KPI Dashboard (Automobilzulieferant)

KPI (Key Performance Indicator)

In its simplest form, a KPI is a kind of performance measurement that you can use to track the performance of your company or department. A good KPI should act as a compass and help you and your team understand whether you are on the right track to your strategic goals. To be effective, a KPI must:

  • Be clearly defined and quantifiable (SMART)
  • Be communicated across the organization or department
  • Be crucial to achieve your goal. (Hence key performance indicators.)
  • Applies to your industry or department.
  • The problem is that there are thousands of KPIs to choose from. If you choose the wrong one, measure something that doesn't match your goals. Then how should you go about choosing the right KPIs for your business?

The best way to do this is to research and understand some of the key KPIs. In this way, you can better understand which are specific to your industry and which are not useful.

You can only manage what you measure.

Key performance indicator - examples and definitions

Profit: This goes without saying, but it is still important because it is one of the most important performance indicators on the market. Don't forget to analyze both gross and net profit margins to better understand how successful your company is in achieving a high return.

Costs: Measure cost efficiency and find the best ways to cut and manage your costs.

Customer satisfaction OTIF / PPM: On the surface, this is very simple: make the customer happy and he will continue to be your customer. However, many companies argue that this is more for shareholder value than for customers themselves. You can use multiple counters to measure CSR, including customer satisfaction scores and the percentage of customers who repeat a purchase.

Employee turnover rate (MFR): To determine your MFR, take the number of employees who have left the company and divide them by the average number of employees. If you have a high MFF, take some time to look at your workplace culture, your employment packages and your work environment.

Employee satisfaction: Satisfied employees will work harder - it's that simple. Measuring employee satisfaction using surveys and other metrics is critical to the health of your department and your company.