Industry standards for KPI’s at T

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Industry standards for KPI’s Public Version

Industry standards for KPI’s at T

HE

C

OMPANY

Appendices

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Appendices Table of Contents

APPENDICES TABLE OF CONTENTS ... 70

1. ORGANIZATIONAL CHART ... 71

2. INDUSTRY STANDARD KPI DEFINITIONS ... 72

2.1. DEMAND MANAGEMENT ... 72 2.1.1. Sales ... 72 2.1.2. Market ... 72 2.1.3. Product development ... 72 2.2. SUPPLY MANAGEMENT ... 72 2.2.1. Customer ... 73 2.2.2. Supplier ... 73 2.2.3. Operational ... 73 2.3. SUPPORT SERVICES ... 73 2.3.1. Human Resources ... 73 2.3.2. Information Technology ... 74

2.3.3. Finance & Regulatory ... 74

2.4. FINANCE... 74

2.4.1. Stock exchange ... 74

2.4.2. Financial health ... 74

2.4.3. Financial control ... 74

3. THE COMPANY KPI DEFINITIONS ... 75

3.1. MARKETING &SALES ... 76

3.2. OUT OF HOME ... 78

3.3. MANUFACTURED GOODS ... 80

3.4. SUPPLY CHAIN SHARED SERVICES ... 81

3.5. HUMAN RESOURCES ... 83

3.6. FINANCE... 85

4. WEB SURVEY QUESTIONS AND RESPONSES ... 86

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1. Organizational chart

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2. Industry Standard KPI Definitions

This appendix shows a mix of the different KPI’s the author of this thesis found in literature, at the internet and documentation from consultancy firms.

Sources are the Gartner Institute, Deloitte, Price Waterhouse Coopers and the Harvard Business review.

2.1. Demand Management

2.1.1. Sales Measures:

Consumer sales growth

Consumer/shopper satisfaction Retail out of stocks

Vendor and customer profitability Customer profitability

Forecast demand error

Sales opportunity index, Sales cycle index, Sales close index, Sales price index, Cost of sales, Forecast accuracy, Customer retention index

EBITDA Profitability, Business Value Growth, Brand Recognizebility, Market Share Growth, Lost Clients Rate, Prime Clients Rate, Investment Project Evaluating Speed

2.1.2. Market Measures:

Target market index, Market coverage index, Market share index, Opportunity/threat index, Product portfolio index, Channel profitability index, Configurability index

Market segmentation factor (the percentages of the “mix” of business, actual years projected, i.e., 30 percent retail, 20 percent wholesale trade, 30 percent grocery, 15 percent government, 5 percent internal sales).

2.1.3. Product development Measures:

New product success

New products index, Feature function index, Time-to-market index, R&D success index, R&D expense($), R&D expense/total expenses(%), IT Development expense/IT total expense(%), Hours, R&D(%), R&D resources/total resources(%)

Numbers of new products per year

Percent % of present revenue in last 5 years from new products Product extensions

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Industry standards for KPI’s Public Version 2.2.1. Customer

Measures: Case fill service Service levels

On-time delivery, Service performance, Order fill rate, Customer care performance, Material quality, Agreement effectiveness, Service accuracy, Transformation ratio, Client satisfaction, Delivery time, Service level, Trust, Commitment to firm, Level of strategic partnership, Joint projects/processes

2.2.2. Supplier Measures:

Inventory holdings, Supplier on-time delivery, Supplier service performance, Supplier Order fill rate, Supplier care performance, Supplier material quality, Supplier agreement effectiveness, Supplier service accuracy, Supplier transformation ratio

2.2.3. Operational Measures:

Cash to Cash cycle time, Conversion cost, Asset utilization, Sigma value, Cost of

construction (Change in the current normalized construction cost of a project at Commit to Construct (point B) compared with one year earlier, expressed as a percentage of the one year earlier cost)

Defects Productivity

Company value added per employee expressed in dollars.

