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MaintenanceOnlineMaintenanceKeyPerformanceIndicators
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MaintenanceKeyPerformanceIndicators
Author:PaulWheelhouse
ABSTRACT
Asummaryisprovidedofimportantconsiderationswhendesigningkey
performanceindicatorsaspartofanyperformancemanagementsystem.
Technical,behaviouralandpsychologicalaspectsarealltouchedupon.Important
resultsfromphysics,statistics,informationtheoryandcontroltheoryareallused
toprovidepracticalguidance.Keyperformanceindicatorsprovidingawindow
sothatthesuccessorotherwiseofastrategycanbejudgedandanynecessary
actionstakenareexplored.TheneedisemphasisedforSMARTmeasures
whichcanbeinfluencedbytheactionsofthosewhoarejudgedbythem.
Ensuringthatthemeasurescoverallareasintheformofabalancedscorecard,
andarearrangedinahierarchy,ismentioned.Threedifferenttargetsetting
approachesforkeyperformanceindicatorsarediscussed,viz.trending,
benchmarkingandbestofthebest.Howtheorganisationalcultureand
psychologywillinfluencetargetsettingisdiscussed.Accuracy,errorand
uncertaintyofmeasuresareexplored,togetherwiththeneedtomeasure
frequentlyenoughtospotchanges.Theneedtoseparatesignalsfromnoise,andonlytakeactionswhensignificantchangesoccur,is
covered.Drawingoncontroltheory,theneedtoconsiderthedelaybetweencauseandeffectinordertoensurestabilityofthe
performancemanagementsystemisdiscussed.Finally,achecklistguideforkeyperformanceindicatoressentialsisincluded.
REASONSFORINDICATORS
Keyperformanceindicatorsclosetheinputprocessoutputloopandlinkbacktowhatwasexpected,andultimatelytothestrategy.Itis
thereforeonlybymonitoringkeyperformanceindicatorsthatwecanseeifthestrategyisactuallyworking.
Keyperformanceindicatorsarethereprimarilytoseewhetherthestrategyisworkingandwherechangesmightberequired.Itfollows
thereforethattheindicatorsthemselvesneedtorelatetocriticalsuccessfactorsinthestrategyitself.Inotherwords,ifsafetyfeatures
heavilyinourstrategy,thenwemightexpecttoseeindicatorsbasedonnearmisses,incidents,accidentsandstaffbehaviours.
Indicatorscanalsobeusedasafeedtothecontinuousimprovementprogrammeandtohelpwithareviewofplannedmaintenance
routinesandforsupplierappraisals.
Indicatorsthemselvesmustbepartofaperformancemanagementsystemsothatstaffactuallydoeswhatwewantthemtodointhe
mostcosteffectivemanner.Justmeasuringsomethingaffectsbehaviour.Forexample,somewouldsay,IliketodowhatIenjoydoing
andalsowhatmybossmeasures.Sothereneedstobecarefulchoiceofmeasurestoensurethebehaviourswewantareencouraged.
Forexample,inrecentyears,shorttermprofitmeasuresinthebankshaveencouragedexcessiverisktakingbystaff.
Measuresshouldbelinkedtorewardsforbothstaffandalsokeysuppliersandserviceproviders.Rewardsthemselvescanbeboth
financialandnonfinancial.Nodoubtwehaveallseenemployeeofthemonthawardswhencheckingintohotels.
Whoeverismeasuredbyakeyperformanceindicatormusthavethemeansandthetimetoinfluenceitsvalue.Themeasuresneedtobe
SMART,i.e.
Specific/simple
Measureable
Achievable/acceptable/attainable
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Relevant/realistic
Timebound
COVERAGE
Anorganizationcarryingoutmaintenanceislikeamachineithasfunctionsandneedstobeviewedasasystem.Thecoverageof
indicatorsneedstobecomprehensivewithoutbeingexcessive.Withcomputersystems,itispossibletooverdoseonindicators.The
operativewordhereiskeyindicators,solookforfewerthantenratherhaving,say,forty.Weshouldthinkofourkeyperformance
indicatorslikefood:nottoomuch/manywithabalanceforgoodhealth.
