Every manufacturer has instituted key performance indicator (KPIs) metrics intended to establish baseline performance levels and monitor efforts for improvements. Individual KPIs are often championed by one segment of the organization and can and do often result in incremental improvements.
KPIs: More than Indicators
The focus on individual KPIs within sub-segments of the organization, however, often fail to recognize the interaction between distinct business groups and processes. Worse yet, the KPIs are paper charts on the wall with little impact. How do you make sure that the entire organization is really affecting the overarching business objectives? How do you make sure that your KPIs deliver impact and are not just indicators?
The first step is an honest evaluation of what kind of impact you hope to receive from monitoring your indicator. An honest and repeated discussion should occur across organizational lines about what the value associated with each KPI mean.
Evaluating the Impact You Want from Monitoring Indicators
In an open environment, these discussions can be enlightening in a number of ways. First, the group may want to rethink the purpose of any measurement where trending values don’t have a clear corresponding action. Secondly, the discussion between departments concerned with the “why” around a specific KPI can often be a very real step in organizational alignment. When everyone can articulate the rationale for cross-organization KPIs then true collaboration is possible. The “I” in KPI can be transitioned to stand for “Impact.”
There will still be plenty of systemic work to do and deploying end-to-end business solutions that foster this discussion will still be critical. QAD is committed to enabling our customer’s journey toward becoming the Effective Enterprise. Start building the collaborative approach that will support your operational demands and growth initiatives and lead your company to operational efficiency. Download the white paper to learn more.