2.3. Support Services

2.3.1. Human Resources Measures:

Recruitment effectiveness index, HR Advisory index, Benefits administration index, HR total cost index, Skills inventory index, Employee training index, Staff Turnover,

Recruitment Quality, Training Days Execution, Fill Vacancy Time

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2.3.2. Information Technology Measures:

e-penetration index, Systems performance, New projects index, IT support performance, Cost index, Partnership ratio, Service-level effectiveness

Data loss accidents, Quality of software, IT budget execution, Quality of communications bandwidth

2.3.3. Finance & Regulatory Measures: Compliance index Accuracy index Advisory index Cost-of-service index 2.4. Finance 2.4.1. Stock exchange Measures: Dividends Market Value Share Price Earnings per share

2.4.2. Financial health Measures:

Solvency, Current ratio, Sustainability, Debt to equity, Margin, Borrowing

2.4.3. Financial control Measures:

Revenue, Return on investment, Economic value added, EBITDA Profitability, Accounts Receivable, Days Sale Outstanding, Outstanding debts over 2 month

Total assets($), Total assets/employee($), Revenues/total assets(%), Revenues from new products or business operations($), Revenues/employee($), Profits/total assets(%), Profits from new products or business operations($), Profits/employees($)

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3. THE

C

OMPANY KPI Definitions

The next pages show the KPI’s at THE COMPANY within each of the following areas, as discussed in chapter 6:

4.1. Marketing & Sales: 48 KPI’s 4.2. Out of Home: 41 KPI’s 4.3. Manufactured goods: 19 KPI’s

4.4. Supply Chain Shared Services: 36 KPI’s 4.5. Human Resources: 32 KPI’s

4.6. Finance: 27 KPI’s

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3.1. Marketing & Sales

Title Sfinx Perspective Sfinx Unit of measure

Consumer complaints CONS=Consumer #=number

DIF Deliveries in Full (Cases, Lines, Header) CUST=Customer %=percentage

Trade Spend Productivity Index (retail only) CUST=Customer #=number

Signed annual contracts with retailers (% of total value) (retail

only) CUST=Customer %=percentage

Off margin sales % (retail only) CUST=Customer %=percentage

Order Fill rate on time in full CUST=Customer %=percentage

Case Fill Rate in Full CUST=Customer %=percentage

Trade Spend percent of GOS CUST=Customer %=percentage

Inventory (ITO) - Inventory Turnover FIN=Finance #=number

Slow Moving & Obsoletes (SLOBS) - Value FIN=Finance amount

Slow Moving (SLOBS) - % Stock FIN=Finance %=percentage

% of active SKU's that make up 95% of NOS FIN=Finance #=number

Days Sales Outstanding (DSO) FIN=Finance #=number

Overdues FIN=Finance amount

FTE (incl employment agencies) FIN=Finance #=number

Gross profit as % of NOS FIN=Finance %=percentage

Obsolete part of stock FIN=Finance %=percentage

# of out of stock days FIN=Finance #=number

WD costs as % of NOS FIN=Finance %=percentage

WD costs per pallet FIN=Finance amount

Price gap to base price (retail only) GS=Global Sales %=percentage

Price gap to average price (retail only) GS=Global Sales %=percentage

Trade promotion intensity (retail only) GS=Global Sales %=percentage

Process usage GS=Global Sales %=percentage

THE COMPANY Value Share of Category GS=Global Sales #=number

Trade Rate GS=Global Sales %=percentage

Promotion Effectiveness GS=Global Sales %=percentage

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Promo ROI (LE and AOP input only) GS=Global Sales #=number

NPD sales (% of total NOS) INNOVATE=Innovation %=percentage

NPD sales strategic + support & growth (% of total NOS) INNOVATE=Innovation %=percentage Projected value of funnel pipeline (only at divisional level) INNOVATE=Innovation amount Aggregate portfolio NPV (only at divisional level) INNOVATE=Innovation amount Average time to market from concept to launch (only at

divisional level) INNOVATE=Innovation #=number

Percent project phasing feasibility gate (only at divisional level) INNOVATE=Innovation #=number

