Using KPIs to drive improvements

This article discusses the importance of managing a business process using data and metrics. It also discusses how we have setup a simple dashboard for a vehicle repair business.

For those of us who drive cars, it would be scary to drive on the roads without a dashboard. Dashboards contain all the data we need to make decisions like how fast we should be going, when to add fuel, indicators on how are engine is running etc. But also understand some metrics like fuel consumption, performance etc.  This data is vital for us stay on the road.

In many instances, a business is like driving a vehicle yet few business owners ever think about using dashboards. The process to setup a dashboard comes down to understanding the business process, collecting the data and finding a clean way to visualise the data. In this example, we are going to look at a simple car repair business:

  1. Understanding a Process

To visualise the process a simplified process map can be used the demonstrate what happens when a vehicle is brought into the  garage for repair. Within this process, we can define a number of metrics or KPIs which can be numbered KPI 1-KPI 3 below.

2. Defining the Data

The process speaks for itself as most of us have taken our vehicle in for repair.

In this example, we have defined three key metrics that we believe will improve the business:

KPI1: Time to Repair (hours). In our process map, the time to repair starts when the customer drops his vehicle at the garage and ends when the customer has been informed that vehicle is ready and the job  has been closed ready for invoicing.

KPI2: Time inside Garage Bay (billable hours). This KPI is a good indicator of how the garage bays are being utilised. In this example, the customer drops their vehicle off in the external parking of the garage. The vehicle is brought into the garage once a job card has been opened and is removed from garage bay once the repair is complete.

KPI3: Fixed First Time (%). This indicator measures percentage faults that are fixed first time. In many businesses, repeat work is a big factor and for this example we want to understand how many faults are fixed on the first attempt.

3. Collecting Data

Over a given period of one week, we can now measure the data to see how the different variables are trending over time. A part of the data collected is show in the table below:

4. Visualising the Data over a Period

As a CEO or Manager of the business, it is important to have the data ready to view in a clean and understandable medium. This will not only help you understand how the business is performing on a day-to-day basis but also help you know when to intervene. For this example we have created a simple dashboard for the three KPIs shown in the process above:

Conclusion

From the dashboard above, we firstly see how effective the mechanics are at resolving the faults the first time. For this example, the average was above 95% and therefore meets the objective set by the firm to hold this value above 95%.

Secondly, the garage has 6 bays and is open 5 days a week, therefore total bay hours are 240 hours. Utilisation for that week was 141 hours. Therefore, this indicates that the garage was not fully utilised and could take on more work.

Lastly, plotted is the time the vehicle is in the garage bay over total time the vehicle is at the garage. This variable fluctuates considerably over the one week and could inform us on how effective the team is in opening job cards and planning upcoming work.

This information is useful to steer the organisation and understand where the inefficiencies lie.

Did you find this interesting and would you like to know more on the topic like setup of process KPIs and dashboards for your organisation?

Send us an email at info@deltablade.co.uk