Thebalanceforindicatorscomesfromablendof:
Financial(expenditure)andnonfinancial(numberofjobscompleted)
Inputs(money,methods/expertise,materials/spareparts),processes(carryingoutreactivejobs)andoutputs(performance/availability)
Leadingindicators(nearmisses)andlaggingindicators(accidents)
Productivity(reliability),service(backlog,responsetimes)andcosts(budgetsvalueofsparepartstock)
Typicalmaintenancemeasuresmightinclude:
Plantdowntime
Equipmentreliability
Percentageovertime
Annualmaintenancebudget/capitalcost
Percentageofplannedjobscompletedontime
Percentageofjobswhicharebreakdowns
Costsversusbudgets
Valueofspareparts
Responsetimes
Backlog
Hierarchyofmeasures
Theindicatorsneedtoformahierarchy.Thelowestleveloneswillbemeasureswhichfrontlinestaffcaninfluence.Thesecanthenbe
combinedtogivemeasuresforthenextmanagementlevel,andsoon.Thisisbestillustratedbyanexampletherearefivemeasures
whichthetechniciansandoperatorsonabottlingplantcaninfluence,viz.
Firsttimepassrateforquality
Customercomplaintsrelatingtounderfilling
Meantimebetweenfailures(MTBF)forthefillinghead
Meantimetorepair(MTTR)forthefillinghead
Numberofcasesproducedpershift
Productmix
Thefinalmeasure,theproductmix,cannotbeinfluencedbythefrontlinestaff.Thisisultimatelydeterminedbywhatthecustomersare
buying,butisalsogoingtobeaffectedbytheorganizationplanning,forecastingandlevelsofstockholdingaccuracies.Itneedstobe
includedthough,becausedifferentgradeshavedifferentmaximumproductionratesandtheseratesneedtobetakenintoaccounttogive
realistictargets.
Thesixbasemeasuresarecombinedintoquality,availabilityandrateofworkingindicesforeachbottlingplant,whicharethenrolledup
intoanoverallequipmenteffectivenessmeasure(OEE).TheOEEsforeachbottlingplantarethencombinedtogiveameasureof
productivityforthewholeorganization.
Thus,thefrontlinestaffsarejudgedonthebasemeasures.ThemanagementofeachbottlingplantisjudgedonitsOEEfigure,whichis
derivedfromthebasemeasures.Inturn,theorganizationexecutivesinheadofficearejudgedbythecombinedOEEfiguresforthewhole
organization.
TARGETSETTING
Havingdecidedonwhichindicatorstomonitor,thenextquestiontobeaskediswhatshouldbethetargetvalues?Shouldthetargets
simplybelastyearsonesshouldtheyberatchetedupalittleorshouldatoughtargetbesettoencourageimprovements?Theanswer
turnsouttobeamixtureofscience,organizationalcultureandpsychology.Letusdealwiththesciencefirst.
AveragesandTrending
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Ifourdowntimehasbeenvariablelastyear,buttheaverage(mean)figurehasbeen3%,wecouldsetthisasourtargetdowntimefornext
yearbecauseitisrepresentativeofourdowntimeresults.However,mostvariablesareevenlydistributedaroundthemeanvaluesonext
yearsdowntimeisjustaslikelytobelowerthanthisyearsfigureasitistobehigher.
Trendanalysisisoftenusedwheninterpretingconditionmonitoringdataortryingtopredictwhattheyearendexpendituremaybe.Itis
simplyplottingresultsonagraph,drawinginalineofbestfitandthenprojectingitforwardintothefuture.Thegreaterthescatterofdata
pointsandthelongerintothefuturetheprojectionismade,thenthegreatertheerrorintheprediction.Averagesandtrendingwilltendto
producerepresentativetargetswhicharenottoochallenging.
BestoftheBest
Ifweweretosetourtargetsonthebestvaluewhichhadeverbeenachievedtodate,thenthatwouldbemorechallengingthatusingsay
anaveragevalue.Butwecangomuchfurtherthanthiswecanusethebestofthebest.Toillustratetheprinciplebehindthisconsidera
golferwhoseresultsforfivehalfroundsofgolfareshowninFigure1,togetherwiththeparscoresforeachhole.
Figure1Golfscores
Anyonewhohaseverplayedgolfwillrecognisethevariationinscoresbetweenoneroundandthenextone!Thebestscoreachievedwas
36fromroundnumber4(circled)theworstwas43.
Thegolfercouldsetatargetof36forfuturerounds.Thiswouldbeatargetbasedonthebestresult.Amorechallengingtargetwouldbe
whatiscalledtheeclecticscore:therearenineholessowhatwouldbethetotalscoreifwecouldcombinethelowestscoreforeachhole
irrespectiveofwhichroundthatscorewasachieved?Theseeclecticscoresareconnectedbytheheavylinesshownintheabove
diagram.Addingthemtogetherwegetatotalof28.Thisislessthantheparvalueforthenineholesthataprofessionalgolfercouldbe
expectedtoachieve.