Average ACV rate (retail only) INNOVATE=Innovation #=number

Monthly Forecast - Accuracy INT=Internal %=percentage

Absenteeism INT=Internal %=percentage

Forecast bias Net Outside Sales INT=Internal #=number

Forecast Bias Gross Profit % INT=Internal #=number

Forecast Bias Operating Profit INT=Internal #=number

SKU activity level INT=Internal %=percentage

Perishable Inventory Loss INT=Internal %=percentage

Broken Layers INT=Internal %=percentage

Forecast Bias Gross Profit INT=Internal #=number

Cost reduction / Margin improvement LEAN=Lean

Employees trained on CI LEAN=Lean #=number

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3.2. Out of Home

Throughput Coffee Concentrates - 1.25 ltrs OCS &

Vending CONS=Consumer Ltr/week

Throughput Coffee Concentrates - 2 ltrs CONS=Consumer Ltr/week

Throughput Espresso CONS=Consumer Kg/week

Throughput Fresh Brew CONS=Consumer Kg/week

Average weekly volume sold CONS=Consumer Kg/week

Net placements CUST=Customer #=number

Customer satisfaction score CUST=Customer #=number

Complaint - received CUST=Customer #=number

Complaint - solved CUST=Customer #=number

Complaint - outstanding CUST=Customer #=number

Slow Moving (SLOBS) - % Stock FIN=Finance %=percentage

% of active SKU's that make up 95% of NOS FIN=Finance #=number

Cost per service visit (in the period) FIN=Finance amount

Trade spending rate FIN=Finance %=percentage

Obsolete part of stock FIN=Finance %=percentage

# of out of stock days FIN=Finance #=number

WD costs as % of NOS FIN=Finance %=percentage

WD costs per pallet FIN=Finance amount

NPD sales (% of total NOS) INNOVATE=Innovation %=percentage

NPD sales strategic + support & growth (% of total

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Customer retention rate INT=Internal %=percentage

Call Response Rate INT=Internal %=percentage

S.P.O. - Machines 3months/mat INT=Internal #=number

S.P.O. - Spare parts 3months/mat INT=Internal #=number

Absenteeism INT=Internal %=percentage

Forecast Bias Volume CC INT=Internal %=percentage

Forecast Bias Volume RG INT=Internal %=percentage

Forecast Bias Operating Profit INT=Internal #=number

Prospect Hit Rate INT=Internal %=percentage

Prospect Coverage Rate INT=Internal %=percentage

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3.3. Manufactured Goods

Sfinx KPI Title Sfinx Perspective Sfinx Unit of measure

OPCO complient level on delivery stocks

(ppm) COMPLEX=Complexity %=percentage Frequency rate (nºacc/FTE) COMPLEX=Complexity #=number

Service level suppliers COMPLEX=Complexity %=percentage

SKU's produced - new / regular COMPLEX=Complexity #=number

ITO - 3 mnths /MAT FIN=Finance #=number

SLOB (absolute amount SLOB) FIN=Finance amount

SLOB % (% SLOB amounts of total

inventory) FIN=Finance %=percentage

Added Value Cost per unit FIN=Finance amount

Blocked stock FIN=Finance amount

Quantity produced (standard units * 000) GEN=General #=number Quantity produced (TONS/'000 ltrs) (C&T

only) GEN=General #=number

CI trainers LEAN=Lean #=number

OEE MFG=Manufacturing %=percentage

Labour productivity MFG=Manufacturing CU/FTE

Severity rate (nºlost days/FTE) MFG=Manufacturing #=number

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3.4. Supply Chain Shared Services

Complexity - SKU activity Level COMPLEX=Complexity #=number

Complexity - Number of new SKU's COMPLEX=Complexity #=number

Complexity - Number of promotional SKU's COMPLEX=Complexity #=number

Broken Layer - % Boxes COMPLEX=Complexity %=percentage

Customer Service Level - Quantity (cases, line, header) CUST=Customer %=percentage Customer Service Level - Quantity & On Time (cases, line,

header) CUST=Customer %=percentage

Customer Order - Number of Orders CUST=Customer #=number

Customer Order - % of Ship to CUST=Customer %=percentage

Customer Order - Number of Cases CUST=Customer #=number

Customer Order - % EDI/CRP Orders CUST=Customer %=percentage

Out of stock - Daily SKUs CUST=Customer #=number

Inventory (Std Cost) - Value FIN=Finance #=number

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Country Supply Chain Costs FIN=Finance amount

Monthly Forecast - Accuracy INT=Internal %=percentage

Monthly Forecast - Bias INT=Internal %=percentage

SKU activity level INT=Internal %=percentage

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3.5. Human Resources

Absenteeism ABS=Absenteeism %=percentage

Gender Diversity. (short list) DIV=Diversity %=percentage

Female representation in Management Hiring - Internal

Promotion DIV=Diversity %=percentage

Female Representation in Management DIV=Diversity %=percentage

% of female employees Grade 33 and above DIV=Diversity %=percentage

% of female employees Grade 31-32 and above DIV=Diversity %=percentage % of female employees Grade 28-30 and above DIV=Diversity %=percentage

