6th EyeOn Spare Parts Management Idealab: KPI's that work!
Thursday 9th of April EyeOn hosted the first Spare parts Idea lab of 2015. The topic of discussion was Key performance indicators and their impact on daily business of the wide variety of spare parts operations. The venue was held at Croy castle and had participants of people from a broad spectrum of the High tech industry, all present in EyeOn High Tech network. Among the participants were DAF Trucks, TP Vision, Philips Healthcare, Arjo Huntleigh and Denso who all shared their insight on KPI best practices.
After enjoying lunch and the nice weather in the scenic garden of Croy, the debate started on setting KPI’s. Discussion indicated that this should be done in a way that the goal is challenging yet reachable, which should be agreed upon by all parties involved. Then, there could be room for additional reward when the target is over performed.
Another challenge seen by most participants is getting conformity among all stakeholder about the exact definition of a specific performance indicator, which is regarded as key for initially setting the KPI. Something mentioned as becoming very important for the Spare parts environment is “Cost to serve”; finding out where the costs are in the supply chain and setting the right limits for these costs.
Overall, KPI’s are seen as a valuable tool for all levels of the internal organization and for relations with external suppliers. Keeping an eye on the indicators when making decisions can help to steer business in the right direction. However, success is dependent on superfluous indicators being eliminated and useful indicators being used in a proper way and maintained correctly for relevant changes in the Spare Parts world.