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Publication date: 01 March 2011eabID number: sK0118001
% 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 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
Top 10 KPIsof
2010
© eab group Pty Ltd 2011
eabID number: sK0118001
Top 10 KPIs of 2010
Table of contents1 Executive Summary2 KPIs ... Naturally4 smartKPIs.comCommunityProfile6 2010 smartKPIs.com Functional Areas Taxonomy7 2010 smartKPIs.com Industries Taxonomy8 Top 10 KPIs of 2010 Countdown Analysis9 Top 10 KPIs of 2010 List by Functional Area and Industry10 % 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 Reports30 Appendix B: About eab group31 Appendix C: eab group Services32 Appendix D: eab group Online Portfolio
page
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© eab group Pty Ltd 2011
eabID number: sK0118001
Top 10 KPIs of 2010
Executive SummaryKey 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:
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.
Human Resources
Supply Chain, Procurement, Distribution
Marketing & Communications
Production & Quality Management
Portfolio & Project Management
Finance
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4
2
2
1
1
Top 3 KPIs% Hospital bed occupancy rate
% Slow moving stock
# Berry ratio
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eabID number: sK0118001
Top 10 KPIs of 2010
KPIs … NaturallyMeasurement 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 pay-for-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.
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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.comCommunityProfileSince 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.
2.16% 2.73% 2.95% 3.08% 4.26% 5.59% 7.84%
14.84% 14.93%
41.61%
SaudiArabia
Indonesia Canada United ArabEmirates
Malaysia UnitedKingdom
Australia UnitedStates
India Other
Country breakdown
13.04%
5.40%
13.41%
10.11%
20.21%
19.91%
9.56%
8.37%
10000+ employees
5001-10000 employees
1001-5000 employees
501-1000 employees
101-500 employees
11-100 employees
1-10 employees
Self-employed
Organization size
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eabID number: sK0118001
Top 10 KPIs of 2010
19.14% 14.46%
10.14% 9.23%
5.16% 4.37%
4.08% 4.08% 4.08% 3.96% 3.81%
3.09% 3.04%
2.53% 2.53%
2.14% 2.13% 2.05%
OtherConsulting
TechnologyManufacturing
Education / TrainingOther professional services
HealthcareFinance
Transportation / LogisticsRetail
TelecommunicationsEngineering
Banking, Mortgages & CreditFood, Beverages & Tobacco
EnergyGovernment - State & Federal
Construction / Capital WorksNot-for-profit
Industry affiliation
37.00%
32.30%
9.13%
6.73%
5.26%
4.43%
3.07%
2.08%
Other
Manager
Consultant
Director
Business Analyst
C-level Executive
Student
Engineer
Job title
60.14%
9.85%
8.64%
5.28%
5.13%
2.27%
2.00%
1.92%
1.57%
1.52%
1.06%
0.61%
Manager
HR Manager
Project Manager
General Manager
IT Manager
Operations Manager
Quality Manager
Sales Manager
Finance Manager
Product Manager
Marketing Manager
Purchasing Manager
Managerial roles
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.
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.
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.
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Top 10 KPIs of 2010
2010 smartKPIs.com Functional Areas Taxonomy14 Functional Areas with 59 Sub-categoriesAccounting (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.
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Top 10 KPIs of 2010
2010 smartKPIs.com Industries Taxonomy24 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)
• 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)
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eabID number: sK0118001
Top 10 KPIs of 2010
Top 10 KPIs of 2010 – Countdown Analysis # 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.
1098
# 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.
% 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.
# 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.
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4
65
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eabID number: sK0118001
Top 10 KPIs of 2010
# 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.
321
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
Functional Areas Sub-categories IndustriesN/A Hospitals Healthcare
KPI record Indicator type Unit typesK41 smartKPI %
Name
% Hospital bed occupancy rate
Definition and variations
DefinitionMeasures 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
Tagshospital, occupancy
Calculation
Subordinate measures used for calculationA = # Hospital inpatient beds occupiedB = # Hospital inpatient beds
Calculation formula Formula type Trend is good when(A/B)*100 Rate Increasing
Focus
PurposeTo indicate the hospital’s efficiency regarding bed management and its spare capacity.
