Examples of KPI
From the book, “An Introduction to KPI Management in Two Hours: KPI Practices Directly Linked to Goal Achievement. Examples of specific KPIs will be discussed.
First of all, the key to setting KPIs is that “KPI themes must be linked to management results. Management here refers to “the methodology of making the best use of management resources (people, goods, and money) to generate corporate profits,” and its objectives can be summarized as follows
To secure business performance, sustain the company, and protect employment (from the perspective of the company and its employees)
To contribute to society as a public institution through customer satisfaction and distribution of results (from the perspective of investors and society).
In order to achieve this, the following seven steps will be implemented.
Step 1: Ground management resources (people, goods, and money) firmly in the ground.
Thoroughly implement 8S (Seiri, Seiton, Seiso, Seiketsu, Seiketsu, Seiketsu, Seiketsu, Seiketsu, Seiketsu, Seiketsu, Seiketsu, Seiketsu, Seiketsu, Seiketsu
Practice the skill equation: Goal x Skill x Process x Motivation. All employees should have goals (KPI), practice skill improvement, and improve processes.
Establish the pillars of the three elements of customer satisfaction (Q: quality, C: cost, D: delivery)
Continue to gain customer satisfaction by providing quality products and services by turning knowledge back into action.
Customer satisfaction leads to corporate profits, which can be used to pay taxes, dividends, internal reserves, bonuses, and reinvestment.
Repeat continuous improvement
The trick to setting KPI themes is to consider whether the process (activity) is an “end or a means” and whether it is a “result or a cause. The important thing is not only to list only the means in the KPI theme, but also to show the activities (causes) of the efforts, and the important thing is the results (whether the original purpose was achieved and how the results are linked to management accounting). The easiest target to set is the “monetary” target value.
The following is an example of setting a theme for some departments.
- Amount of orders received: ○ yen or more per month (Sales)
- Amount of sales: ○ yen or more per month (Sales)
- Lost order rate: Less than or equal to ○% (Sales)
- Maximize the crossover ratio (gross profit x sales volume): ○% (sales)
- Number of quotations prepared, number of days quotations are answered, number of orders received (Sales)
- Production output:○ yen per month (production)
- Manufacturing cost ratio (by product):○% or more/year (production)
- Marginal profit ratio, yield ratio, loss ratio (production)
- Reduction of non-value-added time/shortening of lead time (production)
- Number of internal errors, amount of internal error loss, number of near-miss counts (production)
- Labor productivity improvement(HR)
- Labor cost investment rate (HR)
- Violation of various laws and regulations (Legal)
- Optimization of inventory levels (Finance)
- Cost down amount (Finance)
- Shorten new product development period (R&D)
- Number of development cases (R&D)
- Reduction of manufacturing cost by design (R&D)
- Strict adherence to design man-hours (R&D)
- Reduction of man-hours lost in the schoolyard due to design errors (R&D)
A concrete KPI example is also an example of an actual business problem, and it is a hypothetical concrete example of information that can be used in the scene of new technology development.
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