Monday, April 2, 2012

Have Your Corporate Metrics Become a Time Sponge?

The corporate quest to standardize metrics can become a time sponge absorbing countess hours and distracting facilities from the real focus of bottom line performance improvement.  Today's blog is about discovering how to keep KPIs from soaking up all of your precious time and focusing on driving changes in behavior not just the numbers.
There are metrics and Key Performance Indicators (KPI) standardization efforts happening all over the world. They are happening in plants and corporate offices as well as within organizations such as The Society of Maintenance and Reliability Professionals and the European Federation of National Maintenance Societies. Many of these groups and other authors have spent endless pages defining these metrics. While I believe their work is incredibly valuable for individual facilities to understand their current state, what I commonly see is the documents they produce only lead to further internal corporate argument. Some companies have spent years and countless hours on the quest to define metrics like Overall Equipment Effectiveness (OEE) even with the standards that already exist in the market. It becomes a discussion of what time goes into the calculation, what time is out, what speed is the best demonstrated throughput, how do we define quality product and so on. At the end of the day an apples to apples comparison of different sites can be tough if the metric cannot be pulled from a standard data source such as the ERP, EAM, or Profit and Loss (P&L) statements. The EAM data is also suspect unless many of the steps of the business processes have been standardized from site to site to provide consistent data.  I believe one solution is to get it close but don't take the effort to argue through all the details and then compare sites on a delta basis. So instead of reporting just your percentage OEE or any other metric, report and focus on the change in the value from quarter to quarter or month to month. If we all agree that the goal is to improve then let's compare the efforts to improve not just the numbers. If one site is able to increase their OEE by a full point in one quarter then do an RCA to understand why and learn from them. What behaviors have they changed? What processes have they refined? Focus on the Root Cause of Success and spend the time making behavioral change not debating corporate metrics. Wring out the time sponge and get back hours to devote to real results.


  1. Good morning Shon:
    As we whittle through 21 KPI's to determine the 15+ we want to use; I can use your blog to stress the importance of limited KPI's and how behaviors are important to driving the correct amount of lagging KPI's. Seeing is believing, how long it takes to maintain the dash board for 15+ "maintenance level" indicators. I guess you can use the lagging to say "I said so". But to use them to change "leading" behavior is the key.

  2. Shon:
    From my humbled experience leading Plant Reliability I have learned that lagging KPI's or Factor KPI's should only be established after there is a clear vision and mission for achieving the Leading or Result KPI. Indicators are very simple task once everyone is in alignment. If they are not, then they become "key drivers" instead of "key indicators". “Key Drivers” have a tendency to become green regardless of performance. Whichever KPI is chosen it must be used to recognize success or align resources to get them back on track. I strongly believe that KPI is critical to success, but are easily used negatively.