BSC perspective Measurement focus Impact stageCustomer Volume Process
Indicator focus Measurment type LevelLeading Quantitative Strategic
Data profile
Data capture period Standard reporting frequency Data integritySpot Daily High
Automation fit LimitationsRecommended 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 bedmanagement system.
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Top 10 KPIs of 2010
Targets
Benchmarking fit NotesSuitable 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 ahospital’s capacity.
Threshold exempleRed: <70% Yellow: 70-90% Green: >90%
Analysis and resources
Overall notesBed occupancy rate is used to assess the demands for hospital beds and hence to gauge an appropriate balance between demand for health care andnumber of beds available. Managing the bed occupancy rate can be a difficult task due to the demand that cannot be controlled by postponing (like inthe case of a guest house, for example).
Additional resourceshttp://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.pdf2. 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.pdf3. 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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3 Feb 2011 - Page 1sK651 export date:[email protected]:
eab Group Pty. Ltd.Member organization:
Functional Areas Sub-categories IndustriesSupply Chain, Procurement, Distribution Inventory Management ManufacturingProduction & Quality Management Production
KPI record Indicator type Unit typesK651 smartKPI %
Name
% Slow moving stock
Definition and variations
DefinitionMeasures 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 thanthe ones established for obsolete items.
Variations% Slow moving stock rate
Related KPIs% Obsolete items in inventory
Tagsinventory
Calculation
Subordinate measures used for calculationA = # Slow moving itemsB = # Items in the inventory
Calculation formula Formula type Trend is good when(A/B)*100 Rate Decreasing
Focus
PurposeTo assess the inventory management capability. The slow moving stock can result into obsolete stock and generate financial losses.
BSC perspective Measurement focus Impact stageInternal processes Risk Process
Indicator focus Measurment type LevelLeading Quantitative Operational
Data profile
Data capture period Standard reporting frequency Data integrityDay Weekly Low
Automation fit LimitationsNot recommended Accurate reporting for this KPI is dependent on a well functioning inventory management system.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/slow-moving-stock-651.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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eab Group Pty. Ltd.Member organization:
Targets
Benchmarking fit NotesSuitable 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 toslow-selling inventories. Such a relationship can mean that the any unsold merchandise for full creditwithin a common accepted period can be returned to the wholesaler.
Threshold exempleRed: >30% Yellow: 10-30% Green: <10%
Analysis and resources
Overall notesSlow-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 puton 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 andrealize tax advantages, where the state allows it.
Additional resourcesDolgui, A., Morel. G. & Pereira, C., E. (2006), "Information control problems in manufacturing 2006", A Proceedings Volume from the 12th IFACConference, 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.pdf2. 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.htm3. Pevec, L. & Lenart, D., "IT SUPPORT FOR PLANNING MAINTENANCE OF RAILWAY VEHICLES", available at:http://www.fpp.edu/~mzanne/ICTS2010/Pevec,%20Lenart.pdf
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/slow-moving-stock-651.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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eabID number: sK0118001
Top 10 KPIs of 2010
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eab Group Pty. Ltd.Member organization:
Functional Areas Sub-categories IndustriesFinance Profitability Any
KPI record Indicator type Unit typesK517 smartKPI #
Name
# Berry ratio
Definition and variations
DefinitionMeasures the ratio of an organization's gross profits to operating expenses.
Variations# BR# GP/OE
Related KPIs% Gross profit margin
Tagsprofit, expenses
Calculation
Subordinate measures used for calculationA = $ Gross profit B = $ Operating expenses
Calculation formula Formula type Trend is good whenA/B Ratio Increasing
Focus
PurposeTo assess the organization's profitability.
