key performance indicator.doc

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Key Performance Indicators

Key Performance Indicators, also known as KPI or Key Success Indicators (KSI),

help an organization define and measure progress toward organizational goals.

Once an organization has sets policy and defined its objectives, it needs a way

to measure progress toward those goalsobjectives. Key Performance Indicators

are those measurements.

Key Performance Indicators are quantifiable measurements, agreed to

beforehand, that reflect the critical success factors of an organization. and

facilitate.

• Customer focus

• Continual improvement

•

Factual approach to decision making

The following presents the list of possible KPIs guidance to measure the set

objectives against the actual performance.

1. Enhance Customer Satisfaction

KPI Name Customer Satisfaction Index

Description

It is the numerical scale for quantifying customersatisfaction for the finished product using the score againstthe scale set out in the customer satisfaction survey formQF-14-01.

Objective To measure customer satisfaction

Type Quantitative

Unit Percentage

BenchmarkTarget 75%

Assessment

Use Customer Satisfaction Survey. The main requirement

is that survey shall be conducted at certain milestones orat the end of a project.

Refer “QP-13 Customer Satisfaction Procedure” for details.

Possible Tools/resources

Use customer satisfaction survey return form andCustomer satisfaction measurement spreadsheet (QF-14-03)

Analysis of Frequency

After achieving project milestone or at the end of a project.



2. Delivery On-time

KPI Name Delivery on-time

DescriptionMeasurement shows whether the product was delivered tothe customer in the time frame agreed

Objective This KPI is to measure between the contract duration thatformed the basis of the contract bid against the actualproduct delivery.

Type Quantitative

Unit Percentage

Benchmark 90%

Assessment

The following three factors are used for calculating the KPI:the date of start-up of the design phase, the actualdelivery date, and the extension of time that have beenagreed with the client or have been caused by externalfactors. The calculation shall be:

(Contract delivery dates + extension date agreed by theclient) divided by actual delivery dates expressed as apercentage.

Possible

Tools/resources NoneContract agreements, Variations, etc.


After delivery of the product

3. Delivery On-Budget

KPI Name Delivery On Budget

Description

The cost performance index (CPI) is a measure of costefficiency on a project or delivery within budget. It is themost critical Earned Value Measurement metric andmeasures the cost efficiency for the work completed.

Objective To measure the actual cost spent against the proposedbudget

Type Quantitative

Unit Number

Benchmark CPI = 2.5



Assessment

The assessment shall be conducted using earned valuemeasurements. The CPI is equal to the ratio of the EarnedValue (EV) to the Actual Cost (AC). Formula: CPI = EV/AC.

A CPI value less than 1.0 indicates a cost overrun for workcompleted. A CPI value greater than 1.0 indicates a costunder run of performance to date

Possible Tools Earned Value Measurements (PMBOK)


Monthly basis

4. Nonconformity ReductionReducton of nonconformity

KPI Name Nonconformity reduction

Description

The nonconformity reduction shows improvement on

compliance with the standard and/or customerrequirements.

Objective To measure the reduction of nonconformities, and to showthe effectiveness of continual improvement

Type Quantitative

Unit Percent

Benchmark Reduce by 15%

Assessment

The nonconformities reduction assessed based on thenumber of nonconformity dealt with and how they arereduced overtime. Nonconformity dealt either with

corrective action, correction, rework, concession andrelease for work.

Possible Tools Excel spreadsheet, and Pareto analysis/chart


Monthly basis

5. Marketing

KPI Name Marketing Measurement

DescriptionMarketing measurement will assist the management to????

Objective To measure the success of winning a project compared tolost



Type Quantitative

Unit Percent

Benchmark

Assessment The number of invitation to bid will be assessed against the

number of wins, lost and declined invitation.

Possible Tools Excel spreadsheet, and analysis chart


Yearly

6. Employee Turnover

KPI Name Employee Turnover

Description

Turnover rate is a calculation of the number of employeeswho have left the company and it is expressed as apercentage of the total number of employees. Althoughturnover rate is usually calculated and reported as apercentage per year it can be for different periods

Objective To measure the employee turnover, and finding ways andmeans in managing the turnover issues

Type Quantitative

Unit Percent

Benchmark You have to see existing baseline and set a realistic target.

Assessment

Employee turnover rate assessed by dividing the numberof employees who left by the total number of employees at

the beginning of the period. This number is expressed as apercentage. the calculation may cover voluntary turnover,involuntary turnover, and total turnover

Possible Tools None


Yearly

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