What ambitious brands need to knoW about key performance indicators (kpis) for production: a brand point management perspective.ExEcutivE Summary

in the production phase of branded materials, errors and inefficiencies always have root causes; key performance indicators (commonly known as kpis) help you locate and identify those causes and give you the facts you need to correct them. kpis foster collaborative analysis among the brand owner and all production supply-chain partners to promote efficient and effective processes – and to improve and innovate on them continuously.

but of course, that’s what kpis are supposed to do for almost any process in almost any kind of industry. Where the production of branded materials is concerned, the key questions are, “What are the right kpis and how can you implement and act on them?” surprisingly, many brand owners aren’t as clear on the answers as they should be. they’re missing a huge opportunity. this paper will help provide those answers.

2

Wha

t am

biti

ous

bran

ds n

eed

to k

noW

abo

ut k

ey p

erfo

rman

ce in

dica

tors

(k

pis)

for

pro

duct

ion:

a b

rand

poi

nt m

anag

emen

t pe

rspe

ctiv

e.

What do KPis achiEvE for thE Production ProcESS?

in short, kpi data leads to insights that encourage concrete steps to process improvements that increase a brand’s efficiency, agility and faithfulness to standards. simultaneously, these improvements decrease errors, time to market and costs. specifically, these process improvements can include:

• Better briefs. inefficient brands have poorly conceived and vaguely written briefs that result in senior-level involvement in the production process at a later stage than is optimal. effective kpis facilitate a deeper understanding of communication priorities, which leads to better briefs.

• Better communication hierarchy. this leads to improvement in fewer jobs fast-tracked, fewer revision cycles and faster approval time.

• Greater visibility of projects in the pipeline. this drives process efficiency and flexibility.

in contrast, companies with weak or no kpis suffer from:

• Lack of benchmarks to measure against

• Limited data to quantify performance

• Little or no supply chain visibility

• Weaknesses in efficiency, agility and brand fidelity, and the resulting bottom-line detriments

SEEinG thE valuE of KPis Within thE Brand oWnEr’S oPEration.

Within brands, sometimes the departments of marketing and procurement have different value priorities. this doesn’t need to be the case with kpis. When decision-makers align to common values across domains, they see the mutual benefits.

brand owners should be interested in how briefs are developed and how clear, concise and effective they are. procurement typically wants to drive costs out of the process. both teams benefit from tracking the activities we will suggest below. at most brands, procurement puts out rfps and pricing matrices; but these are only the first stage of brand process management, relating to the basic costs of materials and services. these don’t shed light on a brand’s effectiveness in:

• the on-time delivery of materials at each stage in the production supply chain

• the accuracy of materials as they’re produced and copy as it’s deployed on those materials – a key issue where regulations are concerned

• the preservation of the brand values and equity that are represented in all materials

these benefits are not what the brand is paying for, strictly speaking, from their production partners, and there is no line item for these in any rfp or pricing matrix. but kpis make it clear how the brand and its production partners need to function to achieve these benefits – and then kpis measure performance toward them. marketers and procurement people simply need to agree on this.

3

Wha

t am

biti

ous

bran

ds n

eed

to k

noW

abo

ut k

ey p

erfo

rman

ce in

dica

tors

(k

pis)

for

pro

duct

ion:

a b

rand

poi

nt m

anag

emen

t pe

rspe

ctiv

e.

incorPoratinG KPis.

the basic steps in incorporating kpis are quite logical. but the devil is sometimes in the details. there are independent consultants who advise brands on this process; also, larger production firms can offer this service as part of their overall delivery. this second option has the logical advantage of streamlining communication. regardless of who oversees the process, the key steps are:

• identify what to measure and what the measurements should tell you. here you are building a hierarchy of production activities you want to measure and an understanding of how they relate to your ultimate goals of efficiency, agility and accuracy of materials through optimized briefing, review and approval processes.

• determine the best ways to gather and measure the information. although some kpis are basic, some can be arduous to track if the brand lacks the tools, technology or resources – for example, if the brand does not use an electronic communication routing tool, or if its tool is inferior to one available from a production partner. ultimately there must be a tool or mechanism to capture data on the activities measured as part of the kpi.

• determine baseline performance goals. What levels of performance for the production activities will translate to the overall goals you’ve set?

• articulate and interpret the findings and translate them to actionable measures. this step is fairly straightforward when the previous steps have been handled effectively.

4

Wha

t am

biti

ous

bran

ds n

eed

to k

noW

abo

ut k

ey p

erfo

rman

ce in

dica

tors

(k

pis)

for

pro

duct

ion:

a b

rand

poi

nt m

anag

emen

t pe

rspe

ctiv

e.

Which KPis Should you tracK?

many brands focus on the “base level” kpis listed immediately below. the first two may be important in tracking what has been done, but they provide limited forward-looking value; the rest provide insight into process, technical or organizational issues and are more valuable for driving improvements.

