Performance KPIs that live and breathe

Stanton McGroarty says you’ve measured performance; now supercharge the data.

By J. Stanton McGroarty, CMRP, senior technical editor

I just received a Christmas greeting from a friend and colleague in South Africa. It reminded me that he had once given me a file that listed and defined several hundred different KPIs. I was pleased by the gift, but I still haven’t reviewed it. I’ll probably get to it when I retire. Surely there are some great measurements in there, but finding them will be a serious chore. It’s a lot like the stream of data coming from a condition monitoring program. It’s designed to inform predictive maintenance (PdM) users, but first the data must be sifted to find the useful facts. Then the useful part must be translated into actionable information, packaged, and delivered to users. It also helps if the users are trained to interpret it and rewarded for doing so. More information on making data useful is available at

Significance: Performance metrics are important, but installing them inside the skulls of the people who should use them is often a larger task than developing the data. Fred, a factory friend of mine, told me about one executive who handled this challenge very effectively at a machine shop in Rhode Island. At the end of every year, management and workers from his plant would share a great steak dinner to discuss the year’s successes and distribute bonuses. One year, largely unbeknownst to the workforce, the company had barely escaped closing because of a downturn in business. At that year-end celebration, the dinner menu was beans and franks. While he had the employees’ and their families’ undivided attention, the executive briefly explained the situation and let his troops know there would be meetings with more details starting the following Monday. Of course the employees were all ears on Monday, and their families were equally ready to discuss business issues at dinner Monday night.

The financial results discussed in the plant and at home were very important, but equally important was the preparation of the audience. Their reaction had the power to improve operations and make next year’s results different. The job of focusing the audience was handled effectively at the Saturday night dinner. The picture was clear to everyone, and a hunger for more useful information was created.

One hopes that most information is better news than what was shared by Fred’s boss. But good news or bad, the job of packaging information for use and preparing the audience doesn’t change much. Clear information and an interested audience are the essential ingredients.

J. Stanton McGroarty, CMfgE, CMRP, is senior technical editor of Plant Services. He was formerly consulting manager for Strategic Asset Management International (SAMI), where he focused on project management and training for manufacturing, maintenance and reliability engineering. He has more than 30 years of manufacturing and maintenance experience in the automotive, defense, consumer products and process manufacturing industries. He holds a bachelor of science degree in mechanical engineering from the Detroit Institute of Technology and a master’s degree in management from Central Michigan University. He can be reached at or check out his .

Getting started: Every worker needs the right information to do her job. Before designing an information distribution system, management needs to determine what that information is for each worker. Most jobs require some information in real time. Other data can be provided hourly, daily, weekly, or monthly. Some information, as in the case of the dinner discussion, can be distributed annually.

Fitting information to the type of work being done and the culture in an organization, can be a formidable job. A good way to start the determination of what information is needed at each node in the organization is to ask the workers who occupy those nodes what information they need. It is also helpful to ask each group in a work or information flow what information they would like the people one node upstream and downstream from them to use.

Data needs must be determined and sources identified by a cross-functional design team. It is important to be sure that the team cataloging information requirements considers performance data in addition to operating information. People need to know how well they are doing. Until quite recently, it was not uncommon to hear plant-manager-level people say they didn’t know what a month’s performance would be until they got the month-end financials. This is no longer an acceptable situation. Everyone who is responsible for performance needs up-to-date performance measures, including forward-looking indicators that predict future results.

Once the information has been identified for each node, an appropriate distribution strategy must be developed. The range of tools available today is amazing. Area performance dashboards are well understood today, and they can be presented with tools ranging from chalkboards to big-screen monitors. Handheld tablets and other personal data tools can also be valuable additions to data distribution efforts. Where possible, performance information should be distributed by the same outputs that provide process data. Data distribution to handheld devices is discussed further at

The design team will find that nearly every piece of information needed to help the organization take its next step is already available within the organization. Once the distribution strategy is designed, an implementation team can be convened and the system designed to give people in each area the information they need. Then, when they have been taught to use the information, the stage will be set for the company’s next performance step.

Read Stanton McGroarty's monthly column, Management Measures.