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SMART KPIs. Characteristics of good KPIs. 1. Simple 2. Practical 3. Specific 4. Measurable 5. Attainable 6. Relevant 7. Time-bounded 8. Dynamic 2. “Simple” easily understandable and not sophisticated “Practical”

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characteristics of good kpis
Characteristics of good KPIs

1. Simple

2. Practical

3. Specific

4. Measurable

5. Attainable

6. Relevant

7. Time-bounded

8. Dynamic

2

slide3
“Simple”

easily understandable and not sophisticated

“Practical”

easily workable and get to the point

“Specific”

‘Reduce expense’ is definitely not specific KPIs should

detail what expense specifically to be reduced, electric

or traveling expense or….etc.

“Measurable”

From previous example KPIs must also be specified the target of the reduction, such as reduce electric bills down10%.

“Attainable”

KPIs must be attainable and also challenging. If target is set too low or too high staff may be de-motivated.

“Relevant”

KPIs must be relevant to Organization targets so everyone is heading to the same target same direction

“Time-Bounded”

Indicate when the target should be reached so staff know how much time they have.

“Dynamic”

change overtime and benchmarking

3

slide4

Classification of KPIs

  • Efficiency / Effectiveness
  • Common / Corporate / Functional
  • Positive / Negative
  • Balanced Scorecard
  • 4.1 Lag indicator / Lead indicator
  • 4.2 Financial Perspective / Customer Perspective/
  • Internal perspective / Learning Perspective /
  • Growth Perspective
  • 5. Value Chain
  • 6. Strategic /Non-Strategic
  • (Technical or Administrative)

4

slide5

The Generic Value Chain

FIRM INFRASTRUCTURE

M

HUMAN RESOURCE MANAGEMENT

Support

activities

A

TECHNOLOGY DEVELOPMENT

PROCUREMENT

R

G

OUTBOUND

LOGISTICS

MAKETING

AND SALES

SERVICE

OPERATIONS

INBOUND

LOGISTICS

I

N

PRIMARY ACTIVITIES

5

slide6

Productivity

  • Efficiency
  • Quality-Uniqueness

6

strategic positioning
Strategic Positioning

7

Cost

Differentiation

relationship
Relationship
  • KPI
  • Target
  • Benchmarking

8

benchmarking
Benchmarking
  • Competitive
  • Non Competitive
  • Internal
  • Generic (best practice)

9

slide11

VISION

SWOT

SWOT

MISSION

Objective

Strategy

Action Plan

SWOT

11

slide12

MISSION

SWOT

SWOT

Objective

Strategy

Action Plan

12

SWOT

slide13

Cases in Vision and Mission

Case 1 : New Port News Shipbuilding’s

Mission Statement

“ We shall build good ships here – at the profit if we can

– at the loss if we must – but always good ships. ”

13

slide14

Case 2 : Maytag Corporation’s Mission

“ To improve the quality of home life by

designing, building, marketing, and servicing

the best appliances in the world.”

14

slide15

Case 3 : Harley Davidson’s Vision and Mission

Vision

“Harley Davidson,Inc. is an action-oriented,international

company, a leader in its commitment to continuously improve

our mutually beneficial relationships with stakeholders

[ customers, suppliers,employees, shareholders, governments

and society ]

We believe the key to success is to balance stakeholders’

interests through the empowerment of all employees to focus

on value-added activities.”

15

slide16

Case 4 : วิสัยทัศน์และพันธกิจของปตท.

VISION The leading petroleum exploration and production company with operational excellence, international best practices, and world-class competitive strengthsMISSIONTo conduct our core business by operating and investing in petroleum exploration, development, production, and strategic related business in Thailand and overseas

16

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Case 5 :Starbucks’ Mission Statement

“ Establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principle while we grow ”

  • Six Guiding Principles :
  • Provide a great work environment and treat each other with respect and dignity
  • Embrace diversity as an essential component in the way we do business.

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Case 6 : Vermont Teddy Bear’s Mission Statement

“The Vermont Teddy Bear provides our customers with a tangible expression of their best feelings for their family, friends, and associates. We facilitate, communicate,and therefore participate in caring events and special occasion that celebrate and enrich our customers’ life experience.

Our products will represent unmatchable craftsmanship balanced with optimal quality and value. We will strive to wholesomely entertain our guests while consistently exceeding our external and internal customer service expectations.

