In most processes, 95 to 99,5% of the time is Non Value Added!

Example

In company X it takes on average 8 hrs form the moment a shipment is signed ‘goods ready’. Till the required invoice is ready.

To make the invoice it takes about 10 minutes. The employee looks for the customers address, its shipping details, then calculates the shipping cost, finds the product code, looks whether the
customer gets the list-price or a special quotation applies, and checks whetherhe needs to apply a special VAT calculation. He is searching for those details about 8 minutes and makes the invoice in 2 minutes.

KPI 1: Work Ratio

The Work Ratio is the amount of ‘work’ (or activity) performed during the Lead Time of the process.

KPI 2: Work-Value Ratio

The Work-Value Ratio is the amount of actual ‘value’ performing time was included in the time spent working in this process.

KPI 3: Value Ratio

The Value Ratio is the amount of value added time in the total throughput time of the process.

KPI 4: Data Accessibility

Time to access random requested data Per data item

• excl. walking time to FIRST access point

Goal:

Needed data to perform a task should be accessible within at most 30 Sec.

KPI 5: Error rate

The amount of errors made versus the total amount of tasks performed.

KPI 6: KPI Cost per Information item

Cost of information item is a measure for the costs spend to achieve information.

To calculate the total costs of the information system, one should include the costs of

1. Implementation of system,
2. FTE’s responsible for system,
3. Data carrier/infrastructure,
4. Maintaining carrier/infrastructure,
5. Maintaining data

There should be a clear definition for ‘Information Request’.

Since ‘information’ are those items that people respond to, piles of data and unasked graphs are not to be considered as ‘Requested Info’.

When a manager requests to receive a cash-flow report every Monday by 9:00 hr, based on which he schedules his payments, this is a clear ‘Information Request’.