Beyond cars, dashboards are everywhere these days. Your smartphone alone can provide insights into all kinds of life-related things, including sleep quality, exercise, and even usage of your smartphone itself. And for many things you use or deal with, the metrics you need to understand and respond to are pretty straightforward, so it makes sense to rely on standard measures. If only it were that easy with managing key performance indicators (KPIs) for manufacturing operations. The reality is, however, that manufacturing operations are complex and involve lots of unique processes and business goals, so properly defining and effectively managing your KPIs can be tricky.
When it comes to effectively using analytics to monitor KPIs in manufacturing operations, it’s important to consider best practices on a couple of levels. First, there are the big-picture considerations around things like what you should be focusing on, how often you should collect data and who should act on it. At the same time, you need to understand best practices for defining the KPIs themselves and creating the dashboards that will help you and your teams easily dive into the details. In this post, we explore some big-picture considerations and best practices for successfully using analytics to track and manage KPIs. In a future post, we’ll explore best practices for building dashboards.
Critical KPI management mistakes
Regardless of how you are currently collecting, storing, and reviewing KPIs, it’s easy to make mistakes that impact operational performance. For example, here are some critical errors we see that hold back manufacturing operations:
- Choosing the wrong KPIs—To hit objectives, you need to be asking the right questions and gathering the right data, or your efforts may be wasted.
- Infrequent sampling or collection—Data is gathered and reviewed once a month, once a week or once a day rather than in a timeframe that allows for detection and timely responses to issues.
- Inconsistent recording of KPIs—Teams in different plants use different time intervals to gather data.
- KPI overload—Trying to measure everything without having a handle on the critical few things that are really important to accomplishing key business goals and moving the business forward.
- Failing to share KPIs with the right people at the right time— Without having the right eyes on the data and escalation process in place, issues can snowball into bigger problems fast with little or no time to resolve.
Any combination of these factors can contribute to under-performance from operations but focusing on the right KPIs is especially important to hitting meaningful long-term goals. After all, more data is only better if you can actually act on it in a timely manner. Of course, it’s also important to understand that there are different levels of focus for different levels of the organization. The ability to respond to issues on an hourly, daily and weekly basis is key to keeping strategic goals on track. And the ability to visualize KPIs at the end of the quarter, month or year is invaluable for closing the loop at the regional, division or corporate level.
5 best practices for defining and using KPIs
Here are five things you need to do to effectively define KPIs and maximize the value of tracking them.
- Drive KPIs from the corporate level—KPIs should clearly map to annual and long-term goals and be championed by the senior leadership team.
- Standardize measurements across locations—Whether you have one metric or 25 for quality, safety, productivity and other initiatives you should apply them equally across all of your locations and measure them at consistent intervals. There may be instances where KPIs for a local plant make sense or are needed, but it’s important that they closely align with corporate goals and rules.
- Stay focused on critical matters—When it comes to effectively defining KPIs, it’s important to carefully consider your desired end result along with the best way to measure it so you don’t end up doing extra work that won’t help your cause. For example, if you are measuring how long it takes to retool a machine, and that change only happens once a quarter, it is not likely critical to your operations.
- Communicate metrics across your entire organization—KPIs that are relevant to day-to-day tasks and safety need to be communicated across the entire organization from the executive team to plant operators to supervisors to front-line staff functions like engineering, maintenance and quality. With everyone’s eyes on the prize, the better off your operations will be to achieve higher level goals.
- Rely on daily management tools to quickly act on issues—Seeing KPIs in a timely manner is one thing but acting on them is another. To maximize the benefits of KPI management software, you need to act quickly act on emerging trends or issues. That means you need well defined processes for troubleshooting, tracking and escalating issues as they arise. A good business process management solution, like Dploy Solutions, will help you streamline all of the key tasks.
Up your game with analytics
While effective KPI management is possible without analytics, most complex manufacturing operations inevitably reach a point where they have too much data for humans to efficiently analyze the relationships between KPIs within or outside of your operating unit/facility. At that point, you and your people can look at all kinds of charts, but you won’t necessarily be able to figure out what’s causing product defects or an increase in throughput. And you’ll be wasting a lot of valuable time in the process trying to find the answers in silo’ed systems or spreadsheets. When you can no longer easily identify or make sense of cause and effect relationships, then it’s definitely time for an analytics solution that can do the background work for you. The visualizations from a good analytics solution can provide your people instant answers to important questions in intuitive formats. Or to play off the idiom, a visualization is worth a thousand data points.
Dploy Solutions is business process management software with embedded analytics powered by Sisense, a leading analytics solution provider. The analytics capabilities in Dploy are designed for everyday users rather than data scientists, making them ideal for manufacturing operations. Dploy is unique in that it also includes operations-specific features for helping people create and follow through on countermeasures when they identify issues. The combination of capabilities makes it easier than ever to monitor KPIs and keep strategic goals on track.
Ready to execute your strategic goals faster and better? Contact us today.
VICE PRESIDENT, SUPPLY CHAIN & TECHNOLOGY
Ken is a 25+ year veteran of manufacturing, operational excellence and supply chain optimization. He believes that it is critical for organizations to address the challenges of strategic planning and use of big data in manufacturing. At TBM, Ken is actively leading the effort to our suite of services to include emerging technologies that improve productivity and convert complex data into information for improved decision making.