Goals, Objectives, Performance Indicators and Dashboards Are we headed in the right direction?

Enterprise Level Goals Important, but not part of this talk – Aspirational goals Vision Mission Strategic Goals

Vision and Goals A vision without goals is lame, and Goals without a vision are ineffective at motivating the team

Goals and Objectives: Where are we going? Enterprise Level Goals Mid-level Organizational Goals Shop Floor Goals

Enterprise Level Goals Answer the question: How will we know when we are winning? S.M.A.R.T. Goals S.trategic M.easurable A.ttainable R.ealistic T.ime-sensitive

SMART Goal Examples Enterprise Level Optimize the spread between sales and costs per paid hour Increase sales per employee by 7% 5% increase in ROI annually EBITDA in top 10% of industry annually 10% of sales coming from new products every year

Smart Goal Example Financial Perspective The Spread – sales/hr., Costs/hr. Annual Trend FY 10 mid yr. FY08-mid yr. FY 09 mid yr. FY 11 – mid yr. FY 08 FY 09 FY 10 FY 11

SMART Goal Example EBITDA & EBITDA% of Net Sales (TTM) 14,000,000 12,000,000 10,000,000 3,000,000 6,000,000 4,000,000 26.0% 24.0% 22.0% 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% EBITDA & EBITDA% of Net Sales (TTM)

SMART Goal Example Net Sales/FTE (TTM) 17,300 17,250 17,200 17,150 17,050 17,000 16,250 26,300 16,150 Net Sales/FTE (TTM)

SMART Goal Examples Mid-Level Department Goals Improve on-time deliveries by10% over last year Improve Cash-to Cash cycle by 15 days over last year’s monthly average Achieve 30% gross profit per order Decrease indirect time as a percentage of total by 5% over prior year Increase hours earned by 6% over prior month average Improve inventory turnover rates by .5 times on annual basis

SMART Goal Examples Internal Process Perspective Cash to cash cycle 190 170 150 130 110 90 70 50 Aug 10 Sep 10 Oct 10 Nov 10 Dec 10 Jan 11 Feb 11 Mar 11 May 11 Apr 11 Jun 11 Aug 11 Jul 11

SMART Goal Examples 50 4.5 4.0 3.5 3.0 2.5 2.0 Inventory Turnover Rate

SMART Goal Examples Gross Profit Margin & Gross Profit Margin % (TTM) 25,000,000 24,000,000 23,000,000 22,000,000 21,000,000 20,000,000 19,000,000 18,000,000 17,000,000 Gross Profit Margin & Gross Profit Margin % (TTM) 45.0% 40.0% 35.0% 30.0% 25.0% 20.0% 15.0% 10.0%

SMART Goal Examples Shop Floor Goals Reduce re-work to 1% of direct hours Maintain on-time delivery at 98% Reduce cycle time by 7% over last month’s average Achieve actual hours/standard hours at +/- 3% Maintain average turnaround time at 12 days Reduce work-order backlog to less than 20 per day average All customer quotes delivered within 48 hours

SMART Goal Examples

Goals Translated to Key Performance Indicators Alignment from top to bottom A measurement of performance Measured against a standard or goal Is it really a KEY performance indicator? Something you cannot ignore Tracking KPIs will come at a cost – Don’t overdo it! Pertinent to the user – can user do something about it? Operational, tactical, strategic High level, visual interactive, intuitive, alert to need for action

Building Dashboards – What’s the Process? Form a diverse team of interested executives Define the project goals and desired outcomes Start with Key Performance Indicators (KPIs) Enterprise Department Shop floor Think top to bottom alignment Identify data sources and possible gaps in data Select appropriate dashboard tools

Building Dashboards – What’s the Process? Communicate plans and intended use of the Dashboards Anticipate resistance Perform system integrity and user acceptance testing Monitor use, solicit feedback, improve (continuous process) Add, delete, change KPIs as needed. (you should expect this to occur)

Building Dashboards – What’s the Process? Audit the data to ensure accuracy Evaluate usage Caution – don’t try to do too much too fast Evaluate results – are dashboards driving the desired behavior?

Top Tips for Success in Dashboard Design Design your layout based on how you view your data Create a mock up/proof of concept Design with the end user in mind Create a layout that scales Don’t create a visual that is “too busy” Use summarized data Find a good software solution