Thiseclecticscoreisanexampleofabestofthebestvalue.Thesameprinciplecould,ofcourse,beusedforexpenditure,availability,
tasklengths,etc.Bestofthebesttechniquesproduceverychallengingtargets,buttheindividualvalueshaveallbeenachieved,soit
couldbearguedthatthesetargetsareachievable.Stretchtargetssuchasthesecanthereforebeusedtoaccelerateimprovementsin
performance.
Benchmarking
Benchmarkinghasbeenwidelyusedtosettargets.Itcanbedoneinternallywithinasingleorganizationorexternallyacrossdifferent
organizations.Internalbenchmarkinghastheadvantagethateveryoneisusingthesameorganizationproceduresand,asconfidentiality
isnotanissue,itisstraightforward.Itsdisadvantagesarethatinternalpoliticscandistorttheresultstheinitiativecouldalsobeseenas
lowpriorityandtheopportunityforlearningsomethingentirelynewisrestricted.Externalbenchmarkinghastheadvantagethatsomething
entirelynewcouldbelearnedbylookingatanissuefromanentirelydifferentpointofview.However,confidentialitycouldbeaproblem
therecouldbelegalissuesifcompetitorsshareinformation,andapplyingnewproceduresfromanotherorganizationisnotwithoutrisk.
CombinationTechniques
Oneoftheabovetargetsettingtechniquescouldbeusedindependentlyorseveralcouldbeusedincombination.Forexample,consider
thetableofFigure2,wheredifferentaspectsofmaintenancehavebeenestablishedforfouridenticalfactories.
Figure2Annualtotalcostofmaintenanceinfourfactories
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ThebenchmarkfactoryintheabovegroupisFactory2.Itstotalcostofmaintenanceisthelowestat10.3millions.Thelowestcostsfor
eachitemmakingupthetotalcostofmaintenanceareshowninbold.Addingthesetogethergivesatotalcostof7.2millions.Thisvalue
wasderivedbybenchmarkingallfourfactoriesandthenapplyingthebestofthebestprinciple.
OrganizationalCultureandPsychology
Organizationshavepersonalitiesjustlikepeople:wecanthinkofeachorganizationhavingitsownculture.Oneaspectofcultureishow
theorganizationwillreactifakeyperformanceindicatordoesnotachieveitstarget.Ifpunitiveactionswouldresult,thenonewouldbe
advisedtoseteasilyachievabletargets!
Conversely,ifanorganizationencouragesthesettingofstretchtargetswithrewardforeffort,evenifaverytoughtargethasnotquite
beenachieved,thenthebestofthebestcouldbeusedasatargetsettingtechnique.Incidentally,organizationswhichsetstretchtargets
anddontachievethemareoftenbetteroffthanthosewhichalwaysplaysafebecauseIfyoureachforthestarsyoumaygettothe
moon.
Psychologyalsoappliestokeyperformanceindicators.Anincrementalincreaseinatargetwillnottriggeranydifferentbehaviouror
searchingforbettersolutionspeoplewilljusttendtocontinuetodothesamethings.However,aradicallydifferenttarget(suchashalving
plantdowntime)willtriggeroutoftheboxthinkinganddifferentwaysofviewingtheissues.
InthebookGoodtoGreat(2001)byJimCollinsgreatleaderswerefoundtouseambitioustargetsasawayofdrivingupperformance.
AftertheUSSRhadachievedearlysuccessesinspacePresidentKennedyannouncedthattheUSAwouldputamanonthemoonwithin
tenyears.Inthelate1960sBoeingdecidedtoproduceawidebodiedpassengeraircraft(the747)thatwouldbefarbiggerandmuchmore
complicatedthananythingavailableatthetime.
Thesetwoexamplesshowhowtoughtargetscanbeusedtomotivate.Thereisofcourse,afinebalancetobeachievedbetweenatough
targetwhichwillbedifficulttoachieveandonewhichstaffthinkisimpossible.Obviously,settingatargetwhicheveryoneviewsasbeing
impossiblewilljustactasademotivator.Highachieverstendtolikethechallengefromtryingtoachievesomethingwhichisviewedas
beingaround50%possible.
