june2021 - 40

MANAGEMENT
» Determine two or three metrics that
will directly lead to the organization's
success when establishing KPIs.
158383370 | Andreistanescu | Dreamstime
In maintenance, lagging indicators can be
metrics such as mean time to repair (MTTR),
overall equipment effectiveness (OEE), and
mean time between failures (MTBF).
Leading indicators: Leading KPIs measure
goal achievement. They are used to predict
changes or trends and they are forward-looking
to help manage the performance of a system
or process. Leading indicators can be influenced,
but they can be challenging to find. If a
person weighs 247 lbs and they want to weigh
220 lbs, a leading indicator might be calories
consumed. The opening for action is to eat
fewer calories.
If a fleet wants to improve reliability, the
lagging indicator is downtime and the leading
indicator might be preventive maintenance (PM)
compliance. If the fleet wants a smooth-running
shop, it may be helpful to consider schedule
compliance as a leading indicator.
KPI fundamentals
Using the company's mission statement as a performance
metric can help fleets work toward achieving their goals.
Every fleet has a mission or purpose. In their
mission statement, UPS notes the goals of " ...
serving the logistics needs of customers, offering
excellence and value ... " A to Z Express
Delivery, a delivery service in Austin, Texas,
wants " ... to provide our customers with the
most professional, fast, dependable, and technologically
advanced delivery service in Austin
and its surrounding areas. "
These statements drive the most critical
activities of the organization. By picking
the mission apart, you can see what would
support and achieve it. With UPS, the focus is
on measuring the achievement of excellence
and value for the customers. A to Z Express
Delivery emphasizes fast and dependable
services. The search for key performance indicators
(KPIs) will use these statements to find
out what to measure for success.
Measuring (KPIs) could be compared to
a waterfall, where the KPIs cascade down
through the layers of the organization. Each
level in the company has its own KPIs to
support the mission determined by top bosses.
The search for impactful KPIs starts at the
highest level in the organization. To start the
search, determine which two or three metrics
will directly lead to the organization's success.
With profit-making fleets like UPS, for example,
the mission is to provide excellence and value.
To provide value, the fleet needs controlled
costs such as cost per parcel delivered; for
heavy freight, this would be cost per ton/mile.
Both metrics may tell much of the story. Other
KPIs that lead to success might include percentage
of on-time deliveries.
Two fundamental
By Joel Levitt
PRESIDENT, SPRINGFIELD RESOURCES
Joel Levitt is the president of Springfield Resources, a
management consulting firm that services a variety of
clients on a wide range of maintenance issues. Levitt
has trained more than 17,000 maintenance leaders from
more than 3,000 organizations in 38 countries. He is also
the creator of Laser-Focused Training, a flexible training
program that provides specific, targeted training on your
schedule, online to one to 250 people in maintenance
management, asset management, and reliability.
types of metrics
There are two types of metrics for managing
any enterprise, known as lagging indicators
and leading indicators.
Lagging indicators: Lagging KPIs measure
goal accomplishment. These metrics are easy
to measure but difficult to change. There is no
opening for action, for example, if a person
weighs 247 lbs and their goal is to weigh 220
lbs. There is nothing to tell them what to do.
40 Fleet Maintenance | June 2021
KPIs can be
strange in that
they might
be a leading
indicator in one
context and a
lagging indicator
in another.
Context
KPIs can be strange in that they might be a
leading indicator in one context and a lagging
indicator in another. For example, weight is a
leading indicator of health. To achieve better
health, a person should move towards their
optimal weight.
While there can be many performance indicators,
there should only be two or three KPIs.
A fleet should look to its mission for measures
that, if achieved, would mean success.
Follow the waterfall to your level of the
organization and see which measures under
your scope of control would help achieve the
institution's goals. The objective is an organization
where everyone is pulling in the
same direction toward the achievement of
the mission.
june2021

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