By identifying what differentiates it from its competitors, as well as by acknowledging its main capabilities, an organization can set the objectives that have to be attained in order to reach its vision. A performance-focused organization will formulate its objectives and map its strategy, in order to identify cause and effect links that turn assets into desired outcomes.
According to a poll conducted by The KPI Institute on LinkedIn, Selecting Key Performance Indicators (KPIs) has been highlighted as the most difficult aspect in deploying KPIs, with more than 50% of respondents choosing this option when asked: “What is the most challenging aspect in working with KPIs?”.
The Council of Logistics Management defines Logistics as “The process of planning implementing, and controlling the efficient, cost effective flow of raw materials, in-process inventory, finished goods and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.”
Reporting is an important stage in the performance management process, although managers can sometimes fall into the trap of considering it as the end of the performance cycle. However, just reporting performance data will not ensure the improvement of results. Improvement is only possible when decisions are made based on the insights provided by data.
Measurement is an activity which emerged thousands of years ago, driven by the human curiosity to know more about the environment and to understand how the world works. In time, our world has evolved to become more and more complex, pressuring us to constantly refine our measurement tools and techniques.
Today, we see organizations as ecosystems and we act accordingly to our desire to know more and to better understand this environment. Nowadays, challenges are not about accessing information, as most companies are managing large volumes of data. The challenge is to decide what data is the most important for decision making? In this context, key performance indicators (KPIs) are very useful tools to provide: