Shared Metrics for Alignment of Corporate Objectives with Business Units KPIs

Shared KPIs and metrics are highly important to ensure alignment between corporate objectives with Business Units (Departmental) KPIs.

For example, for a corporate objective for Sales, the shared objectives for other business units could be:

• Production: Production of quantities required by sales forecast on time
• Sales: To provide accurate forecast on time
• Warehouse: To ensure adequacy of stocks and at the same time avoid overstocking and expired stocks loss
• Logistics: To adhere to delivery time promise to clients
• Finance: To ensure cash availability to procure raw materials within the supplier lead times
• Quality: No production rejects/defects

If any of the above KPIs breaks this will affect the Corporate Objective as well as other Business Units KPIs. 

The same applies for identifying relevant shared metrics within a Business Unit. For example, what is required to ensure production delivers the quantities required by sales on time?

The answer could be:

• OEE (Overall Equipment Effectiveness) of 85% or higher
• Minimize breakdowns through maintenance 
• Minimize rejects through effective QC
• Skilled workforce via effective training  

Usually to asses shared metrics we conduct a process analysis for business units or processes within a business unit to identify inputs and outputs at the interfaces of processes. 

Another easy way to identify shared metrics is to use the 5 What methodology. Asking What is required to achieve a KPI up to 5 times will provide insight for identifying shared metrics.

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Yiannakis Mouzouris
Strategy and Performance Management
Expert / Business Consultant / Trainer
B.Sc. Mechanical Engineering
M.Sc.Engineering Management, US