BSC perspective Measurement focus Impact stageFinancial Money Outcome
Indicator focus Measurment type LevelLagging Quantitative Strategic
Data profile
Data capture period Standard reporting frequency Data integrityMonth Monthly High
Automation fit LimitationsRecommended Robust financial data reporting capability is required to enable tracking and reporting of this ratio on a
frequent basis.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/berry-ratio-517.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Targets
Benchmarking fit NotesSuitable 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, whereasa ratio below 1 indicates that the firm is losing money.
Threshold exempleRed: <1 Yellow: 1 Green: >1
Analysis and resources
Overall notesNamed 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 themanufacturing 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 comparingtwo distributors with very different operating expenses.
Using the # Berry ratio together with other profit level indicators will provide more valid information.
Additional resourceshttp://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.pdf2. Eden, L. (1998), "Taxing multinationals: transfer pricing and corporate income taxation in North America", University of Toronto Press Incorporated,Toronto, CA3. Internal Revenue Service (2005), "ANNUAL REPORTCONCERNING ADVANCE PRICING AGREEMENTS", available at: http://www.irs.gov/pub/irs-drop/a-00-35.pdf4. 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-d0d06bdcad26/MiningForNuggets.pdf
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/berry-ratio-517.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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eab Group Pty. Ltd.Member organization:
Functional Areas Sub-categories IndustriesN/A Engineering Professional Services
Recruitment / Employment ActivitiesLegal PracticeBusiness ConsultingAccounting Services
KPI record Indicator type Unit typesK321 smartKPI %
Name
% Realization rate
Definition and variations
DefinitionMeasures 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 calculationA = $ Revenue actually earnedB = $ Potential revenue represented by the list prices
Calculation formula Formula type Trend is good when(A/B)*100 Rate Increasing
Focus
PurposeTo 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 stageFinancial Money Outcome
Indicator focus Measurment type LevelLagging Quantitative Operational
Data profile
Data capture period Standard reporting frequency Data integrityMonth Monthly High
Automation fit LimitationsRecommended Accurate reporting for this KPI is dependent on a well maintained register of the pricing list and billing
rates applied.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/realization-rate-321.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Targets
Benchmarking fit NotesSuitable 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 ratesfor companies are rarely available to the public.
Threshold exempleRed: <70% Yellow: 70-90% Green: >90%
Analysis and resources
Overall notesLower 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 entirebill value. It can be applied at organizational level, by calculating an average billing realization rate, as well as at operational and individual level.
Additional resourceshttp://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, IL2. Hildebrandt International (2004), "Anatomy of a law firm merger: how to make or break the deal", American Bar Association, Chicago, IL3. Mabey, S. & MacKay, K. (2010), "Key Performance Indicators: Understanding How to Keep Your Eye On The Dashboard", Law Practice Magazine
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/realization-rate-321.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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3 Feb 2011 - Page 1sK443 export date:[email protected]:
eab Group Pty. Ltd.Member organization:
Functional Areas Sub-categories IndustriesProduction & Quality Management Production Any
KPI record Indicator type Unit typesK443 smartKPI #
Name
# Units per man-hour
Definition and variations
DefinitionMeasures 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)
Tagsconstruction, man-hour, productivity
Calculation
Subordinate measures used for calculationA = # Production unitsB = # Man-hours
Calculation formula Formula type Trend is good whenA/B Average Increasing
Focus
PurposeTo assess labor productivity in terms of output per man-hour.
BSC perspective Measurement focus Impact stageInternal processes Volume Output
Indicator focus Measurment type LevelLeading Quantitative Operational
Data profile
Data capture period Standard reporting frequency Data integrityDay Monthly Medium
Automation fit LimitationsRecommended Accurate reporting for this KPI is dependent on a well maintained system for tracking production
outputs and man-hours.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/units-per-man-hour-443.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Targets
Benchmarking fit NotesSuitable 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.
Threshold exempleRed: <15 Yellow: 15-20 Green: >20
Analysis and resources
Overall notesAlong with the volume of units, the units/MH reporting method is one of the two basic reporting methods used in the construction and manufacturingindustries. This KPI can be influenced by factors unrelated to the labor force, such as equipment downtime, which can decrease man-hour productivity.
