Top 10 KPIs of
2010 % Hospital bed occupancy rate % Slow moving stock # Berry ratio % Realization rate # Units per man-hour % Employee turnover # Management-to-staff ratio # Earned man-hours # Inventory to sales ratio (ISR) # Maintenance backlog % Hospital bed occupancy rate % Slow moving stock # Berry ratio % Realization rate # Units per manhour % Employee turnover # Management-to-staff ratio # Earned man-hours # Inventory to sales ratio (ISR) # Maintenance backlog % Hospital bed occupancy rate % Slow moving stock # Berry ratio % Realization rate # Units per man-hour % Employee turnover # Management-to-staff ratio # Earned man-hours # Inventory to sales ratio (ISR) # Maintenance backlog % Hospital bed occupancy rate % Slow moving stock # Berry ratio % Realization rate # Units per man-hour % Employee turnover # Management-to-staff ratio # Earned man-hours # Inventory to sales ratio (ISR) # Maintenance backlog % Hospital bed occupancy rate % Slow moving stock # Berry ratio % Realization rate # Units per man-hour % Employee turnover # Management-to-staff ratio # Earned man-hours # Inventory to sales ratio (ISR) # Maintenance backlog % Hospital bed occupancy rate % Slow moving stock # Berry ratio % Realization rate # Units per man-hour % Employee turnover # Management-to-staff ratio # Earned manhours # Inventory to sales ratio (ISR) # Maintenance backlog % Hospital bed occupancy rate % Slow moving stock # Berry ratio % Realization rate # Units per man-hour % Employee turnover # Management-to-staff ratio # Earned Publication date: 01 March 2011 eabID number: sK0118001
Top 10 KPIs of 2010
Table of contents page 1
Executive Summary
2
KPIs ... Naturally
4
smartKPIs.com Community Profile
6
2010 smartKPIs.com Functional Areas Taxonomy
7
2010 smartKPIs.com Industries Taxonomy
8
Top 10 KPIs of 2010 Countdown Analysis
9
Top 10 KPIs of 2010 List by Functional Area and Industry
10
% Hospital bed occupancy rate
12
% Slow moving stock
14
# Berry ratio
16
% Realization rate
18
# Units per man-hour
20
% Employee turnover
22
# Management-to-staff ratio
24
# Earned man-hours
26
# Inventory to sales ratio (ISR)
28
# Maintenance backlog
30
Appendix A: Related Reports
30
Appendix B: About eab group
31
Appendix C: eab group Services
32
Appendix D: eab group Online Portfolio
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Top 10 KPIs of 2010
Executive Summary Key Performance Indicators (KPIs) are today some of the most popular management tools. From the National Museum of Australia, to the First Bank of Nigeria, from the Panama Canal Authority to Rolls Royce, from the Ministry of Education in Brunei Darussalam to the American Medical Association, KPIs are used to understand, learn and improve performance across industries, departments and teams. In this environment marked by the coming to age of KPIs as management tools, smartKPIs.com represents the go to place for information about the use of KPIs across the world. As a research driven online platform for performance management knowledge integration, the website contains over 6400 examples of KPIs used at organizational and individual level, pre-populated Strategy Maps, KPI Dashboards and Scorecards, interviews with practitioners, consultants and academics and references 1000 reports illustrating the use of KPIs and organizational objectives in practice. At its core is the largest online database of thoroughly documented KPI examples from 14 business functional areas and 24 industries. The smartKPIs.com research program is supported by a community formed of tens of thousands of members from over 190 countries and territories. Interest in KPIs and their use across industries is on the rise around the world, driven by both government regulations and by the benefits they bring in terms of accountability, transparency and achievement of results. This trend was reflected in 2010 by the hundreds of thousands of visits to the smartKPIs.com website and the many KPIs visited, bookmarked and rated by members of the smartKPIs.com community. The Top 10 KPIs of 2010 report is a synthesis of what smartKPIs.com is all about: it brings together an overview of how KPIs are used in practice today, by combining input from the smartKPIs.com community with research and analysis from the editorial team. While centered around the KPIs that in 2010 received the highest number of visits on smartKPIs.com, the report also contains analysis and insight regarding performance management today: Section 1: “KPIs … Naturally”, an article that sets the context through a discussion on what is old and what is new in the use of KPIs. Section 2: Presents the profile of the smartKPIs.com community, illustrating membership by role, country, industry and organisation size. Section 3: Outlines the taxonomy of functional areas and industries used for grouping KPIs in smartKPIs.com. Section 4: Introduces the custom KPI documentation form developed by the smartKPIs.com research team for documenting KPIs. It contains over 30 fields of data, making this the most thorough KPI documentation template in use today. Section 5: Lists the names of the Top 10 KPI examples in 2010 on smartKPIs.com, followed by a brief analysis of each. Section 6: Contains the detailed description of each KPI listed in the report, as documented in smartKPIs Premium (the premium content section of smartKPIs.com). In 2010, the list of the most viewed KPIs in smartKPIs.com was dominated by KPIs specific to functional areas (8 out of 10), which was expected considering their pervasiveness across industries: Human Resources
4
Supply Chain, Procurement, Distribution
4
Top 3 KPIs
Marketing & Communications
2
% Hospital bed occupancy rate
Production & Quality Management
2
% Slow moving stock
Portfolio & Project Management
1
Finance
1
# Berry ratio
The other 2 KPIs completing the top 10 came from 2 different industries: Healthcare and Professional Services. By discussing the use of KPIs today, presenting the best practice in documenting them and listing the most popular KPIs in 2010, this report can be a useful resource in promoting the adoption of KPIs or refreshing the existing performance measurement and management practice in any organisation. Both the free and premium content available on smartKPIs.com can be useful guides on this journey. eabID number: sK0118001
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Page 1
Top 10 KPIs of 2010
KPIs … Naturally Measurement as a human activity is not new. It emerged in early history as a mean for discovery and sense making. Archaeologists consider the first measurement tool used in human history to be the Lebombo bone, a baboon fibula containing 29 cut notches. Dated 35,000 BC, this tally stick was discovered in the Lebombo mountains in Swaziland. Evaluation, as a form of measurement was used as early as the 3rd century AD, when emperors of the Wei Dynasty rated the performance of the official family members. The biased nature of individual performance evaluation was noticed by Chinese philosopher Sin Yu, who reportedly criticized a rater employed by the Wei Dynasty with the following words: “The Imperial Rater of Nine Grade seldom rates men according to their merits, but always according to his likes and dislikes”. A major milestone in making the connection between measuring as a human activity and performance was in 1494, when Luca Pacioli published in Venice ‘Summa de arithmetica, geometrica, proportioni et proportionalita’ (‘Everything on arithmetic, geometry, proportions and proportionality’). It detailed a practice the Venetian sailors had in place to evaluate the performance of their sailing expeditions, which became the basis of the double-entry accounting system. In time, the subjective nature of individual performance evaluations and the dominance of financial indicators for evaluating enterprise performance became stepstones for performance management in human activities. The industrial revolution added to this combination the “organization as a machine” metaphor that played a major role in driving improvements in efficiencies and effectiveness. The result was an organizational performance management model based on mechanistic, command-and-control thinking, driven by subjective individual performance assessments and financial indicators and crowned by payfor-performance arrangements. Did it work? To a certain extent, yes. Many organisations flourished and matured based on this model. Does it have flaws? Many. And while historical circumstances attenuated them in time, today’s environment amplifies and exposes them at an accelerated rate. Is there a better way? Yes, but it is not simple. It requires a change at multiple levels, from the underlying philosophy of performance, to mentalities and processes. This is not easy. Over time, the use of Key Performance Indicators (KPIs) became synonym to performance measurement and management. KPIs are the link between the old and the new in performance management. Their use, however, is much richer and rewarding in an environment based on organic performance architecture principles: Organizations are echo-systems in their own right. They vary in terms of maturity and the environment in which they operate. As such, their use of performance management systems should reflect their own “personality”. You can try to build an igloo in Sahara, but it won’t be sustainable. The performance architecture of each organisation needs to be unique and to reflect its internal and external environment. Systems thinking provides a much richer context for understanding and improving performance. Command-and-control worked in time for the army, for increasing productivity of unskilled workers during the industrial revolution and for managing large organizations (such as the public service). Today, knowledge workers form the majority of the workforce in developed economies, operate in a much more interconnected environment and have to make decisions at an accelerated pace. Understanding the systems in which we operate, analysing flow and learning based on data become ever more important today and complement the traditional simplistic managerial approach of executing orders from above. Page 2