DETAILEDCONSIDERATIONS
Asfaraskeyperformanceindicatorsareconcerned,aswithmanythings,thedevilisinthedetail.Error,accuracy,anddynamicsneed
tobeconsideredinanyperformancemanagementsystem.
Accuracy,ErrorandUncertainty
Theaccuracyrequiredforourpurposesmustbeestablished.Forexample,failureratesaccuratetowithinafactoroftwomaybe
acceptableforreliabilitycalculations,whereasexpendituremustbetrackedtothenearestpenny.Allparametersareuncertaintodiffering
degrees,and,anysignalwillhavesomeformofassociatederrorandnoise.Thiserrorwillneedtobeassessedandtakenintoaccount
withintheperformancemanagementsystem.
Errorscanbebothsystematicandrandom.Supposeouroperatorsareaskedtorecorddowntime.Iftheyareinstructedtoignoreall
eventswhichresultinlessthanfiveminutesdowntime,thenthiswillresultinasystematicerrorandtherecordeddowntimewillalways
belessthanthetruefigure.Iftheyareinstructedtologdowntimeeventstothenearesthouronly,thiswillresultinrandomerrorsinthe
measurement.However,systematicandrandomerrorcanbeassessedbyacombinationofcalibrationandrepeatedmeasurements.
Statisticaltechniquescanbeusedtoassessifasignalisabovethelevelofexpectednoise.Clearlyweonlywanttotakeactionswhena
significantchangehasoccurred.Takingactionsbasedonnoisealoneisarecipefordisaster.
Oftentheparameteritselfcanallowustomakesomeinformedestimatesoflikelyerror.Supposethatsafetyperformanceisimportant
andthatwehavedecidedtomonitorthenumberofnearmisseseachyear.Lastyearsfigurewas4andthisyearitwas3.Isitpremature
tostartcongratulatingourselves?Measuresbasedonsmall,discrete,numberstendtofollowthePoissondistribution.Thestandard
deviationofthisdistributionisalwaysthesquarerootofthemeanvalue.Thesquarerootof4is2,sowemightexpectthataround70%
oftheannualfiguresforournearmisseswillbeintherange2to6.Therefore,thefigureof3nearmissesthisyearisnotsignificantly
differentfrom4lastyearandcongratulationswouldbepremature.
Itisimportanttobeabletospotagrosserrorwhichmightdistortourkeyperformanceindicators.Thisissometimesreferredtoasbeing
abletospotastranger.Supposeoneofourtechnicianshasloggedaseriesofvibrationmeasurementsasfollows:
Suspicionfallsonthevalue26.54becauseitissomuchlargerthantheothervaluesforexample,coulditbethatitwasactually2.65
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whichwaswronglyrecorded?
Thehighestnumberinthissetis26.54andthelowestis1.04,thereforetherangeis25.5.Ifweignorethesuspiciouslyhighnumberthen
thenewrangeis9.721.04or8.68.Theratioofthesetworangesis25.5/8.68orapproximately3.Ifthehighnumberweregenuine,then
thisratioshouldbenolargerthan2.Thereforethelargenumberisspuriousandweshouldeithertakethereadingagain,or,ifthatisnot
practical,thenignorethelargenumberandnotuseitbecauseitsinclusionwilldistortouranalysis.
FrequencyofMeasurement
Someofthekeyindicatorswillbeavailablecontinuously:motorelectriccurrentdrawnbyacriticalpieceofequipment,forinstance.
However,otherindicatorsperhapshavetobemeasuredperiodicallytherefore,wemustdecidehowoftenthisneedstobedone.Youmay
havenoticedinoldHollywoodcowboyfilmsthatthestagecoachwheelsseemtobemovingbackwards,eventhough,thestagecoachis
clearlymovingforward.Inoldernewsreportsthehelicopterrotorssometimesappeartobemovingerratically,insteadofsmoothly.Bothof
theseexamplesaretheresultoftheshutterspeedofthecamerabeingtooslowtoaccuratelyrecordthemovement.
Inordertorecordaparameterfaithfullyitmustbesampledatdoublethehighestfrequencyitexhibits.(SeeHartley/Tuller/Shannon
samplingtheorem,1948).Therefore,tofaithfullyrecordaudiosignalsonaCD,thedigitalsamplesarerecordedat38kHzsincethe
highestaudiofrequencypresentis19kHz.Ifweconsiderthatpumpperformancewilldeteriorateovera12weekperiod,thenwemust
checkitatleastevery6weeks.Thereisnoharminsamplingmoreoften,providedhighcostsarenotinvolved,asthesamplingtheorem
merelysayswhattheminimumneedstobe.