Additional resourceshttp://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. 142-1512. 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
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/units-per-man-hour-443.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Functional Areas Sub-categories IndustriesHuman Resources Retention Any
KPI record Indicator type Unit typesK1 smartKPI %
Name
% Employee turnover
Definition and variations
DefinitionMeasures 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
Tagsemployees, loyalty, retention, turnover
Calculation
Subordinate measures used for calculationA = # 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
PurposeTo 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 stageLearning&Growth Satisfaction Outcome
Indicator focus Measurment type LevelLeading Quantitative Strategic
Data profile
Data capture period Standard reporting frequency Data integrityQuarter Quarterly Medium
Automation fit LimitationsRecommended Difficult to obtain accurate figures if the HR systems are not enabled to timely capture the data for
this KPI.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/employee-turnover-1.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Targets
Benchmarking fit NotesSuitable 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 replacingemployees and the duration of the replacement process. The positive impact of employee fluctuationis the influx of new ideas, capabilities and energy of the new employees.
Threshold exempleRed: >30% Yellow: 20-30% Green: <20%
Analysis and resources
Overall notesThis measure may be influenced by the HR department performance, the working environment and work policies, the supervisor and team, as well asthe promotion and professional development opportunities for the future. An exit interview is a frequently used procedure that is applied by HRspecialists in order to assess and avoid the causes that determine a high employee turnover rate.
Additional resourceshttp://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.pdf2. Jackson, M., D. (1999), "Employee Retention", available at: http://www.usfa.dhs.gov/pdf/efop/efo29426.pdf3. 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
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/employee-turnover-1.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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3 Feb 2011 - Page 1sK194 export date:[email protected]:
eab Group Pty. Ltd.Member organization:
Functional Areas Sub-categories IndustriesHuman Resources Workforce Any
KPI record Indicator type Unit typesK194 smartKPI #
Name
# Management-to-staff ratio
Definition and variations
DefinitionMeasures 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 calculationA = # Employees in management positions (end of period)B = # Employees (end of period)
Calculation formula Formula type Trend is good whenA/B Ratio Within range
Focus
PurposeTo assess the organizational structure and optimize the hierarchical balance.
BSC perspective Measurement focus Impact stageLearning&Growth Volume Input
Indicator focus Measurment type LevelLeading Quantitative Strategic
Data profile
Data capture period Standard reporting frequency Data integritySpot Monthly High
Automation fit LimitationsRecommended Accurate reporting for this KPI is dependent on a well maintained register of managerial positions in
the organization.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/management-to-staff-ratio-194.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Targets
Benchmarking fit NotesUnsuitable 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 forcritical decisions. However, it may also reflect an organizational approach to employee retention anddevelopment by providing staff with many managerial level opportunities. A consequence of such astructure are higher salary costs. Professional services organizations generally fall within thiscategory.A low ratio generally reflects a flat organizational structure; it could also indicate that a company isunder-managed. It is also an approach to minimizing salary costs. However it may have negativeeffects on succession planning, as there are fewer opportunities to prepare the next generation ofexecutives by training them on the job in managerial positions.
Threshold exempleRed: <0.1; >0.4 Yellow: 0.1-0.2; 0.3-0.4 Green: 0.2-0.3
Analysis and resources
Overall notesManagement-to-staff ratio reflects the career path development outlook, the organizational approach to personnel management, being therefore animportant 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 becalculated 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 talentdevelopment and cost constraints.