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Top 10 KPIs of 2010 KPIs should be used primarily for learning. The role of KPIs should be the one of providing the required information to assist in navigating towards the desired results. The same principle is used by ants, who leave pheromone trails to assist each other in navigating towards the food source. Similarly, the nerve impulses travel through the different points of the nervous system, transmitting information. KPIs results should travel through the organisation, facilitating communication, providing a base for analysis / synthesis and ultimately decision making across all levels of the organisation. Data accuracy in human administration is an elusive desideratum. Neils Bohr once said: “Accuracy and clarity of statement are mutually exclusive”. Accuracy is a challenge in exact sciences and even more in human administration. Striving to obtain any KPI data is a challenge in itself for many organisations and data accuracy is an even bigger ask. The use of KPIs should acknowledge this aspect and be oriented towards making the most out of existent data, oftentimes by using variance intervals. This approach is used by the human body. If the temperature drops under a safe limit, we shiver. If the temperature increases, we sweat. Both are performance improvement initiatives of the body, aimed to regulate its temperature back to safe limits. The KPI here is the temperature. While it is not a constant, its trend is good when within certain safe limits. The use of KPIs for rewards and punishment should be limited and driven by self-assessment. Purposeful oriented behaviour is a characteristic of living organisms. For humans and many other species, this behaviour is amplified by rewards and punishment. Along with this amplification, risks are amplified, too. Gaming of results, lack of cooperation, decreased morale and work accidents are some of the undesired consequences. On the other hand, the majority of nerve impulses in the human body transmit general information. Only in particular situations pleasure or pain signals. Similarly, the use of KPIs for rewards and punishment should be the exception to the rule, rather than the norm. Embedding KPIs in organisations through visualization and communication of KPIs results is the key to maximising their value added. Variations in the KPIs used by the human body are felt by our senses as their impact is sensory rich. Similarly, KPIs used in an organizational context should be embedded in everyday use and be a part of the working experience. The most important aspect of communicating KPI results is their visual representation. This is key, both in terms of optimising the layout of the data representation and the presence of visual displays in the working environment. The range of media is diverse today: posters, whiteboards, banners, LED and LCD monitors should be combined to bring results to life across the organization. KPI results should not be restricted to paper reports and computer screens anymore. New philosophy of performance, driven by self-assessment and purposeful achievement as a mean to happiness. While happiness means many things to many, a common expression of this feeling is the result of the purposeful achievement of a desiderate. Achieving something we want, while shared with others, is about us and reverberates strongly in our inner self. Transposing this powerful catalyst of performance in both our personal and organizational life is facilitated by a new paradigm: Happiness is driven by achievement. Achievement is an expression of performance. If we want to be in control of our happiness, we should be in control of our performance. Self-assessment of performance results is not easy. However, if more emphasis is placed on building this capability in each employee, organisations can benefit by creating a rewarding environment conducive to happiness. In this environment, managers can focus on understanding and improving the working system, while employees can focus on self-assessment of the results’ achievement, learning and communicating. Purposeful achievement of results in a well-structured working system would bring both individuals and organisation much closer to happiness and fulfilment compared to the payment of bonuses in the current command-and-control driven dominant paradigm. KPIs are here to stay. The question we have to answer is how do we want to use them: mechanistically or naturally?
Aurel Brudan, Performance Architect smartKPIs.com
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Top 10 KPIs of 2010
smartKPIs.com Community Profile Since its launch in 2009, smartKPIs.com established itself as the favourite destination of professionals from around the world interested in high quality documented examples of performance measures. With hundreds of thousands of page views and tens of thousands of visitors from over 190 countries each month, www.smartKPIs.com is one of the most used performance management resources on the Internet. What sets the smartKPIs.com community apart is the profile of its members. smartKPIs.com is a truly global community, with relatively uniformly spread representation in terms of membership around the world. While the highest number of members comes from English speaking countries, no single country dominates in terms of representation. The same applies in terms of the size of the organizations to which smartKPIs.com members belong. While membership is the highest among companies with 11 to 500 employees, both small and large organizations in terms of headcount are well represented.
Country breakdown 41.61%
2.16%
2.73%
Saudi Arabia
Indonesia
2.95%
3.08%
5.59%
4.26%
Canada United Arab Malaysia Emirates
United Kingdom
14.84%
14.93%
United States
India
7.84%
Australia
Other
Organization size Self-employed
8.37%
1-10 employees
9.56%
11-100 employees
19.91%
101-500 employees
20.21%
501-1000 employees
10.11%
1001-5000 employees 5001-10000 employees 10000+ employees
Page 4
13.41% 5.40% 13.04%
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Top 10 KPIs of 2010 Industry affiliation Not-for-profit Construction / Capital Works Government - State & Federal Energy Food, Beverages & Tobacco Banking, Mortgages & Credit Engineering Telecommunications Retail Transportation / Logistics Finance Healthcare Other professional services Education / Training Manufacturing Technology Consulting Other
2.05% 2.13% 2.14% 2.53% 2.53% 3.04% 3.09% 3.81% 3.96% 4.08% 4.08% 4.08% 4.37% 5.16%
In terms of industry affiliation, the majority of smartKPIs.com community members operate in the consulting industry. The ICT, manufacturing and education / training sectors follow in this hierarchy, which also reflects wide interest from both the public and not-for-profit sectors. 9.23% 10.14% 14.46% 19.14%
Job title Engineer Student
2.08%
The membership of smartKPIs.com community is dominated by managers and consultants, which reflect a high level of professional expertise. The breakdown of managerial positions by function reflects a higher than the average representation from HR, Project and IT managers.
3.07%
C-level Executive
4.43%
Business Analyst
5.26%
Director
6.73%
Consultant
9.13%
Manager
32.30%
Other
37.00%
Managerial roles Purchasing Manager
0.61%
Marketing Manager
1.06%
Product Manager
1.52%
Finance Manager
1.57%
Sales Manager
1.92%
Quality Manager
2.00%
Operations Manager
2.27%
IT Manager
5.13%
General Manager
5.28%
Project Manager HR Manager
Overall, the profile of the smartKPIs.com community paints the picture of a global, diverse and highly qualified membership base. Tapping into the collective intelligence of this community by analysing visit trends is a reflection of both trends in performance management at international level across industries / functional areas and of the relevance of the smartKPIs.com content.