% of females hired DIV=Diversity %=percentage

Cost to hire FIN=Finance amount

HR Costs per FTE FIN=Finance amount

HR expenditure year to date (local currency ‘000) FIN=Finance amount

HR costs per Headcount FIN=Finance amount

Internal Hire rate ILM=Int. Labour Market %=percentage

Regretted talent loss rate * ILM=Int. Labour Market %=percentage

Global Business Practices # ILM=Int. Labour Market %=percentage

HR effectiveness - FTEs ILM=Int. Labour Market #=number

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External Hire Rate diversity ILM=Int. Labour Market %=percentage

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3.6. Finance

Title Sfinx Perspective

Sfinx Unit of measure FSS Reporting - 10. Accounts Receivable Dashboard

Cost per AP invoice (all types of AP invoices) AP=Accounts Payable amount

Cost per external AP invoice (intercompany invoices not included) AP=Accounts Payable amount External Invoices per FTE (intercompany invoices not included) AP=Accounts Payable #=number

External Invoice Automation AP=Accounts Payable %=percentage

Cost per invoice line cleared AR=Accounts Receivable amount

Apply Cash lead time AR=Accounts Receivable #=number

DDO Days Deductions Outstanding FIN=Finance #=number

Country FSSC costs FIN=Finance amount

Credit - Overdue % per Late-Day Quartile 10, 30, 60, 90 days FIN=Finance %=percentage

Country FSSC FTE's at period end FIN=Finance #=number

Country FSSC FTE's at average FIN=Finance #=number

Days Overdue Outstanding (DOO) FIN=Finance #=number

Manual Journal Line Volume by type GA=General Accounting #=number

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4. Web survey questions and responses

This appendix shows the questions and responses of the web survey, which was on the intranet at THE COMPANY for two weeks. At May 25 2007 the survey was closed and 72 users of SAP BW responded to the survey.

The web survey and questions are set up by the author of this thesis.

Question 4 shows the minority of Human Resource employees in this research. These categories should KPI focus on, according to the respondents:

Supply Chain 85 %

Sales/Marketing 84 %

Finance 83 %

Human Resources 53 %

Other/Shared Services 52 %

Conclusion is that employees think Human Resource and other Shared Service KPI’s are less important to measure than the Supply chain, Finance and Marketing & Sales KPI’s.

10. Comments about the Sense of KPI’s

1. "should be more the basis of the discussions...”

2. “facts and figures, now too much based on incidents... a lot of hot air."

3. "Only helps when target settings are clear and alignment cross functions and depts. One way of measurement across company”

4. "This empowerment can only be the case if the KPI results are part of someone’s PMP and have any effect on how people their performance is related to it”

5. “we should start using KPI's more, reinforcement is needed, there is a lot of kpi reporting but not so much steering on it yet (e.g. (global) sales KPI’s....)” 6. “Too many KPI’s”

7. “It all depends on the quality of the KPI's; i.e. to which extent are they relevant; do they really measure a performance or are they only measuring deviations from a budget; to which extent are stimulating to improve performance or are they an invitation for sub-optimalization?”

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9. “KPI’s can be critical in making decisions to run a business, but they must be the correct KPI’s and given to the correct decision maker"

10. “KPI's only add value if they are measured at the right level (not too much detail at forehand)”

11. “Within a company the KPI's should be aligned, otherwise people can not work together on making things better.”

12. "In my opinion current KPI's are good, but people don't take care about them. Usually people say ""One KPI bad result is not important"", but may be they ignore this is not unique one."

13. “Everybody within an area e.g. supply chain should make up a defined KPI in the same way and with same input/definitions/info. Also the understanding should be the same. Otherwise you can not compare and make overall conclusions”

14. "It is a measuring tool, and nothing more.”

15. “One problem with KPI's is, that you focus too much on meeting the KPI's and forget other (more?) important business"

16. "KPI's makes only sense, if they are clearly and global consistently defined.”

17. “All THE COMPANY OpCo's must do the same input/contents into the SFINX system to get equal figures, so to reach a good base to compare. Also must be the focus on some important KPI's. At the moment we will be overwhelmed with inquires." 18. “We need KPI measures which are agreed, understood for what they represent and

how calculated, easily obtainable, readily available, updated, maintained and visible to THE COMPANY functions.”

