In one of my favourite songs (I have been known to belt it out with beer on occasion) the 3rd verse refers to ‘the screw was peeping and the lag was sleeping as he lay weeping for his girl Sal’. The word “Lag” is Dublin slang to mean a prisoner doing (usually) a five-year stretch (or longer) in the early 1900’s with the ‘screw’ meaning the prison guard. However, the word ‘Lag’ is also the key to an effective and well managed Key Process Indicator (KPI)…………..you must be still slugging down that beer I hear you whisper under your breath!!!
Well in the case of KPIs the key is indeed ‘Lag’ but in this scenario meaning ‘the time between when the KPI is calculated and when it is reacted to’. The best case scenario is to have a real time KPI (i.e. no lag) which is reflective of the process performance at that exact moment in time (used for Moulding Processes in Manufacturing and Call Volume Management in Service Industry) and is critical in terms of taking immediate action to address deteriorating process performance before the damage is done!
Likewise to effectively manage any operation and its KPIs, these are some basic common sense rules;
- For Direct Management at the coal face, KPIs need to have short lag time (hourly, shift by shift, daily)
- For Middle Management KPIs can have medium lag time (bi weekly, weekly, monthly)
- For Senior Management KPIs can have long lag time (monthly, quarterly, annually)
- In some cases it makes sense that these KPIs are linked
So the moral of the story is there is no point in having a KPI that is permanently asleep!!
Submitted by our Lean Six Sigma tutor, Éamon Ó Béarra
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