8.64% 9.85%
Manager
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60.14%
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Top 10 KPIs of 2010
2010 smartKPIs.com Functional Areas Taxonomy 14 Functional Areas with 59 Sub-categories
Accounting (217)* • Accounting Systems (34) • Cash Management (21) • Control (10) • Cost Analysis (34) • Planning and Reporting (53) • Transactions / Accounts Payable / Accounts Receivable (65) Corporate Services (38) • Administration / Office Support (8) • Corporate Travel (6) • Facilities / Property Management (16) • Legal Services (8) CSR / Sustainability / Environmental Care (150) • Corporate Social Responsibility (55) • Environmental Care (95) Finance (196) • Asset / Portfolio management (44) • Financial stability (38) • Forecasts & Valuation (53) • Liquidity (14) • Profitability (47) Governance, Compliance and Risk (107) • Compliance and Audit Management (45) • Governance (30) • Risk Management (32) Human Resources (352) • Compensation and Benefits (47) • Efficiency and Effectiveness (33) • Recruitment (60) • Retention (28) • Service Delivery (30) • Talent Development (59) • Workforce (22) • Working Environment (73) Information Technology (539) • Application Development (61) • Enterprise Architecture (43)
• IT - General (38) • IT - Security (116) • Network Management (62) • Service Management (219) Knowledge and Innovation (183) • Innovation (37) • Knowledge Management (70) • R & D (76) Marketing & Communications (178) • Advertising (32) • Marketing (119) • Public Relations (27) Online Presence - eCommerce (159) • eCommerce (45) • Email Marketing (17) • Online Advertising (18) • Online Publishing - Weblogs (10) • Search Engine Optimisation (SEO) (15) • Web Analytics (54) Portfolio and Project Management (102) • Benefits Realisation Management (5) • Portfolio Management (56) • Project Management (41) Production & Quality Management (163) • Maintenance (20) • Production (85) • Quality Management (58) Sales and Customer Service (246) • Customer Service (101) • Sales (145) Supply Chain, Procurement, Distribution (379) • Contract Management (46) • Inventory Management (82) • Logistics / Distribution (133) • Procurement / Purchasing (78) • Supply Chain Management (40)
* The figures in the brackets represent the number of documented KPI examples available on www.smartKPIs.com as of 1 February 2011. For up to date statistics follow the hyperlinks. Page 6
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Top 10 KPIs of 2010
2010 smartKPIs.com Industries Taxonomy 24 Industries with 94 Sub-categories
Agriculture (205)* • Crops (38) • Forestry and Logging (32) • Livestock, Hunting and Fishing (136) Arts and Culture (127) • Event Production and Promotion (4) • Libraries and Archives (92) • Museums (30) Construction & Capital Works (29) • Civil Engineering (24) • Construction of Buildings (22) Education & Training (65) • Academic Education (61) • Training and Other Education (6) Financial Institutions (144) • Banking, Mortgages and Credit (66) • Insurance (50) • Investments (42) Government - Local (628) • Budget and Finance (25) • Community - Quality of Life (33) • Culture, Recreation and Entertainment (39) • Economic & Business Affairs (90) • Environment (60) • General Local Administration (59) • Public Safety (98) • Public Services (123) • Social Services (104) Government - State / Federal (532) • Agriculture, Fisheries and Forestry (46) • Education (38) • Employment and Workplace Relations (42) • Finance / Treasury (11) • Foreign Affairs and Trade (5) • General State Administration (13) • Healthcare (95) • Human / Social Services (11) • Law and Justice (97) • Military, Security and Defense (20) • Resources and Energy (44) • Tourism (64) • Transportation and Infrastructure (49) Healthcare (210) • Emergency Response / Ambulance Services (31) • Healthcare Support Services (16) • Hospitals (93) • Medical Laboratory (15) • Medical Practice (54) • Preventive Healthcare (31) • Veterinary Medicine (7) Hospitality & Tourism (133) • Food and Beverage Service (47) • Hotel / Accommodation (78) • Tour Operator (16) eabID number: sK0118001
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• Travel Agency (14) Infrastructure Operations (245) • Airports (85) • Ports (101) • Railways (24) • Roads (50) Manufacturing (33) Media (63) • Broadcasting (TV and Radio) (28) • Film and Music (36) Non-profit / Non-governmental (52) Postal and Courier Services (65) Professional Services (98) • Accounting Services (33) • Business Consulting (34) • Engineering (39) • Legal Practice (54) • Recruitment / Employment Activities (30) Publishing (31) Real Estate / Property (135) • Property Management (71) • Real Estate Development (20) • Real Estate Transactions (44) Resources (176) • Coal and Minerals Mining (82) • Oil and Gas (41) • Sustainability / Green Energy (56) Retail (47) Sport Management (61) • Coaching / Training (9) • Sport Club Management (13) • Sport Event Organisation (34) Sports (147) • American Football (10) • Badminton (10) • Baseball (29) • Basketball (18) • Cricket (10) • Football / Soccer (27) • Rugby (10) • Tennis (34) Telecommunications / Call Centre (58) • Call Centre (43) • Telecommunications (16) Transportation (281) • Airlines (95) • Land Transport (Road & Rail) (86) • Local Public Transport (60) • Marine Transport / Shipping (90) Utilities (272) • Electricity (98) • Natural Gas (58) • Water and Sewage (142) Page 7
Top 10 KPIs of 2010
Top 10 KPIs of 2010 – Countdown Analysis
10 9 8
7 6 5 4 Page 8
# Maintenance backlog Monitoring and measuring maintenance backlog is one of the most effective ways for managing maintenance workload, as an accurate managed backlog has a direct impact to effectively planning and scheduling the production activities. These aspects were acknowledged by many organizations in 2010, making it a leading indicator for customer satisfaction.
# Inventory to sales ratio (ISR) Keeping the right balance between the inventory value and volume of sales is one of the major challenges for organizations. Especially in times of economic downturn, when the demand levels seem to drop down behind the offer levels, organizations must stay alert and keep a close eye of their inventory to sales ratio.
# Earned man-hours One of the best ways for tracking project progress and productivity is to measure the level of earned man hours. Delivery of projects as planned is always a challenge and the use of KPIs for managing project performance is now common in many project management methodologies. Due to the universal presence of projects in business, the listing of a project management KPI in Top 10 most visited KPIs of 2010 is not surprising.
# Management - staff ratio In 2010, many organizations suffered major structural changes, which oftentimes had an impact on headcount and managerial structure. The use of this KPIs is necessary so that the right balance is maintained in terms of work coordination. A healthy span of control has positive effects on staff morale, stress levels and organizational productivity.
# Employee turnover This KPI is closely linked to employee engagement and satisfaction in the workplace, as unhappy employees are more likely to leave. In 2010 personnel fluctuation was in the spotlight, but in an atypical way, due to the worldwide increase in unemployment, as many organizations had to let go a part of their employees.
# Units per man-hour One of the most common KPIs used to measure productivity levels in most of the industries. Especially in the construction and manufacturing industries, it represents one of the two basic reporting methods used along with the volume of units produced. As productivity is at the core of traditional performance measurement, this KPIs is bound to remain one of the most popular KPIs used in operations management.
