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Key Performance Indicators are the bench mark achievements across the business you work in, without them you would not be able to set S.M.A.R.T targets nor measure success. It would be like getting on a plane knowing where you have to go to but no route map or plan on how to get there.
Key Performance Indicators, is a measurement of your organisation’s achievements. KPI's can be used on various levels of you organisation’s activities from individual roles to the overall of success of a company. Most organisation if not all will use KPI's in some shape or form.
In short if your company has an objective/target then your KPI tells you how close you are to reaching those goals...
So without the use of a any kind of KPI you'll effectivelly not know how successful you or your company is, and what needs to be done to progress.
Thums-up to Answer by Mr. Paul
KPI are indicates the position of a company, individual, supplier ( Success, Performance, Improvements etc )
A Key performance indicator (KPI) is a type of performance measurement. An organization may use KPIs to evaluate its success, or to evaluate the success of a particular activity in which it is engaged. Sometimes success is defined in terms of making progress toward strategic goals, but often success is simply the repeated, periodic achievement of some level of operational goal (e.g. zero defects,10/10 customer satisfaction, etc.). Accordingly, choosing the right KPIs relies upon a good understanding of what is important to the organization. 'What is important' often depends on the department measuring the performance - e.g. the KPIs useful to finance will be quite different from the KPIs assigned to sales. Since there is a need to understand well what is important (to an organization), various techniques to assess the present state of the business, and its key activities, are associated with the selection of performance indicators. These assessments often lead to the identification of potential improvements, so performance indicators are routinely associated with 'performance improvement' initiatives. A very common way to choose KPIs is to apply a management framework such as the balanced scorecard.
Key Performance Indicators are the bench marks set by Business enterpreneur in work. To achieve them we make S.M.A.R.T targets to measure success.
KPI is a measurable value that demonstrates how you progress in achieving your targets and objectives.
What is a KPI? And where do you start to get people to use performancemanagement?
As the name indicates, KPIs concern “key” areas of the business.
You only want a few of them, but they have to be linked directly to the main goals of your enterprise.
When you know :
where you want your business to go,
what you want it to achieve,
and which areas of the business will be crucial for that,
then those few KPIs should tell you if those crucial areas are performing sufficiently well.
What examples of relevant KPIs can you give?
Let’s start with manufacturing. In this environment,
an effective key performance indicator might be “adherence to plan”. This is the critical measure of how well the factory did in making the products it was asked to make, on the day it was asked to make them.
We might also use a KPI to track adherence to cost standards within manufacturing;
for example, to see how effective a yield we get from a fixed number of man-hours or a fixed amount of material.
Customer satisfaction and costs are two vital measures for supply chains and logistics as well.
To measure how well we are doing on customer satisfaction, we can use a KPI to measure how well the supply chain does in delivering in full and on time to our customers who order products from us.
To check up on our performance in managing costs,
a key performance indicator can be the amount of inventory we have in stock.
This is often expressed in the number of days of inventory, or “finished goods turns”, the number of times your inventory is turned over in a year.
