2007-01-22 08:34:37 · 6 answers · asked by Anonymous in Business & Finance ➔ Corporations
Its simply a way of checking how well a manufactuing operation is performing against set targets, and may form part of a supply contract with a customer. You may have targets for quality and on time delivery at you customers for instance, say each is marked out of 100. If all targets are met then you score full points. If you miss deliveries or PPM rates are too high, you will lose points.
2007-01-22 08:41:15 · answer #1 · answered by R Stoofaloh 4 · 1⤊ 0⤋
Beware "business speak"!!!
KPIs are are set goals as measured against set criteria by management - often fairly abritrary and usually constructed in such a way as to shed a positive light on a given aspect of the business which is generally tied in with bonus payments.
In manufacturing specifically, a true KPI would be the percentage fulfillment of orders within the mandated time scale (although this can be engineered/manipulated).Customer satisfaction ratings can be used - but these are also manipulated and engineered to give false positives due to the impossibility of either non-response or a true negative.
For a true KPI one should examine the business in question and it's minimum requirements for sustainability. These should then be weighed against the prevailing economic performance of all other businesses in related sectors... giving a minimum and maximum performance rating at any given time (and one which is, therefore variable according to the prevailing market trends)... this can only be truly administered by an impartial observer .. and is almost never done!!
2007-01-22 16:55:55 · answer #2 · answered by tattooed.dragon 3 · 0⤊ 0⤋
a key performance indicator is a measure of how well a company is doing, we have them at the council i work for and a KPI example is the percentage of enquiries/letters we answer fully within 3 working days, a KPI can be any thing that is relevant and measureable, in industry it might be the number of faulty goods returned, or orders delivered on time etc
2007-01-22 16:41:19 · answer #3 · answered by grahamralph2000 4 · 0⤊ 0⤋
KPI's are usually set by higher end mgmt due to client and company needs. Some examples are production rate, on-time shipping, inventory accurracy.
2007-01-22 19:43:40 · answer #4 · answered by Mariposa 7 · 0⤊ 0⤋
KPI's are usually set by managers and can be anything they like.
For example, it could be percentage of defects must be less than 20%, or number of units made must be at least 50 per day, or low wastage etc. etc.
2007-01-22 16:40:13 · answer #5 · answered by spiegy2000 6 · 0⤊ 1⤋
It could be specific goal and target that measures your progress
2007-01-22 16:42:20 · answer #6 · answered by Anonymous · 0⤊ 0⤋