Additional resourceshttp://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.pdf2. State of Texas, "Management span of control", available at: http://sao.hr.state.tx.us/advisory/FTEMgmntStaffRatio.html3. United States General Accounting Office (1999), "Social Security Administration: Compliance With Presidential Directive to ReduceManagement-to-Staff Ratio", available at: http://archive.gao.gov/paprpdf2/161619.pdf
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/management-to-staff-ratio-194.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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3 Feb 2011 - Page 1sK347 export date:[email protected]:
eab Group Pty. Ltd.Member organization:
Functional Areas Sub-categories IndustriesPortfolio and Project Management Project Management Any
KPI record Indicator type Unit typesK347 smartKPI #
Name
# Earned man-hours
Definition and variations
DefinitionMeasures 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
Tagsman-hours, constructions
Calculation
Subordinate measures used for calculationA = # Planned man hoursB = % Progress of work completed
Calculation formula Formula type Trend is good whenA*B Volume Increasing
Focus
PurposeTo assess job productivity and projects progress.
BSC perspective Measurement focus Impact stageInternal processes Volume Output
Indicator focus Measurment type LevelLeading Quantitative Operational
Data profile
Data capture period Standard reporting frequency Data integritySpot Monthly Low
Automation fit LimitationsNot recommended Accurate reporting for this KPI is dependent on a well maintained system, capable to record progress
at any point.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/earned-man-hours-347.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Targets
Benchmarking fit NotesUnsuitable 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 exempleRed: <80 Yellow: 80-100 Green: >100
Analysis and resources
Overall notesInvolvement 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 resourcesReid, 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.pdf2. Cox et al. (2003), "Management's Perceptions of Key Performance Indicators for Construction", Journal of Construction Engineering andManagement, 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
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/earned-man-hours-347.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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3 Feb 2011 - Page 1sK4808 export date:[email protected]:
eab Group Pty. Ltd.Member organization:
Functional Areas Sub-categories IndustriesSupply Chain, Procurement, Distribution Inventory Management Retail
KPI record Indicator type Unit typesK4808 smartKPI #
Name
# Inventory to sales ratio (ISR)
Definition and variations
DefinitionMeasures 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)
Tagsinventory, sales, retail
Calculation
Subordinate measures used for calculationA = $ Average inventory valueB = $ Average sales revenue
Calculation formula Formula type Trend is good whenA/B Ratio Within range
Focus
PurposeTo determine whether or not the company is carrying too much inventory, by indicating the inventory on hand.
BSC perspective Measurement focus Impact stageInternal processes Money Output
Indicator focus Measurment type LevelLeading Quantitative Operational
Data profile
Data capture period Standard reporting frequency Data integrityMonth Monthly Medium
Automation fit LimitationsRecommended 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.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/inventory-to-sales-ratio-4808.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Targets
Benchmarking fit NotesSuitable 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 andproduct type.
Threshold exempleRed: <1; >1,6 Yellow: 1-1,2; 1,4-1,6 Green: 1,2-1,4
Analysis and resources
Overall notesCarrying too much inventory on the company's books can be an obstacle for operational and organizational growth, as this creates hesitation to produceor hire more, until inventory drops down to a more confortable level.
Additional resourceshttp://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.pdf2. Financial Forecast Center (2011), "U.S. Inventory to Sales Ratio Forecast", available at: http://www.forecasts.org/inventory-to-sales-ratio.htm3. U.S. Census Bureau (2006), "Total Business Inventories / Sales Ratios: 2001 to 2010", available at:http://www.census.gov/briefrm/esbr/www/esbr024.html
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/inventory-to-sales-ratio-4808.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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eabID number: sK0118001
Top 10 KPIs of 2010
3 Feb 2011 - Page 1sK1749 export date:[email protected]:
eab Group Pty. Ltd.Member organization:
Functional Areas Sub-categories IndustriesProduction & Quality Management Maintenance Any
KPI record Indicator type Unit typesK1749 smartKPI #
Name
# Maintenance backlog
Definition and variations
DefinitionMeasures 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
Tagsmaintenance
Calculation
Subordinate measures used for calculationA = # Man hours of incomplete maintenance work required to be completed
Calculation formula Formula type Trend is good whenA Volume Decreasing
Focus
PurposeTo indicate the adherence to the maintenance plan.
