1. Goals, kpis, operating systems and management report
Maria Asuncion A. Ortiz

2. Defining and Clarifying Key Terms and Concepts

3. A (KPI) Key performance indicator
A KPI is a measurable value
that demonstrates how effectively
an organization is achieving a business objective.
KPIs are used to evaluate success at reaching targets.
Precisely defined KPIs are more measurable,
progress and setbacks easier to detect and track
improvements and savings realizable

4. KPI and business metric
A Business Metric is a quantifiable measure
that is used to track and assess status of
a specific business process.
Every area of business has specific metric to monitor.
Marketers track campaign and program stats
Sales teams monitor new opportunities and leads
Executives look at big picture financial metrics

5. MONITORING Metric AND KPIS
To be useful, KPIs need to be
identified, agreed, monitored and reported on
If KPIs change in real-time, must be monitored real-time
Effective dash boards are critical in this regard.

6. Relevance of KPI and Defining our KPIs

7. Relevance: KPI and defining our kpis
Employees represent both an organization’s
biggest expense and most valuable asset.
To survive and prosper in today’s business,
financial measures are not enough for managing up
non-financial measures are essential

8. Relevance: KPI and defining our kpis
Non-financial performance measures include
speed of response to clients and internal customers
customer satisfaction and brand preference
forward looking measures such as
employee satisfaction
employee retention
succession planning
corporate citizenship to local host environment

9. Relevance: KPI and defining our kpis
KPIs are our company’s measurable goals
this is typically tied to an organization’s strategy
this is essential elements in our performance tools
in Shimizu essential for targets setting and evaluation
and in between the half year evaluations
guides us in our monthly, weekly, daily, hourly grind
it serves us our internal compass - self-directing us

10. achieving goals translated into kpis
Most goals are achieved not by a single person
But by multiple people within and across an organization
Experts agree cascading and aligning goals across
multiple owners creates a shared accountability
vital to company’s success
The company uses the KPI as the foundation
to analyze, track and base key strategic decisions
regarding staffing, resources and use

11. Assigning and Implementing kpis
Implementing KPIS in a balanced manner includes
Company’s vision
Vision translated into measurable operational goals
These are all communicated to employee
These are linked, to individual goals translated to KPIs
These KPIs are monitored, reported and assessed
on an established periodic basis
Internal processes are established to meet or exceed
strategic goals and all-customer expectations

12. Operating System and Performance Management

13. PERFORMANCE GOALS & TARGETS SETTING
SYSTEM CONCEPT
FORECAST
PERFORMANCE GOALS & TARGETS SETTING
Communication
Communication
(VARIANCE)
FOLLOW-UP/
REPORT
PLAN
Communication
ASSIGN
Communication

14. S M A R T SMART GOALS Specific Measurable Agreed Realistic Trackable
Quantity, quality, and time are defined and related
Has a unit of measure
If a person does not agree to work toward the expectation(s), it is NOT his or hers!
It must be a reasonable expectation
Must be able to follow up and report on the results on a regular basis
Specific
Measurable
Agreed
Realistic
Trackable
And, Most Importantly, Must be COMMUNICATED!

15. GOALS ROLL DOWN Top Executive Manager/Mid Managers Supervisor Workers
Plan
Follow-Up/
Report
Assign
Variance
Workers
REVIEW MEETING
Top Executive
Weekly
Shift/Hourly
Daily

16. SMARTER GOALS : OBJECTIVES
Quantity, quality, and time are defined and related
Has a unit of measure
If a person does not agree to work toward the expectation(s), it is NOT his or hers!
It must be a reasonable expectation
Must be able to follow up and report on the results on a regular basis
Specific
Measurable
Agreed
Realistic
Trackable
And, Most Importantly, Must be COMMUNICATED!

18. MANAGEMENT REPORT MANAGEMENT REPORT What‘s in there?
KPI - Key Performance Indicators
by Project, Department
Delegated to Persons in-charge
COMMON KPI
Attainment = Actual / Plan
Productivity = Output / Input
Efficiency = Earned Hours / (Input Work Hours – Lost Time)
Yield = Output Volume / Input Volume
Utilization = Actual Operating Hour / Plan Operation Hour
Earned Hours = Volume * Standard Time
Lost Time e.g. Machine Breakdown

19. MANAGEMENT REPORT WHAT’S THE USE Communications Tool
Key Indicators (Performance, Volume)
Allows you to use facts when you are following-up
Allows you to be proactive in taking corrective and improvement actions
Allows you to CELEBRATE SUCCESS in a timely manner
Allows you to make reference for company audits, claims, defense, strategic planning

20. SAMPLE KPIS ON MANAGEMENT SUMMARY
THE 8 MAJOR DEPARTMENTS
Marketing
Sales
Purchasing or Procurement
Production
Inventory
Quality Assurance
Human Resource
Finance

21. SAMPLE KPIS ON MANAGEMENT SUMMARY
Marketing
% Market share / % Penetration
Pricing
Discounts
Margin
Cost of Sales
Customer service levels
Product Distributions

22. SAMPLE KPIS ON MANAGEMENT SUMMARY
Sales
New business (money / volume)
Existing business (money / volume)
Forecast accuracy
Equivalent visits / day
Number of phonecalls / successful calls
Quota attainment
Geographical coverage
Delivery times
Late deliveries

23. SAMPLE KPIS ON MANAGEMENT SUMMARY
Purchasing
Average credit days
Balance of suppliers (ABC Rating)
Number of tenders
Monthly purchase variance against financial Weekly Operating Cost

24. SAMPLE KPIS ON MANAGEMENT SUMMARY
Production 1st of 2
Planning accuracy / attainment
Hours worked
Overtime hours
Hours earned
Equivalent units produced
Productivity ratios
% Performance / % efficiency
Capacity / machine utilization

25. SAMPLE KPIS ON MANAGEMENT SUMMARY
Production 2nd of 2
Downtime
Bottleneck capacities
% Yield and % scrap
Setup times
Production lead times / throughput times
Internal customer service
Assets management
Energy consumption

26. SAMPLE KPIS ON MANAGEMENT SUMMARY
INVENTORY CONTROL (RAW MATERIALS, WIP, FINISHED GOODS) :
Levels in units / value
Usage of raw material
Weeks of coverage / rotations
Delivery lead times
Critical parts availability
Number of items out of stock
Obsolete stock
Wastage / leakage
% Cost of stock

27. SAMPLE KPIS ON MANAGEMENT SUMMARY
QUALITY
% Failure in Testing of Raw Materials
% Rework
% Scrap
Number of errors / cost of errors
Returns

28. SAMPLE KPIS ON MANAGEMENT SUMMARY
Finance
Founding (availability of money, rotation of assets, etc)
% Added value (marginal contribution)
Profits before taxes
Days outstanding accounts receivables
Days outstanding accounts payable

29. SAMPLE KPIS ON MANAGEMENT SUMMARY
Finance
Budget variances
Interest rates
Credit management ratios (authorized payments conditions)
Specific cost levels (e.g. transport costs) cost)

30. SAMPLE KPIS ON MANAGEMENT SUMMARY
Human Resources
Number of people
% Absenteeism starter leaver net effect
Training indicators
Remuneration indicators (cost per man hour)
Career development indicators
Employee relations and after service indicators

31. Assignment
List all Key Performance Indicators (KPI) that you use to measure and monitor your job and work area performance and success which support the company goals