19. “Je moet wel oppassen dat men verder blijft kijken dan de waarde van een KPI. Wat drijft een KPI? “

20. “global lines between different functional areas “

21. “very important to track history and provide guidance on action plans for the future” 22. “Very relevant”

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27. "De basis moet goed en juist gevuld en onderhouden worden. M.i. is er weinig focus op hoe je een goede data structuur kwalitatief goed gevuld houdt (bv de

klantenopbouw en welke kwalitatieve informatie je daarin bijhoudt en wie

verantwoordelijk is voor de up-to-date informatie). Daarnaast zijn er diverse afdelingen met ieder hun eigen belangen, waardoor de vraag is wat de KPI cijfers daadwerkelijk weergeven (hoe berekend, wat is de bron, zijn de cijfers vergelijkbaar)"

28. “Unfortunately the recent implementation of KPI's has not been successful because of lack of instruction / definitions and the use of the restrictions of the reporting systems. This is preventing people to commit to KPI’s.”

29. “You have to decide carefully what KPI's you want. The KPI must make sense.”

Management summary:

Employees think KPI’s only make sense if definitions are clear. Everyone has to understand what they present and the sense of KPI’s depends on the quality.

THE COMPANY employees think KPI’s in the next business categories are too much emphasized: Supply Chain 26 % Finance 24 % Sales/Marketing 22 % Human Resources 7 % Other/Shared Service 5%

These results show the unbalanced set of KPI’s at this moment. KPI’s reflect to the next levels within THE COMPANY:

Operational level 46 % Tactical level 23 % Strategic level 10 %

These results show the large amount of operational metrics, which are mainly diagnostic metrics and no strategic KPI’s, as discussed in § 4.3.

16. Comments about the USE of KPI’s

1. “How are you sure you are measuring the right things... with regard to consumers... also depending on good view where the company wants to head to.”

2. “Only when adding value”

3. “I can not answer the above, I only know the THE COMPANYCE ones. So please interpret the above limited to THE COMPANYCE/ IT KPI’s”

4. "KPI's are hard figures and measurable. To simply delight you every day, is not always hard figures and sometimes is the atmosphere not measurable. "

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Industry standards for KPI’s Public Version 6. “Generally the person requesting the KPI is too remote from the business to use it,

therefore it is produced and disappears forever”

7. “Taking decisions using one bad KPI result doesn’t take any sense. Ignoring scenario when all KPI’s are going bad don’t take any sense yet.”

8. “Everybody within an area e.g. supply chain should make up a defined KPI in the same way and with same input/definitions/info. Otherwise you can not compare and make overall conclusions”

9. “Should be well set, not just covering part of your job” 10. "see answer 10.”

11. “Also is it very difficult to have the knowledge about all figures of THE COMPANY. In the meantime we have vast quantity of KPI's. If you read the 50 pages instructions (that will be changed from time to time) you have a lot of time-consuming!"

12. "To simply delight you every day is niet in één KPI te meten. “ 13. “Aantal klachten e.d. is een mogelijkheid."

14. “in some areas Ok, others not !”

15. “Through Consumer / customer satisfaction KPI’s”

16. “KPI’s should give clear information above certain topics to people who are dealing with these topics”

17. “Voor de missie moet je duidelijk vaststellen wat de KPI’s inhouden. Het zal naast andere instrumenten gebruikt moeten worden en niet alleen het cijfer maar m.n. het verhaal erachter zal dit moeten aanvullen.”

18. "Questions are too general. Does not really give the details which I think you should become from such a questionnaire."

19. “Not all KPI's reflect the extent of successfully achieving mission.”

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22. Comments about the ACCURACY of KPI’s

1. “The KPI’s are accurate but the explanation of the cause of the results can differ. “ 2. For uniform KPI's you need a uniform, standardize system solutions. There are too

many local differences to compare now.”

3. "I report KPI's every month . When I started this I discovered a mistake made by the former person who did the KPI’s. I corrected this mistake which led to a market share drop from 12% to 9% (simply due to different calculation method). In the KPI’s is a graph, hence there was a market share line where you could see that the market share suddenly dropped. In order to 'tes' I decided not to explain what I changed and why... and guess what: NO-ONE EVER ASKED. They simply accepted it (or never noticed, who knows). Therefore I view KPI’s simply as an method to keep the other OPCOs busy."

4. “Question far to general”

5. “KPI's definition are good, but all it depends on reliable calculation.”

6. “Depends on the point of view it is read: same KPI means different things for Finance and for Supply for example. And also the source it comes from.”

