Key Performance Indicators

I received a great question from a PNCWA Asset Management newsletter reader, which I think the answer is worth repeating here.

Question: How do you select a good key performance indicator (KPI) and what is a good strategy for implementing it?



Answer: Wow, this is a great topic and I am glad to have an opportunity to provide a few thoughts on developing KPI's. First, I know in the literature there is a group of KPI's, including Preventive to Corrective maintenance ratios, PM backlog, etc...., that many people implement and I recommend for benchmarking purposes. However, when you are attempting to manage or improve on a certain element of your program I recommend taking a bit of a different perspective.



I like to design working level key performance indicators to communicate and bring focus to a particular objective. I would like to demonstrate this with the following graphic that I have used at one of my projects:


http://www.wllcamg.com/downloads/unit_process_risk_matrix.jpg

This graphic shows a table that distributes the existing backlog of work orders by count (132 lower right) across the unit processes (along the left column) and includes a distribution of the work orders within the critical systems (see http://www.youtube.com/watch?v=X85d9ZVjOwQ&feature=related) in each unit process. There are totals for each unit process on the right column and each criticality ranking (5,3,2,1) across the bottom row, with the total in the lower right. I created this table using Microsoft Excel using the Pivot Table function from an export of raw Work Order data taken from the CMMS. (Note: The CMMS includes a complete unit process/functional system hierarchy, see http://www.youtube.com/watch?v=nEGE69ie5QE, and Relative Criticality ranking of the systems in User Defined Fields (UDF)).

The objective of the Unit Process Risk Matrix is to weekly present to the maintenance manager a more informative presentation of his backlog of work orders so that he can prioritize the work to reduce risk. Reducing operating risk and focusing resources on a week to week basis is a more effective way to achieve the overall objective of keeping the facility operating at the expected Level of Service, then simply focusing on what the backlog is, or even how the back log is changing from week to week as is typically tracked in the backlog benchmark KPI.

For me the key to KPI's is figuring out a way to present information that presents "actionable" information because data presentation is often an overlooked part of asset management where inspiring action in our audiences is key to our success. In the example above the maintenance manager can quickly see how many "red" work orders he has and in which Unit Process they are in. Another excellent example of a quickly understood presentation of data is this map (http://www.edwardtufte.com/tufte/minard) which plots Napoleon's route to Moscow in 1812. The line width that plots the route represents the total army census at any point along the route and the impact of what happened to Napoleon's army on that fateful trip leaps out.

Hans Rosling is another expert at presenting complex data to make an "actionable" impact on his audience. Check out the video at: http://www.youtube.com/watch?v=RUwS1uAdUcI . It is about twenty (20) minutes long, but you only really need to watch the first five minutes to get the picture of what he is doing with world population data.

If you would like to play with Hans Rosling's graphing tool you are in luck. Google purchased his software and now makes it available for free online with their spreadsheet tool. Check out an example here: http://spreadsheets.google.com/pub?key=pCQbetd-CptE1ZQeQk8LoNw (Please allow time to download graph action)

Please share with us any valuable KPI's that you develop or have developed because we all could benefit from new ways to present our asset management information.