How to develop key performance indicators for your process



First of all you have to clearly define your commitments to your customer, e.g.:

-          Delivery time within 36 hrs

-          Package conditions, water proof

-          Documents associated to the shipment, certificate of the origin

-          Technical specs, 100 v/ 60 hz

-          Etc.


Secondly, for each commitment you have to measure the effectiveness of the process, i.e. to measure , the planned result against the actual result , in this example how many times you delivered shipments within 36 hr we will call it successful delivery, and how many times you delivered after 36 hrs and we shall call it failed delivery

Your acheivement will be (successful delivery / total delivery) X 100%

Measuring methodology

You have to make sure that you are using the right way to record the event (delivery time in our case), if the commitment related to date & hours , the recording system must measure the event in the format date & time

one of the common mistakes which suppliers are doing is they give commitment to deliver in 36 hrs , and their recording system records only the delivery day without the hour,


The confidence of the measuring system depends in the trust you gain from the organization, for this reason you have to keep the records ( hard copy or electronic) In a way that no one can manipulate them, nor delete them

if you are using a program to calculate the KPI for you, make sure that it doesn’t count the empty data, i.e. if you have a delivery task on 15ht of the month, but the result of the delivery is not recorded, the system must not count this one in the total delivery nor count it as a failed delivery, from my experience while auditing many factories I found out that IT developers are not very smart in mathematics as they are in programming, so take care.



After collecting enough data over a time period, draw it on a suitable chart to see your performance over the time, set a target and take actions to achieve it.