Adjusting and revising targets for manufacturing excellence

Companies must be creating challenging, but realistic, targets for key performance indicators (KPIs) to help drive behaviors and actions for companies.


Courtesy: EruditioCompanies must be asking what the point of is not sharing the best in class targets. It comes down to the purpose of key performance indicators (KPIs), which is to drive behaviors and actions. If you have a target set too high, you lose motivation, and same goes if it is too low (as they have already achieved it). You need a challenging, but realistic, target in achieving based on the current state of the program.

This is not to say, that there should not be a short or medium-term target, these are needed to measure progress, but those targets need to be matched to the current state. As the organization and its processes mature, the KPIs should be reviewed and the targets should be revised.

Determining the interim target

So how do you determine what the target should be? Well, there are a few different ways to do so. The first is to benchmark your current state and determine what is realistic to achieve in the next 6 to 12 months. This is a great approach, as the business case and benefits can be calculated and focus applied to the right KPIs.

The second way is to have an assessment done (internally or externally) and determine where you fall in maturity against others. This will allow you to make an informed decision on where your target should be based on similar maturities. The potential downside to this approach is that once again, the targets may be too high or too low.

After a period of time has passed, such as 6 or 12 months, the performance against the KPIs should be reviewed. This will allow the organization to decide if the targets need to be revised (higher or lower). This is critical as it will ensure the targets stay relevant. It is also okay to change the KPIs if they are no longer relevant to the organization.

KPIs need to drive actions

KPIs are designed to drive changes in behavior, hence performance, that will make positive changes to the organization. Creating unrealistic targets can not only demotivate, but it can also cause “creative” ways to calculate the performance, resulting in “meeting” the target. This results in a lack of improvements.

The importance of selecting the right targets cannot be overlooked, as it can influence the entire program and it is okay to revise the targets as needed. The right KPIs (including balancing KPIs) need to be selected and the targets based on the current performance of the organization.

The neverending journey 

So as a company matures and the performance improves, the targets should be moving as well. The increments that they move will be greatly reduced as the maturity improves, as the improvements become harder to achieve. It is this change in expectations and the continued challenge which will drive continuous improvements in the organization.

James Kovacevic, principal instructor at Eruditio, a CFE Media content partner. This article originally appeared on Eruditio's blog.

Top Plant
The Top Plant program honors outstanding manufacturing facilities in North America.
Product of the Year
The Product of the Year program recognizes products newly released in the manufacturing industries.
System Integrator of the Year
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
October 2018
Tools vs. sensors, functional safety, compressor rental, an operational network of maintenance and safety
September 2018
2018 Engineering Leaders under 40, Women in Engineering, Six ways to reduce waste in manufacturing, and Four robot implementation challenges.
GAMS preview, 2018 Mid-Year Report, EAM and Safety
October 2018
2018 Product of the Year; Subsurface data methodologies; Digital twins; Well lifecycle data
August 2018
SCADA standardization, capital expenditures, data-driven drilling and execution
June 2018
Machine learning, produced water benefits, programming cavity pumps
Spring 2018
Burners for heat-treating furnaces, CHP, dryers, gas humidification, and more
October 2018
Complex upgrades for system integrators; Process control safety and compliance
September 2018
Effective process analytics; Four reasons why LTE networks are not IIoT ready

Annual Salary Survey

After two years of economic concerns, manufacturing leaders once again have homed in on the single biggest issue facing their operations:

It's the workers—or more specifically, the lack of workers.

The 2017 Plant Engineering Salary Survey looks at not just what plant managers make, but what they think. As they look across their plants today, plant managers say they don’t have the operational depth to take on the new technologies and new challenges of global manufacturing.

Read more: 2017 Salary Survey

The Maintenance and Reliability Coach's blog
Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
One Voice for Manufacturing
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Maintenance and Reliability Professionals Blog
The Society for Maintenance and Reliability Professionals an organization devoted...
Machine Safety
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
Research Analyst Blog
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Marshall on Maintenance
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
Lachance on CMMS
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
Material Handling
This digital report explains how everything from conveyors and robots to automatic picking systems and digital orders have evolved to keep pace with the speed of change in the supply chain.
Electrical Safety Update
This digital report explains how plant engineers need to take greater care when it comes to electrical safety incidents on the plant floor.
IIoT: Machines, Equipment, & Asset Management
Articles in this digital report highlight technologies that enable Industrial Internet of Things, IIoT-related products and strategies.
Randy Steele
Maintenance Manager; California Oils Corp.
Matthew J. Woo, PE, RCDD, LEED AP BD+C
Associate, Electrical Engineering; Wood Harbinger
Randy Oliver
Control Systems Engineer; Robert Bosch Corp.
Data Centers: Impacts of Climate and Cooling Technology
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
Safety First: Arc Flash 101
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
Critical Power: Hospital Electrical Systems
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
Design of Safe and Reliable Hydraulic Systems for Subsea Applications
This eGuide explains how the operation of hydraulic systems for subsea applications requires the user to consider additional aspects because of the unique conditions that apply to the setting
click me