Humberto Avilo of ND Industries described KPI to the Pacific-West Fastener Association as “a metric which measures process performance,” and most importantly, can “trigger changes and improvements.”
KPI – Key Performance Indicators – using SMAART can provide answers to questions such as machine downtime or employee absenteeism, Avilo explained. It can provide answers to customers.
SMAART stands for S (specific), M (measurable), A (actionable), A (aligned with goals), R (relevant) and T (time-bound).
Pac-West panelist Dustin Card of Industrial Threaded Products said KPI provides measurements without which “you are not going to know how to pivot.”
Card recalled the March 13, 2020, official start of the Covid-19 pandemic as “the perfect time to pivot.” The pandemic changed the supply chain.
KPI told users where to start making changes made necessary by the pandemic. KPIs already in use gave companies a starting point.
A KPI system can show “where we started,” Card said. It also can lead to “excitement in the team.”
At Hayes Bolt & Supply, Kelly Cole monitors figures everyday and at least once a year are reviewed by management.
“Set objectives, monitor every month,” Cole said.
Find the problems: Did employees not know which product? Knowing the problem can lead to a solution such as scanners and bar coding. That has led to Hayes Bolt reducing pickers from five to two.
It is important for employees to have the goals, Cole added. It tells them when they are “meeting expectations” and “it keeps them engaged,” Cole said.
It can lead to confirming Hayes got the P.O. and show if “this is on time.”
From a work culture standpoint, KPI encourages employees to “rally around the mission” and “makes them proud of work,” Cole finds.
Avilo emphasized that KPI measuring needs to be adequate, but can’t get “too easy.”
Card noted that goals may need to be changed. “If you need to pivot, then pivot,” he said, noting Industrial Threaded found they could reduce 40 KPI to 15.
Cole said that goals must be “realistic” to help employees “get on board.”
In handling results, “let the numbers be the numbers,” Cole advised. When something is short, it creates “something to strive for.”
“Share the scorecard. The scorecard is important.”
In the case of numbers showing a problem, “go back into why,” Cole said.
When KPI shows a problem to those involved, take any “friction back down to the human level,” Cole advise. “We’re human” and want the entire company working together.
Card said take charge of problems. Card suggested an example know the fasteners a customer has ordered are on a vessel in the harbor, but there are 118 vessels in the port each with eight to 10 thousand containers. Call the customer and tell them, Card advised.
“We pass along that information,” Card said in reference to the recent Covid surge in China slowing ports there.
“Bad news is bad news, but surprise is worse,” Cole added.
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