The five common mistakes companies make when setting up maintenance KPIs and how to avoid them

1. mistakes companies
make when setting
maintenance and
reliability KPIs

2. What defines KPIs?
KPIs are a measure of success, allowing individuals
to monitor progress and identify areas of potential
improvement. They relate to a defined objective in a
manner that is relevant to the process under scrutiny.
A KPI facilitates comparison with past performance, and
the performance of other organizations. However, the
KPI should also provide some prognostic and diagnostic
information.

3. Selecting a single
KPI to monitor
Any single KPI will be hard pressed to show the true performance and help to identify
what needs to be improved. That is why an organization needs to formulate a family
of relevant and interrelated KPIs that operate at various levels of hierarchy. This will
provide individual managers with key information to effectively control their specific
contribution to the overall business result.
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4. KPI’s are disconnected
from larger business goals2
The setting of organizational KPIs is a “top-down” process, meaning that all KPIs
ultimately should relate to the corporate goal. Each maintenance department or
organization must therefore make sure that their sets of KPIs are in alignment
with corporate objectives.

5. Successful KPI
determination
Financial (eg. Maintenance
cost per unit of production or
inventory value as a percentage
of estimated replacement value).
Maintenance process KPIs
providing timely warning that
scope for improvement exists
(eg. Predictive maintenance
effectiveness or Emergency
purchase orders raised as a
percentage of all purchase
orders raised).
Overall maintenance performance assessing
the quality and efficiency of services provided to the
organization; for example the unscheduled downtime
as a percentage of total downtime.
Functional KPIs to identify specific improvements for
individual activities such as Preventative and predictive
maintenance. These could include cost savings that result
from early detection of faults (measuring PdM
effectiveness) and schedule compliance
of estimated replacement value.
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6. System-related KPIs identifying
the effectiveness and utilization of
maintenance management systems,
such as the number of equipment items
that exist within the CMMS database,
expressed as a percentage of the total
number of equipment items on site.e of
estimated replacement value).
Inventory management KPIs involved in
the measurement of maintenance inventory
management often parallel KPIs employed for
management of other inventories (i.e. raw
materials, work in progress, or finished goods).
Personal development KPIs such as
training hours per maintenance employee.
Successful KPI
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7. Not knowing what
good looks like3
Benchmarking is a continuous improvement process through which an organization
attempts to identify “world class” or “best in class” practices through studies of other
organizations and their procedures.
Benchmarking projects cannot be quantified unless performance is measured and
improvements are tracked. However, there is more to benchmarking than just
metrics. In fact, an over emphasis on metrics may cause benchmarking to lose
focus, as the real objective of a benchmarking exercise is to identify the practices
behind the metrics.
When a performance indicator can be clearly and unambiguously aligned with
best practice, it becomes a benchmark that may be employed as
a process improvement goal.

8. Choosing KPIs that are
too hard to measure4
Like any other monitoring process, effective use of KPIs requires a clear and
accurate measurement process. If data varies due to collection inconsistencies, the
degree of change needs to be greater before it assumes significance, which causes
timeliness to be impaired.
If it is not possible to identify a hard objective measurement for a key issue, inject
some logic into the assessment process by specifying definite conditions relative to
values recorded.

9. Not making it part
of a living program5
After establishing the required regime of KPIs and configuring the business
processes to collate the required data, results should be subject to regular review
and analysis. Numerous tools are available to aid tracking and interpretation of KPIs.
Simple, easily understood KPI graphical can dispel suspicions about the reasons
for data collection, and may have a positive motivational effect. Such displays help
individuals understand the contribution made by them towards the corporate result.

10. Avoiding these
5 common pitfalls
KPIs should provide alignment of individual processes
to long term corporate goals as well as timely, clear,
and unambiguous warning of opportunities for process
improvement.