What is Key Performance Indicators (KPI)

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KPI is short for Key Performance Indicators, and are the parameters that show how well a company, department, project or individual employees are performing compared to their objectives and targets. These are monitored and reported on a continuous basis to measure progress and the effect of continuous improvement activities.

KPI Selection

There is no KPI selection that can fit all, so some research is needed to determine which ones are appropriate for your industry and business. The KPI’s should reflect the overall strategy of your business, and should help you meet your targets.
Some common mistakes seen are selecting what is easy to measure or what everyone else uses. Another scenario is not understanding which ones are the vital few, and collect vast amount of data not useful for decision making.

KPI Examples

Below are some examples of KPI’s, but the key is to define the KPI’s based on your business strategy, so they can help navigating the business and show what status It is in.

  • A customer service centre could for example have costumers average waiting time to get answered as a KPI or percentage of issues solved within 1 min.
  • A production line in a manufacturing plant could have a KPI related to scrap cost or downtime of a machine.
  • A website host could have monthly down time of costumers sites due to maintenance.
  • A department could have employee satisfaction as one of their indicators, as a satisfied employee is more engaged in their work on delivers better results.

A Key Performance Indicator must be accurately defined and measurable in order to add value. For example for a KPI “Reduce Scrap” in a manufacturing site, you need to define if you measure in in amount of parts or value of parts, will reworked parts be included, is it only scrap due to internal processes that is included, or should scrap related to supplier issues be included as well.

If you would like to implement and effectively use KPI’s within your business, we are able to provide consultant support. Please contact us for a free quote with no obligations.

Alternatively you can continue to our quality training page to see our available courses.

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Key Performance Indicators (KPI)