Performance Indicators

A systematic tool to foster 'continuous improvement'
If we want to survive we have to :

• react quickly to changing customer demands
• improve continuously the quality of products
• improve continuously the delivery of products
• reduce the costs

Observations on shop floor:

1. Find performance indicators (e.g. one group looking for Quality indicators, another group looking for Logistic indicators, third group looking for Process Oriented indecators)
2. How are they visualized?
3. Who are using it?
4. Who is/are owner(s)?
5. What is the status?
6. What is the goal?
7. What is your conclusion?

Requirements for Performance Indicators

• The goals of the organization are clear, to the supplier as well as to the customer
• All users accept the P.I.'s as measures
• The P.I.'s yield insight into the state of affairs
• The P.I.'s derived from quantities that can be influenced, or controlled, by the user, alone or in cooperation with others
• Supplier and customer, both users of a P.I. in their own right, agree that given P.I.'s indeed are relevant for customer satisfaction

Technical conditions for meaningful use of Performance Indicators
Good P.I.'s are available on time, with the frequency agreed upon.
P.I.'s have to be consistent, which means that they maintain their significance as time goes on.
If possible P.I.'s have to derived from already existing data.

Setting up a scoreboard : Defining the games we play
Measure the progress in relation to QCDSM

Implementation and use
Performance Indicators are no goal, but a means to an end.
Implementation is sensible only if the organization has decided to go for 'continuous improvement'.

Conclusions Performance Indicators

1. P.I.'s should be well-defined, simple, understnadable and available promptly to their users.
2. The presentation of P.I.'s should be accompanied by an indication of the target to be achieved.
3. Targets have to be challenging but realistic.
4. Upon reaching a target, a new target (more difficult and challenging should be set).
5. P.I.'s should be relevant, i.e. referring to affairs or parameters that are controllable by the recipient of the P.I.
6. 'Supplier' and 'consumer' of the P.I.'s should agree on their relevance and meaning. Preferably, they select the P.I.'s to be used in close cooperation.
7. When implementing P.I.'s, an organization should concentrate on a limited number (say, between five and ten) of the most important indicators.
8. P.I.'s have to be used in combination with each other so as cover all relevant aspects of activity, product or service.