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Harley Davidson

“ More Than A Motorcycle ”

“ Fulfilling Dreams ”

Vermont Teddy Bear

“ A Lifetime Emotional Symbol of Love and Care”

Starbuck

“ Third Home ”

Carnival

“ Funship”

19

slide20

Maytag Company

  • Mission
  • - Developed in 1989 for the Maytag Company : “ To provide our customers with products of unsurpassed performance that last longer,need fever repairs , and are produced at the lowest possible cost.”
  • - Updated in 1991 : “Our collective mission is world class quality.” Expands Maytag’s belief in product quality to all aspects of operations.

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2. Objectives

  • “To be profitability leader in industry for every
  • product line Maytag’s manufactures.”
  • Selected profitability rather than market share.
  • “To be number one in total customer
  • satisfaction.”
  • “To grow the North American appliance
  • business and become the third largest
  • appliance manufacturer (in unit sales) in
  • North America.”

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-To increase profitable market share growth in

North American appliance and floor care

business, 6.5% return on sales, 10% return on

assets, 20% return on equity, beat competition

in satisfying customers, dealer, builder and

endorser, move into third place in totals units

shipped per year.

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3. Strategies

- Global growth through acquisition and alliance

with Bosch Siemens.

- Differentiate brand names for competitive

advantage.

- Create synergy between companies, product

improvement, investment in plant and equipment.

23

slide24

Policies

  • - Cost reduction is secondary to high quality.
  • - Promotion from within.
  • - Slow, but sure R&D: Maytag slow to respond to
  • changes in market

24

slide31

Strategic Objective :

“Develop the competencies needed to support the sales process”

  • Strategic Outcome
  • Measure
  • (Lag indicator)
  • Revenue per Employeeor
  • Sales per Salesperson
  • Performance
  • Driver
  • (Lead indicator)
  • Strategic Job Coverage Ratio
  • Strategic Initiative
  • Redesign the Staff Development Process1. Identify strategic jobs2. Build competency profiles3. Assess current staff4. Forecast requirements5. Identify gap6. Build staff development plan

31

slide33

Financial Perspective

Strategic Themes

Growth

Business Unit Strategy

Sustain

Harvest

33

the customer perspective core measures
The Customer Perspective - Core Measures

Market Share

Customer Acquisition

Customer Profitability

Customer Retention

Customer Satisfaction

34

the customer value proposition
The Customer Value Proposition

Generic Model

=

+

+

Value

Product/Service Attributes

Image

Relationship

Functionality

Quality

Price

Time

Example : Retail Banking

Value Proposition

Product / Service Attributes

Image

Relationship

Breadth of

Offering

Error

Free

Seamless

Services

Knowledgeable

Convenient

Personal

Advisor

Responsive

Strategic Measures

* Service * Request

Failure Fulfillment

Index Time

35

the customer value proposition tier i rockwater
The Customer Value Proposition (Tier I) - Rockwater

Product / Service Attributes

Image

Relationship

Functionality

Quality

Price

Timeliness

Professional

Management

Relationship

* Safety * Minimum * Hours * Meeting Schedule * Honesty and Openness

Revision of Worked of Contractor * Engineering Submitted * Timely Submission

Service Procedures * Value for of Procedures * Flexibility

* Quality and Money

Awareness of * Contractual

Performance * Innovativeness Responsiveness

* Standard of to Reduce Cost

Equipment * Team Rapport/

Provided Spirit

* Quality of

Personnel

* Production

Quality

36

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The Internal - Business - Process Perspective -

The Generic Value Chain Model

Postsale

Service

Process

Innovation Process

Operations Process

Customer

Need

Identified

Customer

Need

Satisfied

Identified

the

Market

Create the

Product/Service

Offering

Build the

Products/

Services

Deliver the

Products/

Services

Service

the

Customer

The Internal - Business - Process Perspective -

The Innovation Process

Postsale Service Process

Innovation Process

Operations Process

Customer

Need

Identified

Customer

Need

Satisfied

Identified

the

Market

Create the

Product/Service

Offering

Build the

Products/

Services

Deliver the

Products/

Services

Service

the

Customer

37

the learning and growth measurement framework
The Learning and Growth Measurement Framework

Core Measurements

Results

Employee Retention

Employee Productivity

Employee Satisfaction

Enablers

Staff Competencies

Technology

Infrastructure

Climate for Action

38