The reasons KPIs (Key Performance Indicators) work so well is that they can provide you with a focus for improvement. If you have more than 7 KPIs, however, you probably just have a range of metrics instead.
This isn’t a problem. You just need to be happy with this statement. The letter ‘K’ in KPIs implies that these are the handful of measures that you want to focus on to make a difference to your business.
So, how does this help you to improve your on time delivery performance?
Many businesses have an on time delivery metric, such as OTIF (On Time In Full), as part of their KPIs. This is great as an outcome, but what if you want to measure something that will help you to deliver on time rather than just tell you that you failed (or won)?
Each function and level of an organisation can have their own KPIs. That means that everyone can have their own five to seven key measures that will help them to improve. Simply put, if you work in an operational role and want something that works for you then you can have something that works for you. You don’t have to accept the corporate KPIs only.
The reason for writing this post is that I got into this very conversation today. Many years ago I ran a production facility that made bespoke components for the power generation sector. Our performance was shocking when I first took over the helm (with my colleague, the other Production Manager). The lead time through the plant was about 19 weeks. The OTIF score was floating around the 20% mark and yes, you’ve guessed it, our customers weren’t happy.
After many fights (you can read about them here!) we changed a number of our processes and focussed on just five things:
- How many jobs were stuck at their stage of manufacturing (effectively an internal OTIF measure).
- The overall lead time through production (trended over a rolling three month period).
- The final OTIF score (rolling average over three months also).
- Weekly safety and 5S scores.
- Ensuring that the capacity buckets weren’t being overloaded by sales.
Just like driving a car, I wasn’t focussed on all of the details that I didn’t need to focus on. If a ‘hazard light’ came on I would dive into the details then, resolve the issue and then return to my ‘business as usual’ stance.
Within three months our OTIF score came up to an average of 98%. Our lead time dropped to just under four weeks and we became known as the ‘go to guys’ for bespoke power generation components. Our turnover soared from £10M per year to £30M without any additional staff. From a Lean manufacturing perspective it was a dream job.
We made a range of operational changes to our business, but our focus was on the five items listed above. It made our days easier; we knew what was important so that we could make swift decisions. We kept on talking about the same things, so our journey become normal to everyone.
The results speak for themselves. If you are feeling as though your journey to high levels of OTIF (without the ‘blood, sweat and tears’) is not on track then considering narrowing your focus and hammering the few things that count.
This journey isn’t always easy. If you want some additional ideas or tools to help your journey then check out The OTIF Improvement System.
Is it time to narrow your focus?