Performance Metrics and Benchmarking

Safety performance measures provide data indicating the status of safety activities (Training Resources and Data Exchange (TRADE) 1995,1-36). Comparisons between performance measures and benchmarks or organizational goals allow the safety manager to make decisions and take appropriate action. The key difference between performance measures and safety metrics is that performance measures evaluate the safety process, and safety metrics are the standards of measurement (such as accident rates). A series of safety metrics makes up a safety performance measure. 

KPI system To speed up and anchor CIP in the organization, the companies that set the benchmark in this area establish a clear KPI system linking the operational performance metrics consistently and comprehensively to the overall objectives of the company - and these metrics have to be easily understood and reproduced within standard companywide reporting systems. For instance, at Clariant a number of different KPIs have been defined to track maintenance efficiency, but only a few (e.g., repair and maintenance costs/conversion costs) can really be tracked by the production team on the basis of standardized systems (Fig. 19.6). 

Andon A system used to notify others of equipment or process problems. Often a light pole mounted on operational equipment that has three different colored lights. The lights, which signal machine condition, can be activated manually or via the machine controls. Benchmarking A formal or informal method of comparing and sharing business processes and performance metric results in order to drive business improvement. 

So far, the approach on how to filter relevant performance metrics has been explained. However, a metric aims at quantifying the efiiciency and or the effectiveness of an action but (Neely et al. 1995) the numbers alone do not permit to determine the competitive performance of a firm. Hence, a self-benchmarking is conducted in order to identify improvement opportunities to reach the desired TO-BE state. 

The third recommendation was to treat SCM as a key cross-fimctional process. The organization and metrics established through the first two recommendation made this possible. Like AT T Wireless rvices, MJN used the BOC and benchmarking to assess where it stood with regard to current and desired performance. MJN also calculated the value of closing the gaps, an amount ffiat approached 70 million. 

In the past it was usually deemed to be sufficient simply to measure internal performance. In other words, the focus was on things such as productivity, utilisation, cost per activity and so on. Whilst it is clearly important that such things continue to be measured and controlled it also has to be recognised that such measures only have meaning when they are compared against a relevant metric or benchmark. What should be the metric that is used in assessing logistics and supply chain performance ... 

Since attention to detail is imperative, we continuously strive to improve through benchmarking among our locations on hundreds of metrics, putting to use best practices that continue to raise performance levels. During Fiscal 2004, we continued to see more warehousing and distribution efficiencies in our broadline companies that improved key expense metrics. . . ... 

An objective metric is needed to gauge the level of manufacturing process understandings and control achieved—process capability can be this metric. During development studies, process capability analysis can be performed in terms of probability distribution (type of distribution, mean and variability) without regard to specifications (14) such analysis can provide useful supporting information on variability and may provide additional support for proposed regulatory acceptance criteria. Inherent variability in clinical materials can then be a benchmark and a basis for continuous improvement. 

Normalized metrics can produce ratios that provide better context for comparison across multiple sites, companies, or industry segments. Such metrics can also be useful in one-to-one performance benchmarking. Normalized data provides a rate expression for process safety performance and can be used to compare performance among sites that differ in size and processing technology as well as performance comparisons among companies within an industry or even across industries. There are a number of ways to normalize process safety data, and methods include, but are not limited to ... 

Outcome measures reflect the company s key safety objectives and are used to determine whether the company has reached them. These measures, sometimes referred to as lagging indicators, typically demonstrate the final results of the safety process. They are often commonly recognized or standard measures, such as those quoted in benchmarking studies. They are also the measures that tend to be tracked by CEOs, presidents, and vice presidents. Examples of outcome measures for a safety metrics program include lost workday rates, recordable injury rates, and number of miles driven without an accident. These indicators are referred to as lagging because they measure safety performances that are the result of, or occur after, an activity. 

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