SystemResponse
Keyperformanceindicatorsarepartofamethodorsystem.Allsystemstaketimetorespondandthisresponsetimeneedstobetaken
intoaccount,otherwise,theresultwillbewildoscillationsinthemeasuredvalues.
Considerthisscenario.Igointomykitchenfirstthinginthemorningandturnonthehottap.Foraperiodoftimethewaterremainscold
asallofthestandingwaterinthepipebetweenthetapandthehotwatertankisdisplaced.Thenthewatertemperaturestartstorise,this
isnotimmediate,because,thehotwaterlosessomeenergyasitwarmsthepipeworkbetweenthehotwatertankandthetap.Eventually,
thehotwaterachievesasteadyvalue.AplotofhotwatertemperatureatthetapversustimewilllooklikethatinFigure3.
Figure3PlotofTemperaturevs.Time
ThebehaviourshowninFigure3adeadtimefollowedbyacharacteristicrisetimeisthesimplestresponseasystemcanexhibit.
Morecomplexsystemscanexhibitlongerdelaysandmorecomplicatedresponsecurves.Wheneverachangeismadetooursystem,it
willtaketimeforthekeyperformanceindicatortochangeitsvalue.Ifweexpectanimmediatechangeandkeepmakingchangesuntil
somethingeventuallyhappensthentheindicatorwilleventuallyovershootandfurtherchangeswillresultincontinuedoscillations.We
needtobepatientand,aftermakingachange,waituntilafteranydeadtimeperiodandcharacteristictimeconstant,toseewhatthetrue
effectthechangeshavehad.Thatway,theperformancemanagementsystemwillstayincontrol.
CONCLUSIONS
Maintenancekeyperformanceindicatorsprovideawindowonourstrategytheyletusseehowwellitisworking.Inordertoachievea
robustperformancemanagementsystemweneedtobecarefulinourchoiceofmeasures,toconsiderimperfectionsinthem,thedelay
betweencauseandeffectandhowtheywillinfluencebehaviours.
ChecklistofKeyPerformanceIndicatorsEssentials
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Simpleperformancemeasuresforservice,performanceandcost,linkedtotheorganizationsneeds,aredisplayed,understoodand
ownedbyall
Global,comprehensiveandaccurateequipmenthistorysystemwithastandardizedassetstructurefacilitatesinternalandexternal
benchmarkingactivities
Trendsinmaintenanceandreliabilityperformancearerecognisedandrootcausessought
Plantkeyperformanceindicatorsarebuiltintoahierarchywhichisusedbytheorganizationwideperformancemanagementsystem
Stretchtargetsareusedtoaccelerateimprovementsinperformance
THEAUTHOR
PaulWheelhouseisadirectorwiththeconsultancycompanyRedWheelSolutions,whichspecialisesinmaintenance,assetmanagementandreliabilityimprovement.(For
furtherdetailsseewww.redwhweelsolutions.com)HeisalsoavisitinglecturerwithManchesterUniversitywherehelecturesontheMaintenance&AssetManagementMSc
programme.TogetherwithStuartEmmett,hecoauthoredthebookcalledExcellenceinMaintenanceManagement,ISBN9781903499658.
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Jointhediscussion
SauroRiccetti ayearago
KeyPerformanceIndicatorsenable,amongtomanydifferentmanagementfunctions,tochallangeequipment
operatorsthatareresponsibleoftheline/machine.TheregularanalysisofKPIshowsthetrendoftheline,enable
comparisonandcontrastwithhistoricalfigurestochallange,asresult,equipmentoperatorstodiscoverpotential
areasofimprovement.
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WHAT'STHIS?
ALSOONMAINTENANCEONLINE
SpurGearPumpVibrationAssessment
AnApproachtoWorldClassAssetManagement
1comment2yearsago
1comment2yearsago
GuillermoIVelascoThanks.Excellentarticle,
SauroRiccettiFrommanufacturingmanagers,
valuableInfo..
maintenanceisoftenseenasadisturbancetothe
productionactivity.Lackofknowledgeandashort
OneDayValueDrivenMaintenanceMasterClass
AssetManagementAreYouQualified?
3comments2yearsago
1commentayearago
MaintenanceOneSteve,MarkHaarmanisdefinitely
MaintenanceOneISO55000AssetManagement
presentingattheVDMMasterClass,takingplaceon
23October.See
Overview,principlesandterminology(launched
January2014).Viewdetails
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