% Realization rate Tracking the realization rate was in 2010 one of the major focus areas for organizations delivering professional services. In challenging economic times, discounted rates are common practice, however they put further pressure on profit rates. Professional services companies achieving high realization rates usually have a strong company presence on the market and are recognized for their service quality. eabID number: sK0118001
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Top 10 KPIs of 2010
3 2 1
# Berry ratio Companies use profitability ratios in order to measure their ability to generate returns through effective allocation and use of available resources. A favourite for tax and transfer pricing analysts, the Berry ratio stands out as the most popular financial ratio in 2010. It has a long history and its name comes from Dr. Charles Berry (1930-2007), a specialist in industrial organization and applied microeconomics and professor at Princeton University.
% Slow moving stock Slow moving stocks are one of the most significant issues organizations have to deal with as such stocks can become obsolete and generate financial losses. In turbulent times, such as economic downturns, closely monitoring stock turnover is essential to ensure cash flow.
% Hospital bed occupancy rate Topping the list of the most popular KPIs in 2010, this healthcare KPIs reflects the high level of interest in the sector in improving the performance of healthcare facilities. Driven by increasing pressure from patients for improved quality and volume of service and government regulatory compliance requirements, the use of KPIs in the healthcare industry makes it one of the most measured in the professional spectrum. Naturally, a healthcare KPI received by far the highest number of visits in 2010 on smartKPIs.com and continues to lead in popularity.
Top 10 KPIs of 2010 List Name
Functional Areas
Industries
% Hospital bed occupancy rate
------
Healthcare
% Slow moving stock
Supply Chain, Procurement, Distribution
------
# Berry ratio
Finance
------
% Realization rate
------
Professional Services
# Units per man-hour
Production & Quality Management
------
% Employee turnover
Human Resources
------
# Management-to-staff ratio
Human Resources
------
# Earned man-hours
Portfolio and Project Management
------
# Inventory to sales ratio (ISR)
Supply Chain, Procurement, Distribution
------
# Maintenance backlog
Production & Quality Management
------
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Top 10 KPIs of 2010
1
Functional Areas
Sub-categories
Industries
N/A
Hospitals
Healthcare
KPI record
Indicator type
Unit type
sK41
smartKPI
%
Name
% Hospital bed occupancy rate Definition and variations Definition Measures the percentage of beds in the hospital that are occupied by patients, from overall number of hospital beds. Variations % Bed occupancy rate - long-term patients % Bed occupancy rate - short-term patients Related KPIs # Hospital bed capacity $ Hospital operating profit per bed # Hospital admission rate per 10,000 inhabitants Tags hospital, occupancy
Calculation Subordinate measures used for calculation A = # Hospital inpatient beds occupied B = # Hospital inpatient beds Calculation formula
Formula type
Trend is good when
(A/B)*100
Rate
Increasing
Focus Purpose To indicate the hospital’s efficiency regarding bed management and its spare capacity. BSC perspective
Measurement focus
Impact stage
Customer
Volume
Process
Indicator focus
Measurment type
Level
Leading
Quantitative
Strategic
Data capture period
Standard reporting frequency
Data integrity
Spot
Daily
High
Automation fit
Limitations
Recommended
Accurate reporting for this KPI requires real-time registration of inpatients, so that no lag exists between the actual hospitalization (and the occupancy of the bed) and registering it in the bed management system.
Data profile
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Top 10 KPIs of 2010
Targets Benchmarking fit Suitable
Threshold exemple Red: <70%
Notes Given the universality of the measure, it suits benchmarking very well. High levels of bed occupancy reflect the ability of a hospital to provide safe patient care and indicate an efficient use of a hospitalâ&#x20AC;&#x2122;s capacity.
Yellow: 70-90%
Green: >90%
Analysis and resources Overall notes Bed occupancy rate is used to assess the demands for hospital beds and hence to gauge an appropriate balance between demand for health care and number of beds available. Managing the bed occupancy rate can be a difficult task due to the demand that cannot be controlled by postponing (like in the case of a guest house, for example). Additional resources http://news.bbc.co.uk/2/hi/health/5370336.stm
References 1. Adeyi, O. , Smith,O., Robles, S. & World Bank (2007), "Public policy and the challenge of chronic noncommunicable diseases", available at: http://siteresources.worldbank.org/INTPH/Resources/PublicPolicyandNCDsWorldBank2007FullReport.pdf 2. Health Policy Research Associates & Institute for Health Policy (2007), "Performance Reviews of Provincial and Line Ministry Healthcare Services", available at: http://203.94.76.60/AHF/pdf/CD03/Assesment_Overall_Perfor_bw_Districts02_35-54.pdf 3. Republic of the Philippines, Department of Health (2004), OTHER HEALTH FACILITIES STATISTICAL REPORT, available at: www.doh.gov.ph/bhfs/images/issuances/psychiatric/statisticalreport.pdf
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Top 10 KPIs of 2010
2
sK651 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
Supply Chain, Procurement, Distribution Production & Quality Management
Inventory Management Production
Manufacturing
KPI record
Indicator type
Unit type
sK651
smartKPI
%
Name
% Slow moving stock Definition and variations Definition Measures the percentage of stock that has not moved in the defined number of days, out of the overall stock. The defined number of days are less than the ones established for obsolete items. Variations % Slow moving stock rate Related KPIs % Obsolete items in inventory Tags inventory
Calculation Subordinate measures used for calculation A = # Slow moving items B = # Items in the inventory Calculation formula (A/B)*100
Formula type Rate
Trend is good when Decreasing
Focus Purpose To assess the inventory management capability. The slow moving stock can result into obsolete stock and generate financial losses. BSC perspective Internal processes
Measurement focus Risk
Impact stage Process
Indicator focus Leading
Measurment type Quantitative
Level Operational
Data capture period Day
Standard reporting frequency Weekly
Data integrity Low
Automation fit
Limitations
Not recommended
Accurate reporting for this KPI is dependent on a well functioning inventory management system.
Data profile
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Top 10 KPIs of 2010
sK651 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit
Notes
Suitable
Given the universality of the measure, it suits benchmarking very well. However, targets may vary based on industry profile. In some industries, companies can work out arrangements with suppliers to limit their vulnerability to slow-selling inventories. Such a relationship can mean that the any unsold merchandise for full credit within a common accepted period can be returned to the wholesaler.
Threshold exemple Red: >30%
Yellow: 10-30%
Green: <10%
Analysis and resources Overall notes Slow-moving items still contain value and instead of letting them pile up and sit over a period of time and become worthless, a high accent should be put on selling them, even if with lower prices. As a last resort, if the slow moving items cannot be sold and are still useful, they can be donated to charity and realize tax advantages, where the state allows it. Additional resources Dolgui, A., Morel. G. & Pereira, C., E. (2006), "Information control problems in manufacturing 2006", A Proceedings Volume from the 12th IFAC Conference, Saint-Etinne, France, 17-19 May 2006, Elsevier, Oxford. UK.