7. “for entire THE COMPANY”

8. “Everybody within an area e.g. supply chain should make up a defined kpi in the same way and with same input/definitions/info. Otherwise you can not compare and make overall conclusions”

9. “Good objective measuring is key” 10. “see answer 10. and 16.”

11. "Er wordt wel hard gewerkt om de betrouwbaarheid van KPI’s te vergroten. (binnen FSS althans) Ik denk dat dit een proces is waar je doorheen moet."

12. “KPI's have to have a very SIMPLE, & CLEAR. Definitions between different depths are not clear and are different !!!!!”

13. “Different interpretation could lead to different calculation methods which could lead to off standard comparisons”

14. “KPI's must always be measurable in order to avoid subjectivity”

15. “Zeer afhankelijk van de KPI. Momenteel heb ik KPI's waar ik nog geen 10 sec. mee bezig ben, maar ik heb ze ook van 10 minuten.”

16. “Depends on the area ; 12 per area is an estimate”

17. “make someone dedicated to provide KPI’s and see that this person has the necessary time to do his job in a proper way”

18. “KPI's are reliable for trend watching, not as absolute figures !”

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20. “accuracy is not the issue. It is a lack of instructions / definitions the makes multi interpretation possible. This is currently being worked on, uniform definitions and pre scribed underlying reports in BW obtaining the input.”

21. “Main issues with KPI's are: 1) master data

2) no "template" processes”

26. Comments about the TIMELINESS of KPI’s

1. “More used as a tool to analyze and work towards improvements.”

2. “Focus depends on the type of KPI. In the end the trends provide insight on the focus” 3. “Too general, can be prospective as well as retrospective”

4. “to question 23: depends on the KPI and the level of the KPI's. Strategic less often than operational”

5. "KPI’s are required for strategic (three months), tactical (three months), operational (monthly down to weekly)"

6. “Everybody within an area e.g. supply chain should make up a defined KPI in the same way and with same input/definitions/info. Otherwise you can not compare and make overall conclusions”

7. “To question 23: more answers possible, but I could only fill in 1”

8. "The monthly reporting will secure the topicality of the figures. Some figures are short termed i.e. HR figures."

9. “Er wordt ook een AOP voor KPI’s gemaakt. Dus korte termijn focus valt wel mee.” 10. “depends on the volume and availability of key data inputs”

11. “As far as I'm concerned KPI's are anchored on the THE COMPANY's mission and vision so it can never be outdated”

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Industry standards for KPI’s Public Version 17. "KPI's can be reviewed differently. Only one answer could be given!”

18. “How many KPI's can you handle is not relevant. Relevant is what do you need for the business!"

29. Comments about the AVAILABILITY/ATTAINABILITY of KPI’s 1. “As mentioned, these simply disappear once produced”

2. “Everybody within an area e.g. supply chain should make up a defined kpi in the same way and with same input/definitions/info. Otherwise you can not compare and make overall conclusions”

3. “Did not understand the last 2 questions” 4. “binnen …. publiceren wij alle KPI's op InSite”

5. “Due to authorization procedures it is sometimes hard to get the necessary information.”

6. "Mn tav sales informatie probleem om eenvoudig informatie uit verschillende systemen te koppelen en op te leveren. Performance SAP BW over het algemeen erg laag. (zandlopers...)"

7. “my performance' as a controller is not influencing the KPI’s. We measure the

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30. Overall comments about the KPI’s at THE COMPANY

1. “we should be selective on which KPI’s to be used (not too many) and start really using them (for corrective actions short term, but also for longer term improvements and part of company strategy (in AOP)”

2. “No problem with the KPI's, but in general BW as a reporting tool is too slow to be comfortable.”

3. “Essentially these are not measured correctly, used correctly, or used by the right person”

4. “Everybody within an area eg supply chain should make up a defined kpi in the same way and with same input/definitions/info. Otherwise you can not compare and make overall conclusions”

5. “There is no general comment, as all KPI's differ. E.g. I make them with my suppliers, others may make them internally, or with retail etc”

6. “in opstartfase”

7. “Everybody should use the same definitions of KPI's, based on the same

reports/calculations. Currently it regularly happens that different people talks about the same KPI, however use different figures.”

8. “The number of KPI's should be kept to a minimum, also be careful when measuring a set of KPI's where they may be in conflict with each other”

9. “Definitions not 100% clear between divisions”

10. “Too many with unclear definitions and an manual system of Input.”

