• FEEDBACK RECORDED AND ACTED UPON
CHARACTERISTICS OF GOOD KPI
Key Performance Indicators
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Business KPI’s
• Safety Performance
• Quality Performance
• Cost Performance
• Delivery Performance
• People Performance
Key Performance Indicators
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Defects Per Assembly
0
100
200
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600Ju
l
Sep
t
Nov Jan
Mar
May Ju
l
Sep
Nov
Machining Sub Assy Assembly
Test 2001 Target
Target Improvement
Actual PerformancePlotted Against Target
Legend EasyTo understand
Visual Indicatorof
Performance Trend
Examples
Unambiguous Title
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RED
• Outside of target with no improvement or deteriorating trend.
AMBER
• Inside of target but with deteriorating trend.• Outside of target but with improving trend.
GREEN
• Inside of target with improving or level trend.
RAG Colour Coding
Examples
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Scrap Cost 2004
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JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
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. O
f It
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Scrap Cost Scrapped Items Budget
YTD Scrap Cost: £34.0k
Examples
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Schedule
0%10%20%30%40%50%60%70%80%90%
100%
Stage 1 Stage 2 Stage 3
How are we doingagainst the plan?Are we on target?
Examples
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External Supply Schedule Adherence
0%
20%
40%
60%
80%
100%
23 24 25 26 27 28 29 30 31 32 33
Supplier 1 Supplier 3 Supplier 5Supplier 2 Supplier 4
What are we aiming for?
Examples
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WIP
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Nov 99 Jun 00 Sep 00 Oct 00 Nov 00 36951 37043
£ '0
00
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Sto
ck T
urn
s
WIP Value Product A WIP Value Product BWIP Budget Stock Turns
Examples
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130
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DAY
DATE
SHIFT
Hrs Achieved / Hrs Planned x 100% TAKT ADHERENCE
Examples
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Examples
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&
Step 1 - Team Leaders manage the Key Drivers of performance
• Are we fully manned to complete the workpackages?
• Is overtime under control?
• Are we hitting targets (Minutes to complete Operations)?
Step 2 - Manager holds daily Team Leader review by work package• Actions timely and focused • Support given when needed
Stage 1 Jig Board
Minutes to
complete Op 1
Minutes to
complete Op 2
Manhours (Shift B)
2, 000
2, 200
2, 400
2, 600
2, 800
3, 000
3, 200
J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec
Step 3 - Assembly Managers review Weekly Performance withManagers.• Cost accountability introduced. Focus on shift by shift performance.
Performance Management Cascade
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&
Stg 01 Cost Per Set
40
45
50
55
60
65
70
75
80
85
90
J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec
P er iod
Direct Indirect NPO Disruption Budget Forecast
Stg 01 Hours per Set
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29
WeekAdded Value Out Of J ig T r aining
Disr uption - E xter nal Disr uption - Inter nal Budget
For ecast (Lean)
Step 4 - Head of Business reviews Weekly Performance• Good informed debate resulting from upward cascade of Team Leaders’ performance
• Countermeasure plans if targets not being met
Stg 01 Build
40
60
80
100
120
140
160
180
YTD 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
Week
(1. 2)
(1. 0)
(0. 8)
(0. 6)
(0. 4)
(0. 2)
0. 0
0. 2
0. 4
0. 6
0. 8
1. 0
Week Var iance to 32.1 Week Var iance to 32.1 Ref r esh
Cumulative Actual Cumulative Budget 32.1
For ecast 32.1 Ref r esh
Production Volume
0
50
100
150
200
250
300
350
J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec
-2
-1. 5
-1
-0. 5
0
0. 5
1
1. 5
2
Period Variance (32.1) Period Variance ForecastCumulative Actual Cumulative Forecast
Hours per Set
2,000
2,500
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
J an Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec
Stage 1 Stage 2Stage 3 FALDisruption OBPForecast
Cost Per Set
0
50
100
150
200
250
J an Feb Mar Apr May J un J ul Aug Sep Oct Nov DecActual Disruption
Budget (32.1) Forecast
Step 5 – Senior Management Team reviews Monthly performance
• Senior level escalation plans.