• spend in production art, premedia, adaptive creative (historical)

• spend by substrate, flexible packaging, carton packaging, aluminum (historical)

• project duration time (process/technical/organizational)

• rework cycles (process/technical/organizational)

• incoming errors (process/technical/organizational)

• on-time performance (process/technical/organizational)

for a more effective program, schawk has identified a standard set of eight kpis that add value to the process of managing brands. you will see that these promote an analysis of core workflow processes and point to solutions for problems that are uncovered.

• number/percentage of jobs fast tracked/rushed at some point in the schedule. this helps uncover risks to quality and consistency and helps determine if pricing is fair to both client and production partner. this also allows the production partner to forecast demand for services more accurately and can indicate when smart-sourcing is a good idea.

• number of revision cycles and their drivers. here, typically, there’s a comparison of the revision cycle numbers between brand teams or portfolios. When there’s a difference in the sample groups, their respective processes are analyzed for evidence of problems, including flawed briefs, too little project visibility, too little involvement of higher-ranking mangers early in the process, etc.

• client approval time. disparities between products or categories can signal flaws in the client’s approval process and point up the need for better workflow technology.

• Production cycle time. this can give the first indication of inefficient processes.

• the average cost per job relative to total spend. projects with similar scopes and deliverables can be compared for insights.

• number/percentage of jobs done right the first time. this is a crucial baseline kpi that speaks to the quality of processes and communication.

• number/percentage of incoming errors on design files. this can help to start pinpointing the source of workflow issues upstream.

• overall on-time performance (and a subset of this, cycles relative to service agreement). this kpi can be slightly more difficult to outline. measuring “on-time performance” requires a hard start date and delivery date; when these are fluid, it’s difficult to achieve consensus.

5

Wha

t am

biti

ous

bran

ds n

eed

to k

noW

abo

ut k

ey p

erfo

rman

ce in

dica

tors

(k

pis)

for

pro

duct

ion:

a b

rand

poi

nt m

anag

emen

t pe

rspe

ctiv

e.

SEEinG KPis throuGh to thEir BEnEfitS.

brand owners must take a few steps to ensure that kpi data is translated into concrete actions and continued improvements. several steps are key:

• make sure there’s a steering committee or leadership team that performs a regular (for instance, quarterly) business review. Without a formal venue and scheduled meetings, kpi data will be reported but not acted on. the steering committee must see to it that information and recommendations are delivered to marketing, marketing services or procurement, and that concrete plans are made.

• the brand owner must be committed to long-term, sustainable relationships and to letting production partners collaborate with marketing and other key players within the brand. this allows procurement to do its job of sharing information without assigning blame.

• the process of the steering committee driving the results down through workflow-chain partners in creative and production is vital, especially in the first year.

SchaWK, KPis and Brand Point manaGEmEnt.

schawk is a strong proponent of collaborating with clients on kpis that give insight into the client’s own processes and the processes shared with schawk, to drive the benefits discussed above: agility, efficiency, cost savings and branded materials that adhere to brand standards and regulatory demands.

this collaboration – and this focus on optimizing processes that cross multiple disciplines, departments and partners – is innate in schawk’s delivery of brand point management for its clients. brand point management is the integration of services across brand lifecycle stages, across service areas and across geographies to promote the benefits touted throughout this paper: agility, efficiency, cost savings and branded materials that are compelling and consistent. and for schawk, insight into the power of kpis is integral to its delivery of brand point management.

a KPi SPEcific to SchaWK

the health of a production relationship depends on many factors beyond those measured by traditional kpis – such as whether the production partner is knowledgeable, engaged, responsive. so for many clients, schawk performs surveys of our delivery of key services. We survey everyone we work with on an account – as many as 80 people, including our contacts at other partners, such as printers. the results are statistically significant. We share these findings with the overall brand team at regular business meetings. this is something brands should expect from a production partner.

6

Wha

t am

biti

ous

bran

ds n

eed

to k

noW

abo

ut k

ey p

erfo

rman

ce in

dica

tors

(k

pis)

for

pro

duct

ion:

a b

rand

poi

nt m

anag

emen

t pe

rspe

ctiv

e.

schawk, inc., (nyse:sgk), is a leading provider of brand point management services, enabling companies of all sizes to connect their brands with consumers to create deeper brand affinity. With a global footprint of more than 40 offices, schawk helps companies create compelling and consistent brand experiences by providing integrated strategic, creative and executional services across brand touchpoints. founded in 1953, schawk is trusted by many of the world’s leading organizations to help them achieve global brand consistency. for more information about schawk, visit www.schawk.com.

visit www.brandsquare.com, powered by schawk, to participate in a one-of-a-kind, exclusive online marketing community. registration is fast, free and easy. as a registered member, you’ll have access to news and trends from leading blogs, magazines and webcasts. you will also be able to ask questions and join threaded discussions on hot topics. all this and more is at www.brandsquare.com. follow brandsquare on twitter at twitter.com/brandsquare.

© 2010 schawk, inc. all rights reserved. no part of this work may be reproduced in any form without written permission from the copyright holder. schawk is a registered trademark of schawk, inc. the schawk logo is a trademark of schawk, inc. bLue is a trademark of schawk, inc.