TTI/KPI 101

TTIs and KPIs look the same and are sometimes referred to as "bowlers" (because the format loosely resembles a bowling score sheet - and the olds named this stuff back in the 80s).

TTI/KPI Checklist

TTIs and KPIs will ALWAYS have:

• A quantitative, numerical measure

• Plan value - what you expect to achieve each month

• Actual value - what you actually achieved that month

TTIs and KPIs SHOULD have:

• JOP - Jumping off point - where are you starting from?

• Overall Target - what is the end target for the year?  In some cases this is the same as the last month target.  In other organizations this might be a "stretch" goal

• Agreed upon data set! - you do not want to spend each meeting arguing about the validity of the data actuals presented

Things we don't want to see:

• Metric measuring the % complete of an action plan or % complete of ANYTHING - we can see that in the action plan, project etc.

• We want to know what is the MEASURABLE result of the work being done on the action plan.

• Simply completing tasks does not necessarily advance our measurable business objectives.

KPIs are key metrics that are reviewed monthly:

• are generally considered to have reliable processes in place, resulting in reliable outcomes.  

• will have improvement goals, but generally not as significant as targets bearing full focus on the XMatrix

• do not have associated action plans, however they should have 'countermeasures' when a miss occurs as well as Kaizen activity to continually improve processes.

• may be measured weekly and in some cases daily or hourly depending on the process and context.  

TTIs are associated with the XMatrix, Hoshin Kanri.

They are measures of improvement specifically associated with North quadrant priorities - they indicate if the North Priority "qualitative work" is delivering results.

In some cases a TTI could also be a KPI ... for example:

• A business may have multiple manufacturing facilities measuring On Time Delivery.  OTD is a standard part of their monthly KPI review process.  

• However, at Plant A, they have been cascaded a priority to improve the sales process on a particular product - Plant A knows that a key part of losing sales is unreliable OTD.

• In this case, meausuring OTD is both a KPI but also a TTI, as the process is unreliable and tied to a business priority to improve the sales of a particular product.

   Choosing TTIs for an XMatrix

Things to Consider

Number of Targets Tracked

Our rule of thumb is typically "how many kids on a playground could you keep track of?"  Or how many "Sunday football games could you watch at one time?" 

The point being that more metrics tracked does not necessarily mean better results - if all metrics are failing and you have limited resources, it's a fire daily firefight without establishing proper processes.

But everything is failing!!!  Prioritize your metrics by looking at the biggest impact to customer and focusing on those fixes first.

When narrowing in on which targets to track, it's important that you think about any consequences and thus define your targets accordingly.  Example:

A key issue is warranty returns, so you decide to implement a metric to track "non defective shipments".  While this certainly addresses the issue, you may create unintended consequences such as multiple quality checks that impede OTD or Cycle Time.  

This is why its important to establish a process to improve a metric rather than brute forcing a solution.  AND it's important that everyone UNDERSTAND the process.  

The process would take into account mitigating any unintended issues - as well as provide a stable foundation for future improvements.

If you review KPIs monthly, you only have 11 times to review the progress of the metric. 

Ask the right questions, focus on the last 30 days and the next 30 days.

If the metric is failing each month, it's CRUCIAL to implement a countermeasure/root cause analysis

Don't skip a monthly review