11. “23. TIMELINESS of KPI's - How often do you think KPI's on average should be reviewed? * This question is not correct. the review of KPI depend on the KPI” 12. “Very good and well directed”

13. "THE COMPANY is improving information and KPI structure continuous.”

14. “Important is to focus on essential KPI's per area and differentiate the KPI's to keep quality level or follow up trends and additional ""temporary"" KPI's to measure short term effects."

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5. Suggested KPI’s for THE

COMPANY

The next set of 25 KPI’s are recommended to use at THE COMPANY and should fully pass the Deming cycle.

Demand Management

The next seven KPI’s are needed to cover the demand management aspects of THE COMPANY:

Consumer satisfaction Consumer sales growth New product success rate Market share index Forecast demand error Order fill rate on time in full

Cost reduction/Margin improvement

The most important issue in demand management is consumer satisfaction. This indicator should be on the number one position of each company which is involved with marketing & sales and can’t be absent in the list of KPI’s. Consumers have to keep buying their food and beverage from THE COMPANY, but if they are not satisfied with products and services, at least they look what products competitors offer. At worst they run away and never buy anything from THE COMPANY. Hence, consumer satisfaction should be the key to continued future success.

Growth of sales is a good indicator of the health of the organization. An increasing growth of sales increases turnover while stabilization in growth of sales could be the right moment for the introduction of a new product.

Introducing new products is a way to tie customers to an organization. An indicator which measures for example the percentage of new products introduced in the last 12 months that are still ranged in more than 50 % of the agreed target selling points will cause to a responsible policy to the high failure rates of new products.

A Market share index indicator will place the company in perspective with competitors. This KPI should indicate the external threats and opportunities for THE COMPANY. The difference between actual and forecast demand is important to know. Otherwise the company keeps producing unnecessary stock or is out of stock. A lot of money is involved with this issue, as mentioned in § 5.3.1. The Forecast demand error is the KPI for this issue.

Do customers always get exactly what they want on time? The Order fill rate on time in full indicates this. The KPI shows the number of complete settled orders on time related to the total number of orders.

In connection with Continuous Improvement an indicator is needed to measure progress. The Cost reduction/margin improvement KPI shows these improvements.

Supply Management

The next seven KPI’s are needed to cover the supply management aspects of THE COMPANY:

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Industry standards for KPI’s Public Version Finished product defect rate

Cash to Cash cycle time Cost reduction

The Supplier service level KPI expresses the relationship between THE COMPANY and suppliers. This indicator is related to the time and quantity of the supplied goods. When service levels deteriorate, they provide an early indication of underlying problems that need to be solved.

The ratio which indicates the transformation of orders into supplied goods is called the Transformation ratio. This ratio expresses the effectiveness of processes within the supply chain.

A Forecast accuracy KPI indicates whether the stock volume is at acceptable level or not. The quantity produced in proportion to the use of assets can be expressed in the Asset utilization KPI. This indicator shows the efficiency of the operations.

Operational level measures can’t do without a Finished product defect rate. The number of defect produced items related to the total amount of produced items is brought together in this KPI.

Effectiveness at operational level can be measured by the cycle time of the processes. The KPI Cash to Cash cycle time is the indicator for this.

In connection with Continuous Improvement also within supply management an indicator is needed to measure progress. The Cost reduction KPI shows these improvements.

Support Services

The next seven KPI’s are needed to cover the support services aspects of THE COMPANY:

Absenteeism Labour turnover

Employee diversity rate Employee satisfaction index IT-Service level effectiveness Cost Reduction

The Absenteeism KPI measures the percentage of time in which employees are not productive to THE COMPANY, so not in the office, not working at home and not traveling. How many FTE’s are leaving THE COMPANY related to the total number of FTE’s and the creation of new FTE’s is expressed in the Labour turnover KPI.

Each modern company wants to know how many female and foreign employees are working within the organization. An Employee diversity rate KPI is the indicator which gives THE COMPANY insight in this issue.

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Industry standards for KPI’s Public Version Gross profit as % of numbers of sold units

Conversion cost Added value per unit HR cost per FTE Sales cost per unit IT cost

The financial KPI’s are relevant for the annual report. Shareholders want to know the Earnings per share, Debt to equity and Gross profit as % of numbers of sold units. How many does it cost to convert raw materials into finished products by using labour, support services, etc? This is expressed by the Conversion cost KPI. The Added value shows the value which has been added from raw materials to a finished product.