Beyond KPI’s

Working Together or in Silos

Working Together or in Silos

In the asset management world measuring performance through the right KPI’s is important, focusing on the results of the asset management processes and adjusting regularly to the trends seen on the dashboards is vital to continuous improvements.
However it is not enough just to focus on the KPI’s, one always needs to be aware of what is behind the KPI’s, what behaviours KPI’s are driving and what is the ultimate goal for the business as a whole.

Example:
A batch production process breaks down, it is a small component that is relatively easy to change, just takes a few hours to do. However, the spare part is not available in stock and it will take 2 weeks to get that spare part. Luckily, they have two exactly the same types of processes side by side and the production batch cycles allow for the part to be taken from one manufacturing process and installing it on the other process while the batch preparation is done. Thus not affecting the production and delivery of the product is without any production losses noticeable.
So the Maintenance Supervisor adapts to this situation and had a Maintenance Technician perform the switch regularly keeping the production, as well as the customer, happy because production went as planned.
However when focusing on the maintenance KPI parameters this results in an increased Break Down Maintenance over the 2 week period, as they needed to move the part from one process to the next in line with the batch production cycles. This also resulted in non-compliance to part of the PM program, as the maintenance technician did not have the time to do all the planned PM’s because of the added Break Down Maintenance. It can also be assumed that because the PM’s where not done that could result in further unforeseen breakdowns.
The Maintenance Manager comes to the Maintenance Supervisor not happy with his decision, because he monitored the KPI’s and could see that the Maintenance KPI’s, noticeably the break down KPI and PM compliance KPI where not trending in the correct direction.
After weighing the options and understanding the story behind the KPI’s development the Maintenance Manager agreed that out of a bad situation the Maintenance Supervisor selected the best possible path.
Conclusion:
If everyone is focused on a single dominating goal, it is less challenging to adjust to situations as described in the example here above, as long as we understand the underlying attributes that affect the KPI’s developments.
However in a silo situation where there might be tension between the silo’s (e.g. production vs. maintenance). In that case the example might have developed in a different way, i.e. half the production down for 2 weeks because of a failure where the spare part cannot be delivered for 2 weeks, the maintenance KPI’s would suffer a bit (one break down) but the production KPI’s would suffer even more.
Food for thought:
Is there a clear understanding in your organization for the why’s of the decisions that are made, i.e. are there clear governing goals?
Do you sometimes sacrifice your goals for the greater governing goals? And are you recognized for that?
I welcome your feedback and discussions below this Blog post.

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4 thoughts on “Beyond KPI’s

  1. The one that is frustrating to me is storeroom/procurement KPI’s focused on reducing costs – which may lead to reducing inventory. They aren’t focused on uptime nor measured on connection of their policy on uptime.

    Also, great to see you are writing again.

    Cheers,

    Fred

    • Thank you for your comment Fred, I’m happy to have found a bit of time to write a Blog. It’s been way too long.

      The KPI’s around Storeroom/Procurement are a constant struggle, it’s always very hard to find the balance for the needs of Maintenance vs. the need from a Financial aspect.

      The biggest challenge being the “what if” factor, i.e. “what if” this component breaks and we don’t have the item on stock. Another difficult challenge is the “when will”, i.e. when will we need to change this item out.

      We have a lot of tools today that we can use to help us mitigate and approximate the “what if’s” and the “when will’s” but the exceptions that are not caught are usually the ones everyone remembers, unfortunately.

      Great comment Fred and thank you again for contributing to my Blog and your great effort’s in continually writing your Blog. I am impressed with the quality of your material and the diligence in your continuous writing.

      All the best, Bjarni

  2. Hi, good to talk! most difficult I think is defining RAM kpi’s relevant to your business and doing so efficiently. In marine the issues are similar but different, I wondered if you had come across a general rule to define relevant kpi’s and then to test their relevance? Long time due – nice to see you back – my blog is also a lttle due for updating and man have we got some good copy to share!

    • Hi Danny,

      Nice to see you.

      My rule of thumb is to have KPI’s cascading and you also have to consider the short term vs. the long term and what the trade off’s are that you are willing to sacrifice.

      There is for sure no easy way to do this and it takes a considerable effort to do this well. On top of everything priorities can change quickly and often you find yourself on square 1 again. We live in a agile environment with client and company specific issues and priorities that often don’t match!

      I’m happy to be back and actually I have started to Post on LinkedIn directly now and moving my blog post bit by bit. I have not yet decided if I will continue both here and on LinkedIn, will see how it picks up. For now I will have both ongoing, would be good if I could export all the great comments to LinkedIn as well… but I diverse!

      Thank you for your comment Danny, I look forward to reading your post when you get around to posting again.

      All the very best, Bjarni

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