How Can KPIs Drive Progress in Your Organization?

How Can KPIs Drive Progress in Your Organization?

By Discovery Lean Six Sigma

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How Can KPIs Drive Progress in Your Organization?

98It’s easy to collect information about the way your organization is running, especially nowadays with the help of modern technology. And yet, collecting too much data without actively thinking about what exactly it represents, can quickly lead to problems with productivity and more. You have to know how to identify the data points that really matter and focus on them exclusively, and that’s the whole reasoning behind the idea of KPIs – or Key Performance Indicators.

Identifying the KPIs of Your Organization

Simply put, a KPI is a factor that holds a lot of weight in determining the current status of your organization. It’s highly dependent on the specific type of work that your company does, and every organization needs to develop its own set of KPIs, even between two companies in the same industry. Correctly identifying those points and focusing on them in your data collection and analysis is an important first step to ensuring that your organization is managed in a lean way.

The most basic example of a KPI is the output rate of the production facility. How many products are you putting out each day? What about each week or month? Collect that data and have it available in an easily accessible way, and soon enough you’ll start to see some patterns opening up in front of you.

Another good point for analysis is the downtime of different components of the organization. This includes both people, machines, tools, and entire departments. If a certain part of the company is spending a lot of time in wait, this could indicate an underlying issue that’s not immediately visible through other KPIs.

Working with an Up-To-Date List

As the organization evolves and grows, the list of its KPIs will change, sometimes frequently. It’s important to keep evaluating the current operations of the company and keep the list up to date, otherwise you’re not only going to miss out on some potential improvements, but you may very likely end up in a situation where you’re working against the benefit of the organization without even knowing it.

Sometimes old KPIs will become obsolete and irrelevant as the company’s operations are changing, and that’s fine. You don’t have to keep every point on the list forever, and in fact, this will probably start to be a bit detrimental to your ability to make sense of all this information at some point. And on that note, you should definitely think about the way you’re using modern technology and how you can utilize it to better evaluate the data you’ve collected.

Harnessing the Potential of Modern Technology

When you’re working with a lot of data, most of which is numbers, you can benefit a lot from using a modern digital solution to wrangle all of those bits. A well-designed database schema, for example, can allow you to easily locate the critical pieces of data that you need in your research, and it can help you aggregate the data you’ve collected through your operations as well.

You can also use modern gadgets all around the production floor to ensure that you’re tracking the performance of all machines and workers correctly, although it can take some time to set that system up correctly, and it can be expensive too, depending on the size of your organization and the way your operations are structured. If you’re in doubt, get a consultation from an expert with a lot of experience in this area and let them set up this aspect of the organization for you, as a mistake can end up being quite costly.

Conclusion

Understanding KPIs and how to analyze them correctly can have a huge impact on the way you’re running your organization. When you know exactly what you can expect from each action you’re taking, and know how it should impact the whole system of the organization, this can help you be much more confident in developing the company and pushing it forward with each new choice you’re making. But, as we said above, it’s also quite important to ensure that your KPIs are always kept up to date, as otherwise you may start making wrong decisions without even realizing it at some point.

 

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Original: http://www.shmula.com/how-can-kpis-drive-progress-in-your-organization/24218/
By: Shmula Contributor
Posted: October 28, 2017, 3:37 pm

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