6.1
KPI’s to measure progress

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.

    workratio formula

    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.

    Work-Value Ratio formula

    KPI 3: Value Ratio

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

    Value Ratio Formula

    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.

    Error Rate Formula

    KPI 6: KPI Cost per Information item

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

    Cost per information item

    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’.

    A World Class Office delivers…

    The right information …

    … in the right form …

    … at the right moment …

    … in the right place…

    … at lowest cost & effort

     

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