References 1. Burgd, H., B. (1985), "Strategic Identification of Domestic Air Express Markets: Assessing Alabama's Market Demand", The Alabama Business & Economic Journal, Vol. 8, No. 3, pp. 13 - 24, available at: http://www.aum.edu/uploadedFiles/SBEJ_Vol8_3.pdf 2. HM Revenue & Customs, "BIM33145 - Stock: valuation: net realisable value: use of formulas, slow moving stock, acceptable accuracy", available at: http://www.hmrc.gov.uk/manuals/bimmanual/bim33145.htm 3. Pevec, L. & Lenart, D., "IT SUPPORT FOR PLANNING MAINTENANCE OF RAILWAY VEHICLES", available at: http://www.fpp.edu/~mzanne/ICTS2010/Pevec,%20Lenart.pdf
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sK517 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
Finance
Profitability
Any
KPI record
Indicator type
Unit type
sK517
smartKPI
#
Name
# Berry ratio Definition and variations Definition Measures the ratio of an organization's gross profits to operating expenses. Variations # BR # GP/OE Related KPIs % Gross profit margin Tags profit, expenses
Calculation Subordinate measures used for calculation A = $ Gross profit B = $ Operating expenses Calculation formula A/B
Formula type Ratio
Trend is good when Increasing
BSC perspective Financial
Measurement focus Money
Impact stage Outcome
Indicator focus
Measurment type
Level
Lagging
Quantitative
Strategic
Data capture period Month
Standard reporting frequency Monthly
Data integrity High
Automation fit
Limitations
Recommended
Robust financial data reporting capability is required to enable tracking and reporting of this ratio on a frequent basis.
Focus Purpose To assess the organization's profitability.
Data profile
Page 14
eabID number: sK0118001
Š eab group Pty Ltd 2011 Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/berry-ratio-517.html
Top 10 KPIs of 2010
sK517 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit
Notes
Suitable
Given the universality of the measure, it suits benchmarking very well. Target may vary based on industry profile. A ratio of 1 or more indicates that the company is making profit above all variable expenses, whereas a ratio below 1 indicates that the firm is losing money.
Threshold exemple Red: <1
Yellow: 1
Green: >1
Analysis and resources Overall notes Named after Charles Berry, an American economis, the Berry ratio is used mostly by tax and transfer pricing analysts. Although the Berry ratio is a simple profitability measure, it is probably one of the most misused ratios in the context of transfer pricing analysis. Interpretation errors may appear if analysts do not understand this indicator's limitations. The Berry ratio cannot be applied to distributors that also perform manufacturing functions as it cannot capture the additional return earned by the manufacturing function. Empirical studies have shown that distributors with low operating expense intensity (less than 10%-15% relative to sales ratios) show very high berry ratios when compared with distributors with higher operating expenses. Therefore, extra caution should be taken when comparing two distributors with very different operating expenses. Using the # Berry ratio together with other profit level indicators will provide more valid information. Additional resources http://www.bridging.uwaterloo.ca/mtax/documents/PrzysuskiM_BerryRatioPaper.pdf http://www.kpmg.ch/docs/20100629_Asia_Pacific_Transfer_Pricing_Guide_EN.pdf http://deloitte.12hna.com/newsletters/2009/ALS/a0910_6.pdf
References 1. de Preter, L. & Casley, A. (2008), "OECD Consultation: Comparability and Profit Methods Profit Margin Indicators for Sales Activities", available at: http://www.oecd.org/dataoecd/54/27/41697276.pdf 2. Eden, L. (1998), "Taxing multinationals: transfer pricing and corporate income taxation in North America", University of Toronto Press Incorporated, Toronto, CA 3. Internal Revenue Service (2005), "ANNUAL REPORT CONCERNING ADVANCE PRICING AGREEMENTS", available at: http://www.irs.gov/pub/irs-drop/a-00-35.pdf 4. Lewis, P., G. (2000), "Mining for Nuggets in the IRS APA Report", available at: http://www.capdale.com/files/Publication/99e5b574-464b-47ce-b09a-cd1b55075431/Presentation/PublicationAttachment/c5758f4e-b3fe-44fe-b62a-d0d0 6bdcad26/MiningForNuggets.pdf
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sK321 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
N/A
Engineering Recruitment / Employment Activities Legal Practice Business Consulting Accounting Services
Professional Services
KPI record
Indicator type
Unit type
sK321
smartKPI
%
Name
% Realization rate Definition and variations Definition Measures the percentage of revenue actually earned relative to the potential revenue represented by the list prices. Variations % Rate realization % Billing realization rate Related KPIs % Consultants generating revenue Tags revenue
Calculation Subordinate measures used for calculation A = $ Revenue actually earned B = $ Potential revenue represented by the list prices Calculation formula
Formula type
Trend is good when
(A/B)*100
Rate
Increasing
Focus Purpose To indicate the company's ability to bill at its list prices, as clients usually tend to negotiate for price reductions. BSC perspective
Measurement focus
Impact stage
Financial
Money
Outcome
Indicator focus Lagging
Measurment type Quantitative
Level Operational
Data capture period Month
Standard reporting frequency Monthly
Data integrity High
Automation fit Recommended
Limitations Accurate reporting for this KPI is dependent on a well maintained register of the pricing list and billing rates applied.
Data profile
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eabID number: sK0118001
Š eab group Pty Ltd 2011 Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/realization-rate-321.html
Top 10 KPIs of 2010
sK321 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit
Notes
Suitable
A high realization rate indicates a strong competitive position in the market, usually based on the premium quality of services. Despite the benchmarking suitability, data regarding realization rates for companies are rarely available to the public.
Threshold exemple Red: <70%
Yellow: 70-90%
Green: >90%
Analysis and resources Overall notes Lower levels of results achieved for this KPI are due not only to discounted prices, but oftentimes to bad-paying customers, that do not pay the entire bill value. It can be applied at organizational level, by calculating an average billing realization rate, as well as at operational and individual level. Additional resources http://www.smartkpis.com/blog/2010/03/16/performance-measurement-in-the-business-consulting-industry-measures-and-more/
References 1. Greene, A., G. (2009), "The lawyer's guide to governing your firm", American Bar Association, Chicago, IL 2. Hildebrandt International (2004), "Anatomy of a law firm merger: how to make or break the deal", American Bar Association, Chicago, IL 3. Mabey, S. & MacKay, K. (2010), "Key Performance Indicators: Understanding How to Keep Your Eye On The Dashboard", Law Practice Magazine
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sK443 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
Production & Quality Management
Production
Any
KPI record
Indicator type
Unit type
sK443
smartKPI
#
Name
# Units per man-hour Definition and variations Definition Measures the number of completed units realized per hour of work. A man-hour is the amount of work done by one person in one hour. Variations # Units/MH # Pieces per labor hour Related KPIs % Production first time yield (FTY) Tags construction, man-hour, productivity
Calculation Subordinate measures used for calculation A = # Production units B = # Man-hours
Calculation formula A/B
Formula type Average
Trend is good when Increasing
Focus Purpose To assess labor productivity in terms of output per man-hour. BSC perspective
Measurement focus
Impact stage
Internal processes
Volume
Output
Indicator focus Leading
Measurment type Quantitative
Level Operational
Data capture period
Standard reporting frequency
Data integrity
Day
Monthly
Medium
Automation fit Recommended
Limitations Accurate reporting for this KPI is dependent on a well maintained system for tracking production outputs and man-hours.
Data profile
Page 18
eabID number: sK0118001
Š eab group Pty Ltd 2011 Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/units-per-man-hour-443.html
Top 10 KPIs of 2010
sK443 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit Suitable
Threshold exemple Red: <15
Notes Targets may vary based on the industry. In some industries, man-hour estimates are based on the type of project and experience from similar projects.