Performance Management Cascade
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&
Summary - All Categories
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
160,000,000
180,000,000
200,000,000
-1,500,000
-1,000,000
-500,000
0
500,000
1,000,000
1,500,000
Monthly +/1 Forecast +/- to budget Cumulative actualCumulative budget Cumulative forecast
Step 6 - Site Cost Performance consolidated. Manufacturing Director reviews Factory Manager Performance.• Forecasts of cost performance compiled to ensure corrective actions taken to achieve “Budget”.• Risks & Opportunities monitoring and control.
Performance Management Cascade
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Flip Chart
What KPI’s do you think would be applicable to your area
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IdentifyCustomers
and Suppliers
FormImprovement
Teams
CreateImprovement
Plan
Train Users
Monitor ProgressTo Plan And TakeCorrective Action
Form Team
Determine Performance
Drivers1
Identify ownersand users
Score & PrioritiseKEY
PerformanceIndicators
Define LocalPerformance
Indicators
Develop FormatAnd Review
Process
Collect Data
PLAN
Continuous
Improvement Cycle
DOCHECK
ACT
How to Create and Manage KPI’s
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Score & PrioritiseKEY
PerformanceIndicators
IdentifyCustomers
and Suppliers
Determine Performance
Drivers
Form Team
Define LocalPerformance
Indicators
How to Create and Manage KPI’s
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&
Score & PrioritiseKEY
PerformanceIndicators
Define LocalPerformance
Indicators
Ease of recording dataImpact on businessFrequency of occurrence
How to Create and Manage KPI’s
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IdentifyCustomers
and Suppliers
Form Team
Determine Performance
Drivers
Score & PrioritiseKEY
PerformanceIndicators
Define LocalPerformance
Indicators
Develop FormatAnd Review
Process
Identify Ownersand Users
How to Create and Manage KPI’s
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&
30292827 L262524232221 H201918 G17161514 B13121110987 A654321
1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7
A GB HC ID JE KF L
M
Blue Shift = TWOwner: Red Shift = DJ
Location: X:\Broughton\A340-600\Lean Manufacturing\Stage 00\Std Documents\Lost Hours KPI
LOST HOURS (UNPLANNED WORK) PRE & POSTKPI : Key Performance Indicator
Unplanned Absence
28 29 30 31
Tooling
Internal
Days
LeanHandling
OSS
Week
SupplierLogistics
Engineering
MCC
Shop Support
MaintenanceTrefnTAC
QualityMSE
1
2
3
4
5
Example
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IdentifyCustomers
and Suppliers
Form Team
Determine Performance
Drivers
Identify Ownersand Users
Score & PrioritiseKEY
PerformanceIndicators
Define LocalPerformance
Indicators
Develop FormatAnd Review
Process
Train Users
How to Create and Manage KPI’s
![Page 31: KPI's Training Pack](https://reader038.fdocuments.in/reader038/viewer/2022102608/55396aff4a79598f768b498e/html5/thumbnails/31.jpg)
IdentifyCustomers
and Suppliers
CreateImprovement
Plan
Train Users
Form Team
Determine Performance
Drivers
Identify Ownersand Users
Score & PrioritiseKEY
PerformanceIndicators
Define LocalPerformance
Indicators
Develop FormatAnd Review
Process
Collect Data
How to Create and Manage KPI’s
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CreateImprovement
Plan
Train Users
Form Team
Determine Performance
Drivers
Identify Ownersand users
Score & PrioritiseKEY
PerformanceIndicators
Define LocalPerformance
Indicators
Develop FormatAnd Review
Process
Collect Data
FormImprovement
Teams
IdentifyCustomers
and Suppliers
Monitor ProgressTo Plan And TakeCorrective Action
How to Create and Manage KPI’s
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KPI - examples TargetQuality
Defects(Defects per unit)Errors(errors per unit)
DeliverySchedule adherence(Hours delta to plan)Cycle Time(Hours per Unit)
Cost Manning(man hours per set)(Cost per unit)
PeopleSkill LevelTraining Hours
0 delta (nil Hours behind or ahead of plan)
To be agreed
1 Defects per unit
2 errors per unit
270 hours per unit
£5,000 per unit
Key performance indicators need to be simple and focused
75% people trained to Practitioner Level40 hrs per man per year
Typical KPI’s
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•Direct relationship to business plan
•Communicates progress against plan
•Drives continuous improvement
•Visual - provokes a response
•Effective - simple and easy to understand
•Ownership - relates to everyone
•Up to date - dynamic management
SUMMARY
KPI’s