Business KPIs

Perfect Order is a SCOR metric  with some directions how to set up a measurement / formular, but not very detailed, therefor this comment tries to describe an idea how to measure perfect order in real business life (source: Edward Frazelle, Georgia Logistics Institute) for the area "Customer" and KPI: Perfect Order.

Perfect Order Characteristics:

has the right amount of products; is damage free; arrives on-time; arrives at the right location; is filled completly on the first call; in entered correctly; is communicated via a custoemr-specific medium (e.g. EDI, fax, phone, internet etc); has no invoicing or collection errors

Perfect Order Calculation:

Order Fill-Rate * Order Shipping Accuracy * Damage free order percentage *On-Time Order Percentage * claim free Order Percentage * Order Entry Accuracy * Order Comm Accuracy * Order Doc Accuracy

Example Perfect Order Calculation:

has the right amount of products; 97%
is damage free; 98%
arrives on-time; 93%
arrives at the right location; 96%
is filled completly on the first call; 72%
in entered correctly; 94%
is communicated via a custoemr-specific medium (e.g. EDI, fax, phone, internet etc); 89%
has no invoicing or collection errors; 93%
===============================
                                           48%

Perfect Order Data Elements:
# of orders - ERP (SD)
# of orders where products were availble w/in lead-time - Available-to-promise (SCM)
# of orders that were picked w/ right parts and quantities - WM
# of orders delivered with damaged products - WM
# of on-time delivered to customer requested ship-date orders - TM, EM
# of orders with claims - CRM; financial SCM
# of orders that were captured with incorrect attributes (e.g. part #, qty, request date, delivery address) - CRM / ERP (SD)
# of orders with messages that were commnuicated in the method the customer requested - ERP
# of orders that were delivered with the requested documentation - WM, TM

While working with the SCOR and AMR metric model I got the impression that some important metrics are not on your list - e.g.
Order Fulfillment Cycle Time; Source Cycle Time; Make Source Cycle Time; Deliver Cycle Time
Inventory total - in pieces; Inventory Raw Material - in pieces; Inventory WIP - in pieces; Inventory FG - in pieces
Perfect Order Fulfillment for Purchase Order - on header and on item level
Perfect Order Fulfillment for Sales Order - on item level

As we start to validate the metrics with customers I will updaet the list in the future.

Hi Christine,

thanks for your valuable input. I agree that our current KPI list is not complete yet. Therefore you are absolutely welcome to propose additional KPIs. To keep better track of the individual KPIs I suggest to create a new page for every ney KPI (button "add page"). I have already done this for the KPI "Perfect Order":

https://wiki.sdn.sap.com/wiki/display/BPX/Perfect+Order

It would be perfect if you could add the KPI details there... 

Regards,
Nadim

Nadim, Florian,

I would like to add a section for COmmunity KPI's... The question is: would you add those to Business, Financial, HR or to a new section ?

 Great to see this initiative.

 Marco

Hi Marco,

nice to hear that you like our initiative. Thanks for your comment. I think we should not create a new section on the level of Financial, Customer, Processes etc. I think generally speaking the community KPIs fall into the section Processes. Therefore I think you should include them in the process section. If you want you can create a special sub-group there for these KPIs.

Regards,
Nadim

First of all, this KPI Wiki is great and I hope everybody is contributing even more KPIs.

 Here are my questions/recommendations:

 1. Are there any plans to populate,link these KPIs with real example performance data from our customers, linked to industry and solution they use? Similar like the VLM (Value Life Cycle Management) Tool from Value Engineering? If so, it would make this tool even more powerfull.

 2. Is there any possibility to integrate external (Internet) information into this Wiki, since I came along other KPI Wikis in the Internet.

 Cheers Christian.

Hi Christian,

I am glad that you like the wiki  Thanks for your recommendations and ideas. Here are my thoughts on this:

1. Our initial goal is to come up with a common KPI language. Therefore this is really the first step we want to make. We need some time to get the KPI definitions settled. Once we have established this common KPI language we would eventually like to implement these KPIs into our software solutions. Of course it would be great to link to customer values, however, I don't know how much sense it makes at present since we are still in the process of defining the KPIs. Nevertheless some KPI definitions are already quite mature, so if you think it makes sense to link to real customer values, please feel free to do so.

In the long run the common KPI language will allow for real benchmarking based standardized KPIs.

2. It would be great to combine the existing information into on central repository. Therefore I really encourage you to look for other related sources (as far as I understood you know already some, some are known to us as well). In case you find a good KPI definition I suggest to link from the respective KPI page inside this wiki to the external web-site (and vice versa if you like).

Any additional ideas are also welcome. Have you already had the chance to take a look at the related blogs? On the one hand there is my own blog, on the other hand there is also a number of external blogs that relate to our project. They are linked on the KPI Home page

Regards,

Nadim 

Direction of Improvement

As explained in the Business KPI Community Home Page, a new KPI page has to be created based on the KPI Definition Template.

When inserting the variables, you need to choose a value for the field Direction of Improvement. Three values are available: maximaze, minimize, range.

What this variable is intended for, and what is the meaning of these values?

Cheers, Davide

Hi Davide,

the meaning of this variable is as follows:

Direction of Improvement: Describes in which direction the KPI values get better. Three values are possible here:
Maximize: it is generally desirable to maximize the value of this KPI (typical examples: profit, customer satisfaction, etc.).
Minimize: it is generally desirable to minimize the value of this KPI (typical examples: all sorts of cost related KPIs, lead times, etc.).
Range: For some KPIs it is not clear minimizing or maximizing is optimal. They should be kept in a certain range.  

Here is the related link:https://www.sdn.sap.com/irj/sdn/wiki?path=/display/BPX/Business+KPIs&focusedCommentId=59859 

Does this answer your question?

Regards,

Nadim

sorry, I got the link wrong. Here is the correct one:

https://wiki.sdn.sap.com/wiki/display/BPX/Information+about+KPIs

Yes Nadim, this thoroughly answers my questions, thank you very much indeed! I'm sorry but I'd missed page you've quoted.

Cheers, Davide

Hi,

 just wanted to congratulate you for this initiative. I find it really useful and I think it is going to make a difference.

Rafael