Yellow: 15-20
Green: >20
Analysis and resources Overall notes Along with the volume of units, the units/MH reporting method is one of the two basic reporting methods used in the construction and manufacturing industries. This KPI can be influenced by factors unrelated to the labor force, such as equipment downtime, which can decrease man-hour productivity. Additional resources http://www.jstor.org/pss/4225514
References 1. Cox et al. (2003), "Management's Perception of Key Performance Indicators for Construction", Journal of Construction Engineering and Management, Vol. 129, No. 2, pp. 142-151 2. Lal, J. & Srivastava, S. (2009), "Cost Accounting", Tata McGraw-Hill, New Delhi, IN 3. Murthy, P., R. (2005), "Production And Operations Management", New Age International, New Delhi, IN
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sK1 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
Human Resources
Retention
Any
KPI record
Indicator type
Unit type
sK1
smartKPI
%
Name
% Employee turnover Definition and variations Definition Measures the rate at which employees leave the organization in a given time period (i.e. month, quarter, year). Variations % Employees that leave the organization in a given time period % Employees that left the organization in the last 3 months % Employee attrition % Employee loyalty % Employees fluctuation rate Related KPIs # Net hire ratio Tags employees, loyalty, retention, turnover
Calculation Subordinate measures used for calculation A = # Employees that left the organization by the end of the reporting period B = # Employees of the organization at the beginning of the reporting period Calculation formula
Formula type
Trend is good when
(A/B)*100
Rate
Decreasing
Focus Purpose To indicate the level of employee satisfaction with the organization, as an unhappy employee is more likely to leave the organization. BSC perspective
Measurement focus
Impact stage
Learning&Growth
Satisfaction
Outcome
Indicator focus Leading
Measurment type Quantitative
Level Strategic
Data capture period Quarter
Standard reporting frequency Quarterly
Data integrity Medium
Automation fit Recommended
Limitations Difficult to obtain accurate figures if the HR systems are not enabled to timely capture the data for this KPI.
Data profile
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eabID number: sK0118001
Š eab group Pty Ltd 2011 Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/employee-turnover-1.html
Top 10 KPIs of 2010
sK1 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit
Notes
Suitable
Targets may vary based on the industry profile and the workforce trends on the market. A high turnover rate has a negative impact on business, due to the loss of knowledge, the cost of replacing employees and the duration of the replacement process. The positive impact of employee fluctuation is the influx of new ideas, capabilities and energy of the new employees.
Threshold exemple Red: >30%
Yellow: 20-30%
Green: <20%
Analysis and resources Overall notes This measure may be influenced by the HR department performance, the working environment and work policies, the supervisor and team, as well as the promotion and professional development opportunities for the future. An exit interview is a frequently used procedure that is applied by HR specialists in order to assess and avoid the causes that determine a high employee turnover rate. Additional resources http://www.cipd.co.uk/subjects/hrpract/turnover/empturnretent.htm http://www.acas.org.uk/index.aspx?articleid=1183 http://ideas.repec.org/p/iae/iaewps/wp2002n19.html
References 1. International Public Management Association for Human Resources (2010), "HR Metrics Benchmarking Committee Report", available at: http://www.ipma-hr.org/sites/default/files/finalbenchreport.pdf 2. Jackson, M., D. (1999), "Employee Retention", available at: http://www.usfa.dhs.gov/pdf/efop/efo29426.pdf 3. Pinkovitz, H.W., Moskal, J. & Green, G. (1997), "How Much Does Your Employee Turnover Cost?", available at: http://www.uwex.edu/ces/cced/economies/turn.cfm
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sK194 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
Human Resources
Workforce
Any
KPI record
Indicator type
Unit type
sK194
smartKPI
#
Name
# Management-to-staff ratio Definition and variations Definition Measures the ratio between the number of individuals in managerial positions and the headcount of the organization. Variations # Management span of control # Senior management / executives to employees # Staffing rate - managerial / executive # Supervisors and managers to headcount Related KPIs # Board size Tags workforce, management, staff
Calculation Subordinate measures used for calculation A = # Employees in management positions (end of period) B = # Employees (end of period)
Calculation formula
Formula type
Trend is good when
A/B
Ratio
Within range
Focus Purpose To assess the organizational structure and optimize the hierarchical balance. BSC perspective
Measurement focus
Impact stage
Learning&Growth
Volume
Input
Indicator focus Leading
Measurment type Quantitative
Level Strategic
Data capture period Spot
Standard reporting frequency Monthly
Data integrity High
Automation fit Recommended
Limitations Accurate reporting for this KPI is dependent on a well maintained register of managerial positions in the organization.
Data profile
Page 22
eabID number: sK0118001
Š eab group Pty Ltd 2011 Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/management-to-staff-ratio-194.html
Top 10 KPIs of 2010
sK194 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit
Notes
Unsuitable
A high ratio could indicate that a particular department or division is top-heavy. For companies with many layers of management, it may complicate communication and lengthen response time for critical decisions. However, it may also reflect an organizational approach to employee retention and development by providing staff with many managerial level opportunities. A consequence of such a structure are higher salary costs. Professional services organizations generally fall within this category. A low ratio generally reflects a flat organizational structure; it could also indicate that a company is under-managed. It is also an approach to minimizing salary costs. However it may have negative effects on succession planning, as there are fewer opportunities to prepare the next generation of executives by training them on the job in managerial positions.
Threshold exemple Red: <0.1; >0.4
Yellow: 0.1-0.2; 0.3-0.4
Green: 0.2-0.3
Analysis and resources Overall notes Management-to-staff ratio reflects the career path development outlook, the organizational approach to personnel management, being therefore an important indicator of HR cost containment. If used at an organization level, this measure might not be that useful, as targets depend on each department. Therefore, this indicator should be calculated for each department or functional area, not just the whole organisation. Further variations of this measure are based on the personal characteristics of the workforce. Overall, there are various factors that can influence this ratio: industry, organizational structure, combination of job functions, approach to internal talent development and cost constraints. Additional resources http://www.bfi.gov.uk/reports/1999/bfi/york/appendices/c1.asp http://ita.doc.gov/hrm/documents/supervisor_defined.pdf
References 1. Doran et al. (2004), "Impact of the Manager’s Span of Control on Leadership and Performance", available at: http://www.nursingleadership.org.uk/publications/doran2_final.pdf 2. State of Texas, "Management span of control", available at: http://sao.hr.state.tx.us/advisory/FTEMgmntStaffRatio.html 3. United States General Accounting Office (1999), "Social Security Administration: Compliance With Presidential Directive to Reduce Management-to-Staff Ratio", available at: http://archive.gao.gov/paprpdf2/161619.pdf
eabID number: sK0118001
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sK347 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
Portfolio and Project Management
Project Management
Any
KPI record
Indicator type
Unit type
sK347
smartKPI
#
Name
# Earned man-hours Definition and variations Definition Measures the total man-hours corresponding to the completed work in place. Variations # Man-hours with completed work in place Related KPIs % Time sheets incorrectly filled % Time predictability at construction due to project manager change orders Tags man-hours, constructions
Calculation Subordinate measures used for calculation A = # Planned man hours B = % Progress of work completed
Calculation formula
Formula type
Trend is good when
A*B
Volume
Increasing
BSC perspective Internal processes
Measurement focus Volume
Impact stage Output
Indicator focus Leading
Measurment type Quantitative
Level Operational
Data capture period Spot
Standard reporting frequency Monthly
Data integrity Low
Automation fit Not recommended
Limitations Accurate reporting for this KPI is dependent on a well maintained system, capable to record progress at any point.
