A key performance indicator (KPI) is a measurement that bench makers the success soft any particular activity within an organization. The key in choosing KPIs an understanding of what is important to the organization or unit of the organization. What is important will vary widely within organizations. Using a hospital as an example, dietary is always concerned about the temperature of food while a nursing unit, concerned with safety issues, could measure falls. Each vitally important to the organization in terms of patient satisfaction, yet very different because of their role in the organizations do how they deliver service and care to the patient.
Choosing KPI change difficult in the early stages of LEAN implementation. Departments are unsure what constitutes a KPI. The following are some guidelines to follow;
– do you have clearly defined process maps or diagrams of the various processes you manage?
– what are the performance standards for your processes?
– do you have quantitative measurements for the results that you can compare with good ALS or industry standards?
– are you meeting the performance standards?
– if not, do you engage in counter measures to address and correct deficiencies? (there will be a subsequent post covering this topic)
KPIs are quantitative measurements that are used to assess performance. They must be easily understandable, measurable and are important to the department. A key criteria is that the department has direct control of the process and hence the KPI.
Many organizations apply the SMART principle when choosing the KPI. The KPI must be:
S – specific
M- measurable
A – achievable
R – results focused
T – time bound
When KPI meet these criteria, they are something a department can rally around to meet or exceed standards. The KPI should be tracked daily and the results posted on the gemba board.