Overview

We often refer to metrics, which is just a term meaning "to measure" (either a process or a result). A Performance Measure, or metric, is simply the measurement of a parameter of interest, such as "Labor Hours Scheduled." The combinations of several metrics yield indicators, which serve to highlight some condition or highlight a question that we need an answer to, such as "Completed Hours Scheduled Hours." Key Performance Indicators (KPIs) combine several metrics and indicators to yield an assessment of critical or key processes.

Any endeavor needs to be able to define not only where it is headed, in terms of stated goals and objectives, but also to determine the progress being made towards those goals. This requires defining the KPI's that need to be monitored in order to gauge progress towards those goals. One of the more interesting points here is that KPIs can be created in a hierarchical and interlinked fashion which allows management to pinpoint the root causes of system failures. In order to determine maintenance planning and scheduling strengths and weaknesses, KPIs should be broken down into those areas for which you need to know the performance levels. Depending on KPI values we classify them as either leading or lagging indicators.

Leading indicators are indicators that measure performance before a problem arises. To illustrate this, think of a key performance indicator as you drive your car down a road. As you drive, you deviate from the driving lane and veer onto the shoulder...