Last week we released a blog on the benefits of using KPIs to monitor and improve supply chain performance. This time, I thought we’d take it a step further and share our thoughts on what we think is important to consider when creating and implementing KPIs throughout your supply chain.
Get buy-in from the people you’re monitoring
Monitoring performance may represent a significant cultural change for some organisations and it is important not to forget this! Ensure that you gain buy-in from the workforce you are measuring, keep them informed of the data you are measuring, why you are collecting this data and how you plan to use it.
Clearly define your KPIs
It is vitally important that you clearly define your KPIs from the outset so that everyone knows exactly what they are looking at. You can avoid confusion by making sure that all of your key stakeholders are involved in sign-off. Ambiguity will undermine the value of your KPIs so don’t be afraid of getting specific in the definition process. This will allow you to focus on what the numbers are telling you and not get into debates about what the numbers are meant to represent.
Don’t have too many!
The temptation may initially be to track literally everything, but it is important to keep the number of KPIs manageable. Overwhelming people with data may have an adverse effect on decision-making by actually slowing the process down. You’ll probably start with a large number of KPIs, but always take the continuous improvement approach and look to narrow these down to small number which actually measure the true performance of your supply chain
Ensure the whole supply chain is represented
When designing your KPI dashboard it is important to ensure that you have represented all sections of your supply chain. Remember to start right at the beginning with your suppliers and work all the way through to the customers receiving your goods and services, ensuring all key aspects have a clearly defined KPI.
Data quality is key!
It is absolutely crucial that the data feeding into your KPIs is accurate. Calculating the KPIs is the easy part, but ensuring data quality can often be more challenging. Using in-accurate data to inform key strategic decisions can have the potential to put your business in danger. So make sure you test your KPIs with sample data!
Automate your dashboards
When you start building a dashboard or a KPI suite you will probably have to spend a lot of time in Excel pulling data from various locations. However, once you’ve got everything to a stable state you should try to move away from manual KPI reporting and automate your dashboard either through Excel or a reporting system. Automation will allow you to move your time away from data collection to data analysis.
Implementing KPIs is often easier said than done. In Nine Feet Tall’s experience it is crucial to do it right to ensure that what you’re reporting is both accurate and ready to be received by your audience. In our next and final blog on KPIs we’ll be looking at how you can use them to identify and resolve issues, and drive improvement.
