Lean Tip
#3481 – Consider General Business Goals When Setting KPIs
The first
step when creating a successful KPI system should be to look into your general
business goals, as this will help you understand which elements should be
included in your system. It is very likely that your goals will involve several
areas and departments. Therefore, sitting with various stakeholders and
discussing these objectives will help narrow down strategies and pick the right
indicators to measure.
Lean Tip
#3482 – Implement Tools to Unify Your KPIs
One of
the greatest challenges when building one of these systems is getting
everything together for analysis. Online dashboard tools make this possible by
providing a centralized view of all your most relevant KPIs to make informed
decisions considering the full picture.
The value
of this KPI system is not only that it unifies all aims into one location, but
its visual nature makes it easy to understand at a glance. The likelihood of
reaching a target is depicted in a range of colors so that you can easily see
the status of the different initiatives.
Lean Tip
#3483 – Examine Industry Standards and Benchmarks
Another
key means of implementing an effective KPI system is by exploring industry
standards and benchmarks. Conducting data-driven research in your niche or
industry will help you refine your smart KPI goals to ensure your aims or
benchmarks are realistic as well as progressive.
Carrying
out competitor research is a good way of understanding what standards or
targets other brands within your sector are working towards when it comes to
activities related to sales, marketing, fulfillment, inventory management,
logistics, and more.
Online
research will also give you a clear indication of industry-wide benchmarks
related to various processes. Naturally, you will base your benchmarks on your
current performance—but cross-checking everything against industry standards is
always good practice.
Lean Tip
#3484 – Work With Visualizations That Offer Consistent Value
Another
important consideration when working with KPI goals and objectives is to ensure
every visualization within your system offers consistent performance-boosting
value.
With a
unified view of your KPI target visualizations, you will be able to drill down
deeper into each metric to ensure it represents your data in a way that offers
a clear-cut objective insight into your processes and progress. If there are
any charts or visuals that you find misleading or redundant (offering very
little in the way of performance-boosting insight), you can omit them from the
system or replace them with something more suitable.
During
this phase of the process, you should ask relevant stakeholders within the
business to test each KPI and offer objective feedback on their value. Doing so
will ensure that everyone in the business benefits from your newfound visual
benchmarking and tracking initiatives.
Lean Tip
#3485 – Ensure Accessibility and Collaboration
Collaboration
is key when it comes to dealing with relevant KPI data. Your business goals
attain various departments that need to stay connected to build cohesive
strategies based on the general company vision. With traditional means of
communication, such as static Excel sheets or PowerPoint presentations, the
topic of accessibility and collaboration becomes a hardship due to the static
nature of these tools.
That
said, a well-thought-out system should consider collaboration as a basis.
Luckily, various online reporting software has been developed to allow users to
easily share their KPIs from any device with an internet connection. The online
nature of these tools ensures a collaborative environment thanks to real-time
access to data.
Lean Tip
#3486 – Review Any Targets Made as a Team
Once
you've set your KPI goals, review those targets with the team. Targets have a
higher chance of succeeding if the entire team agrees on them and understands
what the expectations are. If a target isn't realistic or attainable, then it
won't be helpful when setting expectations for how people work together towards
achieving those goals in the future. Listen to any feedback and discuss viable
alternatives.
Lean Tip
#3487 – Audit Any Progress and Adjust
Review
progress and adjust targets as necessary. Set a time limit for each KPI, then
review your progress at the end of that period. If you don't meet your target,
adjust it to reflect reality and try again. You may find that an interim review
is also helpful in this step, especially if there are multiple performance
indicators involved. For example, instead of reviewing all goals annually or
quarterly, consider checking progress every six months and adjusting
accordingly. Make sure the new targets are realistic after adjusting the
previous ones.
Lean Tip
#3488 – Establish a Time Frame
Define
the time frame for achieving each KPI goal. This means ensuring they're
realistic and achievable. Some targets may be quicker to achieve than others,
so track each target individually and record any interim deadlines. Doing so
allows you to measure and compare your progress against previous successes and
keep track of results. Confirming that all parties agree on this time frame
helps ensure a smoother process.
Lean Tip
#3489 – Establish How Often You Collect Data
Another
key consideration is how often you aim to collect your insights. The frequency
of data collection is usually appropriate to the KPI and is consistent with the
organization’s culture and processes. For example, if a company sets up monthly
meetings with all employees to discuss their performance metrics and goals,
then it's likely that this schedule will continue for subsequent months as
well.
If an organization
doesn't have such regular meetings in place and instead relies on its managers
or supervisors to set goals for their teams, then collecting metrics on a more
ad hoc basis may make more sense, such as every few weeks.
Lean Tip
#3490 – Align All KPIs With the Company's Values
It's
beneficial to ensure that the KPIs you set align with a company's values. If an
organization has a strong culture of innovation, for example, consider creating
a KPI related to consistently developing new products or services. Similarly,
if the company's goals focus on reducing costs, you'd likely benefit from
setting targeted KPIs around reducing expenses but only as long as these goals
don't conflict with other key aspects of the business, such as serving
customers.
Lean Tip
#3491 – Get the Whole Team on Board
To get
the greatest advantages out of Lean, the entire organization should adopt and
promote its practices, and extend its influence to suppliers as well. You must
involve the people who are the closest to the work and you must get support
from senior management as well.
Lean Tip
#3492 – Take a Lean Tour
Sometimes
we learn best by first witnessing the success of others. See the benefits of
lean in action. It is not difficult to find organizations that will allow you
to see their lean implementations (referred to as the Gemba walk). Take
detailed notes of what is highly effective in their Lean implementations, ask
questions, and get as much valuable information as you can in order to help you
formulate you own Lean strategy for implementation.
Lean Tip
#3493 – Discard Conventional Fixed Ideas
Part of
problem solving is thinking “outside of the box.” Encourage fresh perspectives
and ingenuity in your team in order to develop innovative ways to forward Lean manufacturing
without changing what is already efficient and successful. With such a rapidly
evolving climate in manufacturing, sometimes conventional thought is what leads
to the problem in the first place!
Lean Tip
#3494 – Don’t Just Talk About it, Do it!
Once you
have a Lean strategy in place, put it into fast and thorough action. Naturally,
implementation is what ultimately yields results and improvement. The last
think you want is to devise and formulate a Lean campaign that then sits on the
shelf and collects dust. Run with your Lean plans as soon as you have
everything nailed down.
Lean Tip
#3495 – Concentrate on Bad Processes, Not People
By
concentrating on the processes and building continuous improvement, you will
have the culture change that you are looking for. Also, correct mistakes
immediately. Don’t wait for the next shift, the weekend or maintenance to do
it.