Focus Purpose To assess job productivity and projects progress.
Data profile
Page 24
eabID number: sK0118001
Š eab group Pty Ltd 2011 Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/earned-man-hours-347.html
Top 10 KPIs of 2010
sK347 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit
Notes
Unsuitable
A low level of earned man hours indicates that the project has experienced lower than expected productivity, as actual man-hours were greater than the progress earned man-hours.
Threshold exemple Red: <80
Yellow: 80-100
Green: >100
Analysis and resources Overall notes Involvement of organizations, especially the construction companies in measuring earned man hours reflects the maturity of project management. Dividing the earned man-hours by the actual man-hours provides a productivity index that is frequently used by construction projects. Additional resources Reid, A., P. (1999), "Project management: getting it right", Woodhead Publishing Limited, Cambridge, UK.
References 1. BURIC (2003), "Measured Mile Labor Analysis. AACE International 47th Annual Meeting: June 22 – 25", available at: http://www.buric.com/Measured_Mile.pdf 2. Cox et al. (2003), "Management's Perceptions of Key Performance Indicators for Construction", Journal of Construction Engineering and Management, Vol. 129, No. 2, pp. 142-151. 3. Rajendran, H., K. (2008), "Process quality and capacity planning", available at: http://soar.wichita.edu/dspace/bitstream/handle/10057/2040/t08033.pdf?sequence=1
eabID number: sK0118001
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sK4808 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
Supply Chain, Procurement, Distribution
Inventory Management
Retail
KPI record
Indicator type
Unit type
sK4808
smartKPI
#
Name
# Inventory to sales ratio (ISR) Definition and variations Definition Measures the ratio between the retailer's inventory value and the sales volume. Variations # Inventory-to-sales ratio # ISR # Inventories to sales ratio # Inventory-sales ratio Related KPIs # Days sales of inventory (DSI) Tags inventory, sales, retail
Calculation Subordinate measures used for calculation A = $ Average inventory value B = $ Average sales revenue Calculation formula A/B
Formula type Ratio
Trend is good when Within range
Focus Purpose To determine whether or not the company is carrying too much inventory, by indicating the inventory on hand. BSC perspective Internal processes
Measurement focus Money
Impact stage Output
Indicator focus Leading
Measurment type Quantitative
Level Operational
Data capture period Month
Standard reporting frequency Monthly
Data integrity Medium
Automation fit
Limitations
Recommended
Accurate reporting for this KPI is dependent on a well maintained inventory and sales register. The reporting frequency should match the speed of the inventory turnover.
Data profile
Page 26
eabID number: sK0118001
Š eab group Pty Ltd 2011 Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/inventory-to-sales-ratio-4808.html
Top 10 KPIs of 2010
sK4808 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit
Notes
Suitable
A high value of this ratio indicates a large amount of inventory on hand or stagnation of sales. Caution should be taken when benchmarking this indicator as it varies based on industry, market and product type.
Threshold exemple Red: <1; >1,6
Yellow: 1-1,2; 1,4-1,6
Green: 1,2-1,4
Analysis and resources Overall notes Carrying too much inventory on the company's books can be an obstacle for operational and organizational growth, as this creates hesitation to produce or hire more, until inventory drops down to a more confortable level. Additional resources http://www.ressex.com/pankajressexppt.pdf http://seekingalpha.com/article/193439-speaking-of-durable-how-s-that-recovery http://www.activemedia-guide.com/invstats.htm
References 1. Bassin, M.W., Marsh, M.T. & Walitzer, S. (2003), "A Macroeconomic Analysis Of Inventory/Sales Ratios", Journal of Business & Economic Research, Vol.1, No. 10, pp. 37-46, available at: http://www.cluteinstitute-onlinejournals.com/PDFs/2003110.pdf 2. Financial Forecast Center (2011), "U.S. Inventory to Sales Ratio Forecast", available at: http://www.forecasts.org/inventory-to-sales-ratio.htm 3. U.S. Census Bureau (2006), "Total Business Inventories / Sales Ratios: 2001 to 2010", available at: http://www.census.gov/briefrm/esbr/www/esbr024.html
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sK1749 export date: 3 Feb 2011 - Page 1 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Functional Areas
Sub-categories
Industries
Production & Quality Management
Maintenance
Any
KPI record
Indicator type
Unit type
sK1749
smartKPI
#
Name
# Maintenance backlog Definition and variations Definition Measures the work necessary to prevent the deterioration of an asset or its function that has not been carried out, but has been identified to be done. Variations # Backlog of maintenance work # Maintenance backlog man-hours Related KPIs % Maintenance time Tags maintenance
Calculation Subordinate measures used for calculation A = # Man hours of incomplete maintenance work required to be completed Calculation formula A
Formula type Volume
Trend is good when Decreasing
Focus Purpose To indicate the adherence to the maintenance plan. BSC perspective Internal processes
Measurement focus Risk
Impact stage Process
Indicator focus Leading
Measurment type Quantitative
Level Operational
Data capture period Spot
Standard reporting frequency Monthly
Data integrity Low
Automation fit Not recommended
Limitations Accurate reporting for this KPI is dependent on having a sound maintenance plan and monitoring it periodically.
Data profile
Page 28
eabID number: sK0118001
Š eab group Pty Ltd 2011 Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/maintenance-backlog-1749.html
Top 10 KPIs of 2010
sK1749 export date: 3 Feb 2011 - Page 2 Username: adrian.brudan@smartKPIs.com Member organization: eab Group Pty. Ltd.
Targets Benchmarking fit
Notes
Suitable
Threshold examples may vary according to the maintenance plan and the overload that occurs due to emergency / unexpected maintenance. In order to reflect a high adherence to the maintenance plan, the value of this indicator should be close to zero.
Threshold exemple Red: >10
Yellow: 5-10
Green: <5
Analysis and resources Overall notes Prioritizing maintenance activities is based on routine maintenance and the backlog for facilities and equipment used in production. However, emergency or unexpected maintenance may occur generating a backlog within the maintenance plan. Additional resources United Nations Centre for Human Settlements (1993), "The Maintenance of infrastructure and its financing and cost recovery", UN-HABITAT, Nairobi, KE.
