1. Key Performance Indicators will: Provide performance measurements for all core processes. Add value for our customers and the company. Support company objectives. Provide performance goals for each department. Be owned, maintained, reviewed and acted on by each department. Provide balanced performance measures.

2. Establishing KPI’s Using a SIPOC Diagram

3. SIPOC Diagram? A SIPOC diagram is a Six Sigma tool used to identify relevant elements of a process. It is similar to Process Mapping, but provides additional detail. The SIPOC tool is particularly useful in identifying: Suppliers of the Inputs for the process? The process output requirements. The internal and external customers of the process. The requirements of the internal and external customers?

4. Step 1 -Flow Chart Start by Flow Charting the process. From the 30,000 ft level Only 5 or 6 steps are needed Example: Placing a Purchase Order

5. Step 2 - SIPOC Use a flip chart with headings (S-I-P-O-C) written on it, or. Use post-it notes posted to a wall. Create an area that will allow the team to post additions to the SIPOC diagram. S upplier P rocess I nput O utput C ustomer

6. Step 3-Breakdown the Process Identify the Suppliers of the Inputs of the Process. Identify the Inputs required for the Process to function properly. List the name of the core process. Identify the Outputs of the Process. Identify the Customers that will receive the Outputs of this Process. Discuss with Facilitator, Team Leader and other involved stakeholders for accuracy.

7. Step 4 - Add information to the SIPOC Diagram Example: Placing a Purchase Order

8. Step 5 - Add KPI Information Process Owner Key Performance Indicator Source of Data Measurement Method Established Goal Example: Placing a Purchase Order

9. Completed SIPOC Diagram with KPI Information

10. Action and Follow-up After the process has been broken down and the elements identified using SIPOC. The KPI's can be monitored and acted upon using the model shown below. NOTE: Actions may be taken on the Inputs and / or the process. Controlling the inputs and the process is key in ensuring an acceptable output

11. Connection to Company Objectives On Time Delivery Increase Internal and External Quality Reduce Rework Reduce time to release a Shop Order? Reduce Shop Throughput Time? Reduce time to place a purchase order Reduce time to release shipping documentation? Reduce outgoing defect rates /Final Inspection? Reduce Scrap? Improve Supplier Quality? Reduce defect rate? Faster Service Higher Quality Lower Costs Reduce Waste Reduce Costs due to Shop Order Errors Reduce Non Value Added Process Steps? Reduce Material Usage? Reduce Rework Costs? Reduce time to create a CAD Drawing Company goals Individual Key Performance Indicators Customer Benefits