Category Archives: Production

Days working overseas on jobs

Definition:
Number of days working overseas on jobs

Calculation:
Sum of working days overseas

This KPI is measured as: Time (e.g. Years, Minutes)

Interpretation of results: Depends On The Goals

Strategic objective:
Happy employees make happy customers, which make happy shareholders

Unit level costs

Definition:
Unit level costs arise from activities that are performed at least once for each unit of product. For example, machining a surface, drilling a hole, or attaching a subassembly must be done for eacht and every unit produced. These costs include direct labor and material, machine costs, and direct energy costs.

Calculation:
Sum of direct labor costs, direct material costs, direct machine costs, direct energy costs

This KPI is measured as: Financial Value (e.g. €, $)

Interpretation of results: Lower Is Better

Strategic objective:
Increase profitability

Batch-level costs

Definition:
Batch-lever costs arise from activities performed once for each batch or lot of products. For example, machine setups, cleanup, moving the batch to the next step in the production process depend on the number of batches rather than the number of units in each batch. Purchase orders and inspections are also examples of batch-level activities. These costs occur for each batch, independent of how many units are in the batch.

Calculation:
Sum of all types of costs from activities performed for a batch

This KPI is measured as: Financial Value (e.g. €, $)

Interpretation of results: Lower Is Better

Strategic objective:
Increase profitability

Product-level costs

Definition:
Product-level costs arise from activities to support the production of the product or model. For example, engineering support costs for process modifications and product design depend on the existence of the product line and do not vary with the number of units or number of batches produced.

Calculation:
Sum of all costs for supporting production

This KPI is measured as: Financial Value (e.g. €, $)

Interpretation of results: Lower Is Better

Strategic objective:
Increase profitability

Projects within budget

Definition:
Percentage actual client projects within budget (cost versus budget). This KPI is more informative when the project phase is taken into consideration.

Calculation:
(Projects within budget / total running projects) x 100

This KPI is measured as: Percentage (%)

Interpretation of results: Higher Is Better

Strategic objective:
Retention of customers/minimize negative comment in the marketplace

Client projects on time

Definition:
Percentage of actual client projects on schedule (compared to inital planning). This can be measured for closed projects, but also for running projects. In that case the indicator predicts claims, for example.

Calculation:
(Projects on schedule / total running projects) x 100

This KPI is measured as: Percentage (%)

Interpretation of results: Higher Is Better

Strategic objective:
Retention of customers/minimize negative comment in the marketplace

Late projects by manager

Definition:
Number of both internal projects and client projects that are delayed, per manager.

Calculation:
Sum of delayed projects per manager

This KPI is measured as: Number (amount Of Units, Rating, Etc)

Interpretation of results: Lower Is Better

Strategic objective:
Efficient operations

Number of variations to contract

Definition:
Difference in contacts per type of product or service. The more tailor made contracts, the less standardization and cost-efficient the business will be done. This can be a strategic choice, but bringing back the number of variations is always favorable.

Calculation:
Number of different contracts per type of product or service

This KPI is measured as: Number (amount Of Units, Rating, Etc)

Interpretation of results: Lower Is Better

Strategic objective:
Efficient operations

Quality problems

Definition:
Quality problems detected during product audits in the field

Calculation:
sum of quality problems

This KPI is measured as: Number (amount Of Units, Rating, Etc)

Interpretation of results: Lower Is Better

Strategic objective:
Long-term relationship with profitable customers

Service expenses

Definition:
Costs of services that has been given to a certain customer or a section of customers.

Calculation:
Sum of specified costs

This KPI is measured as: Financial Value (e.g. €, $)

Interpretation of results: Lower Is Better

Strategic objective:
Efficient operations