References 1. Nyman, D. & Levitt, J. (2001), "Maintenance planning, scheduling, and coordination", Industrial Press Inc., New York, NY. 2. University of California Office of President, "Operation and maintenance of plant", available at: http://budget.ucop.edu/rbudget/200405/omp.pdf 3. University of North Carolina (2004), "Deferred Maintenance Magnitude, Cause and Options", available at: http://www.unc.edu/depts/trustees/PP%20310%20Joint%20Committee%20Deferred%20Maintenance.pdf
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Š eab group Pty Ltd 2011
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Top 10 KPIs of 2010
Appendix A: Related Reports This report is part of a collection of smartKPIs.com research reports, dedicated to the analysis of the most popular KPI examples in 2010:
By functional area (department)
By industry
Top 25 Accounting KPIs of 2010
Top 25 Academic Education KPIs of 2010
Top 25 Customer Service KPIs of 2010
Top 25 Call Centre KPIs of 2010
Top 25 Finance KPIs of 2010
Top 25 Food and Beverage Service of 2010
Top 25 HR KPIs of 2010
Top 25 Local Government KPIs of 2010
Top 25 Information Technology KPIs of 2010
Top 25 State Government KPIs of 2010
Top 25 Knowledge Management KPIs of 2010
Top 25 Healthcare KPIs of 2010
Top 25 Marketing KPIs of 2010
Top 25 Hotel / Accommodation KPIs of 2010
Top 25 Portfolio Management KPIs of 2010
Top 25 Manufacturing KPIs of 2010
Top 25 Project Management KPIs of 2010
Top 25 Professional Services KPIs of 2010
Top 25 Logistics and Distribution KPIs of 2010
Top 25 Property Management KPIs of 2010
Top 25 R&D KPIs of 2010
Top 25 Real Estate Transactions KPIs of 2010
Top 25 Sales KPIs of 2010
Top 25 Retail KPIs of 2010
More details about these reports and other smartKPIs.com Premium products and services are available at: www.smartKPIs.com/Premium
Appendix B: About eab group Profile Established in 2004, eab group is an innovative research driven provider of integrated performance management solutions, assisting organizations to achieve results by architecting performance. Our expertise in strategy, organizational performance management, business intelligence and project management helps clients in sustainably delivering value for their stakeholders. Our services include consulting, training, research and technology integration. Page 30
Team • A core team complemented by a network of consultants and associates with a blend of practical business experience, strong consulting skills and an interest in academic research. • Committed to using scientific methods and practical experience to deliver tangible and sustainable benefits. • Highly trained: collectively, our team accumulated 6 Master degrees, 1 MBA and 1 PhD. • Experienced: tens of Balanced Scorecard based performance management systems implemented, hundreds of scorecards and dashboards developed, thousands of KPIs selected and documented. eabID number: sK0118001
© eab group Pty Ltd 2011
Top 10 KPIs of 2010
Appendix C: eab group Services Pre-packaged solutions 1. Performance Management Pre-populated Templates Developed in Microsoft Excel and Powerpoint, following optimal data visualisation and streamlined file administration principles. • Operational KPI dashboards (preselected KPIs documented and grouped by theme) • Balanced Scorecard based Organizational Performance Management Systems (Performance Architecture, Desired State of Evolution, Strategy Map, Performance Scorecard, Initiative Portfolio and Administration Process Map).
Customized solutions 5. Organizational Performance Management Systems Implementations • •
Integrated performance management systems based on the Balanced Scorecard. Application at all organizational levels, or limited to strategic level, operational level or individual level.
6. Key Performance Indicators Advice 2. smartKPIs Premium
•
Overhaul of existing KPIs, by reviewing and updating them in accordance to organizational strategy and best practice. Assistance with KPI selection. KPI documentation support – customisation of smartKPIs Premium templates to reflect organizational needs. Development of customised KPI catalogues. Assistance in identifying reliable benchmarking resources.
smartKPIs Premium is the premium section of the database, consisting of over 1,400 KPI examples preselected by the eab group’s research team as the most relevant for practice. Thoroughly documented in over 30 fields, they make smartKPIs Premium the most comprehensive and well documented selection of Key Performance Indicator (KPI) examples in the world, the ‘gold standard’ in KPI documentation.
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3. Assessment / Audit / Review
7. Operational performance management solutions
Audit of organizational performance management systems at strategic, operational or individual levels. Organizational capability assessment using eab group’s proprietary tools: • Performance Management Maturity Model • Performance Measurement Maturity Model
Supplier performance management – Development and implementation of supplier scorecards for both products and services suppliers
4. Training Core courses (1-2 days) 1. Integrated Performance Management: Linking Strategic, Operational and Individual performance; 2. Measuring and learning with Key Performance Indicators; 3. Implementing and using a Balanced Scorecard based performance management system; 4. Supplier Performance Management – Maximizing the value added by suppliers; 5. Solutions for improving the operational performance of Small and Medium Enterprises (SMEs). KPIs, Dashboard and Scorecard for functional areas (1 day) – i.e. HR, IT, Marketing, Sales, Purchasing / Logistics. KPIs, Dashboards and Scorecard for industries (1 day) - i.e. Medical Centres, Hotels, Real Estate Agencies. eabID number: sK0118001
© eab group Pty Ltd 2011
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Portfolio performance management • Development of Portfolio Dashboards and Project Scorecards • Identification of Key Risk Indicators and establishment of Risk Scorecards Benefits realization management • Development of benefits management plans • Project or program evaluation Alliances performance • Establishment of Alliances Scorecards • Development of Service Level Agreements
8. Strategic and operational planning • •
Facilitation of strategic planning sessions. Strategic research: environmental scans, strategic planning tools deployment (Five forces, SWOT analysis, competitor review). Page 31
Top 10 KPIs of 2010
Appendix D: eab group Online Portfolio
At the core of smartKPIs.com is an online catalogue of over 6,400 KPI examples from 14 business functional areas and 24 industries. smartKPIs Premium is the premium section of the database, consisting of over 1,400 KPI examples preselected by the eab group’s research team as the most relevant for practice. Thoroughly documented in over 30 fields, they make smartKPIs Premium the most comprehensive and well documented selection of Key Performance Indicator (KPI) examples in the world, the ‘gold standard’ in KPI documentation. The community of members also benefits from interactive features such as Questions & Answers, comments and a set of performance measurement resources, among which over 1,000 examples of performance management reports.
PurposefulIdentity.com contains a free online catalogue illustrating the use of corporate identity elements in practice by organizations from around the world. Registered users can explore, bookmark and comment on hundreds of referenced online resources that contain organizational values, mission statements, value drivers and vision statements used in actual business context.
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B=176 IntegratingPerformance.com is an online platform for integrating performance management knowledge, at strategic, operational and individual levels. It reviews the evolution of Performance Management as well as the key tools, systems and software used at discipline at each of these levels. It combines the analysis of theory and architecture with insights regarding good practice and key directions, enabling visitors to gain comprehensive insights into the nature of Performance Management as an integrating discipline. B=109
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BalancedScorecardReview.com is the most comprehensive online resource dedicated to the Balanced Scorecard. It contains a review of this popular management concept following its evolution and use around the world in various industries or companies. It presents its various interpretations, compares it to other concepts and explores its impact on organizations as well as the opinions of critics.
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© eab group Pty Ltd 2011
Top 10 KPIs of 2010
© 2011 eab group Pty Ltd. All Rights Reserved. eabID number: sK0118001 This report is the result of primary research conducted by eab group. It is available in PDF format on the smartKPIs.com website. Terms of use available at: http://www.smartkpis.com/terms-of-use.html (‘Premium content terms’). An appropriate citation for this report is: eab group, 2011, Top 10 KPIs of 2010, Melbourne, Australia Indemnity statement eab group has taken due care in preparing the analysis contained in this report. However, noting that some of the data used for the analysis have been provided by third parties, eab group gives no warranty to the accuracy, reliability, fitness for purpose, or otherwise of the information. eab group shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice. For the latest version of the documentation, smartKPIs Premium should be consulted. Published by:
eab group Life.lab Building 198 Harbour Esplanade, Suite 606 Melbourne Docklands, VIC 3008, Australia Telephone (international): +61 3 9670 2979 Fax: +61 3 8677 6519 E-mail: office@eabgroup.com.au www.eabgroup.com.au | www.smartKPIs.com eabID number: sK0118001
© eab group Pty Ltd 2011
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Life.lab Building, Suite 606, 198 Harbour Esplanade, Melbourne Docklands, VIC 3008 T: +61 3 9670 2979,B=20 F: +61 3 8677 6519, E: office@eabgroup.com.au B=0