BSC perspective Measurement focus Impact stageInternal processes Risk Process
Indicator focus Measurment type LevelLeading Quantitative Operational
Data profile
Data capture period Standard reporting frequency Data integritySpot Monthly Low
Automation fit LimitationsNot recommended Accurate reporting for this KPI is dependent on having a sound maintenance plan and monitoring it
periodically.
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/maintenance-backlog-1749.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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Targets
Benchmarking fit NotesSuitable 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 maintenanceplan, the value of this indicator should be close to zero.
Threshold exempleRed: >10 Yellow: 5-10 Green: <5
Analysis and resources
Overall notesPrioritizing 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 resourcesUnited 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.pdf3. 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
Also available at: http://www.smartkpis.com/kpi-key-performance-indicator/maintenance-backlog-1749.htmlIndicator documentation © eab group Pty Ltd 2010. Terms of use available at: http://www.smartkpis.com/terms-of-use.html ('Premium content terms')
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© eab group Pty Ltd 2011
eabID number: sK0118001
Top 10 KPIs of 2010
This report is part of a collection of smartKPIs.com research reports, dedicated to the analysis of the most popular KPI examples in 2010:
More details about these reports and other smartKPIs.com Premium products and services are available at:
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Appendix A: Related Reports
Top 25 Accounting KPIs of 2010Top 25 Customer Service KPIs of 2010Top 25 Finance KPIs of 2010Top 25 HR KPIs of 2010Top 25 Information Technology KPIs of 2010Top 25 Knowledge Management KPIs of 2010Top 25 Marketing KPIs of 2010Top 25 Portfolio Management KPIs of 2010Top 25 Project Management KPIs of 2010Top 25 Logistics and Distribution KPIs of 2010Top 25 R&D KPIs of 2010Top 25 Sales KPIs of 2010
Top 25 Academic Education KPIs of 2010Top 25 Call Centre KPIs of 2010Top 25 Food and Beverage Service of 2010Top 25 Local Government KPIs of 2010Top 25 State Government KPIs of 2010Top 25 Healthcare KPIs of 2010Top 25 Hotel / Accommodation KPIs of 2010Top 25 Manufacturing KPIs of 2010Top 25 Professional Services KPIs of 2010Top 25 Property Management KPIs of 2010Top 25 Real Estate Transactions KPIs of 2010Top 25 Retail KPIs of 2010
Appendix B: About eab groupProfileEstablished 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.
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.
By functional area (department) By industry
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© eab group Pty Ltd 2011
eabID number: sK0118001
Top 10 KPIs of 2010
Appendix C: eab group Services
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).
2. smartKPIs Premium
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.
3. Assessment / Audit / Review
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
4. Training
Core courses (1-2 days)1. Integrated Performance Management: Linking Strategic, Opera-
tional and Individual performance;2. Measuring and learning with Key Performance Indicators;3. Implementing and using a Balanced Scorecard based perfor-
mance 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.
Customized solutionsPre-packaged 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
• 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.
7. Operational performance management solutions
Supplier performance management – Development and implementation of supplier scorecards for both products and services suppliers
Portfolio performance management• Development of Portfolio Dashboards and Project Scorecards• Identification of Key Risk Indicators and establishment of Risk
Scorecards
Benefitsrealization 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).
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© eab group Pty Ltd 2011
eabID number: sK0118001
Top 10 KPIs of 2010
Appendix D: eab group Online Portfolio
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.
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.
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.
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
eabID number: sK0118001
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 statementeab 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 thelatest version of the documentation, smartKPIs Premium should be consulted.
Published by:
eab groupLife.lab Building198 Harbour Esplanade, Suite 606Melbourne Docklands, VIC 3008, Australia
Telephone (international): +61 3 9670 2979 Fax: +61 3 8677 6519E-mail: [email protected]
www.eabgroup.com.au | www.smartKPIs.com
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R=127
G=147
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eab group Pty. Ltd.Life.lab Building, Suite 606, 198 Harbour Esplanade, Melbourne Docklands, VIC 3008T: +61 3 9670 2979, F: +61 3 8677 6519, E: [email protected]
