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BUILDING A TEAM
BASED KPI?

(by Choong Ewe Lee)
(choong@brainperformance.com.my)

   
 
     
 

A few years ago, I was engaged by a Manufacturing Company at the business revenue of $300 million/annum to review & structure their company-wide KPIs till Departmental Level. When I first reviewed their exiting KPI for respective department, I found that their KPI were well set up. While I use the TQM approach to assess their Departmental KPI, something caught my attention. The Sales Department has set target at $300 million; The KPI of Production has committed into $250 million of production value due to its production capacity concern. When I explored further, the Purchasing would target to source for $200 million of materials (commodity) to support  production.
 
  Any Concern ?
Of course, they have faced the problems, that so called “KPI Mismatching”, else they would not engage us to sort out their problems. They do not face any problem during their KPI setting stage, but they will encounter problems during the KPI implementation stage. 
 
 
Why ?
When Sales Department did not achieve their target, they will say, “We can sell, but Production failed to deliver”; Production will also say, “We can produce, but Purchasing fail to provide us enough materials”. Finally, Quarterly KPI Review Meeting becomes a “Responsibility Pushing” Meeting.   
 
  Can we prevent the above ?
Yes. What we do is to, make sure every of the KPI set need to support to certain department, and being supported by another department. Let’s say, Production set the target of “% of Meeting Production Target”, it shall support the KPI of Sales,  “% of On Time Delivery for Product Order”, and it shall also be supported by the Purchasing Department, “Monthly Cases of Materials Shortage”.

The strategically link horizontally will be tabled into “Strategic KPI Mapping”, which will allow the Management see how every single department KPI support to the bottom line of the company. With this, teamwork will be definitely built. Why ? Every department is closely linked to help each other to achieve their KPI. With this, we will success or fail together ! Teamwork counts !
 
  Next Issue:
Getting your Team Support is another level of KPI Effort. Our next issue is,   “When to Cascade Your KPI To The Next Level”.
 
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