Scrambling around for KPI’s? Below are some examples to use in your KPI Report
KPI measuring Performance
- Performance/ Client reports due by X deadline
- KPI dashboard- underperformance
- KPI Improvement Plan
- Contractual Milestones met
- Supplier attendance at meetings
- Invoice accuracy
- Benchmark report/ cost adjustment
KPIs can be qualitative or quantitative but mostly they are expressed as a % for the desired performance, these are measurable. Use RAG for the rating.
A weighted scorecard can be useful for quantifying performance by assigning a weighting to different areas to be measured. Consecutive monthly scorecards can also be used to get a visual on trends and is handy to share with suppliers during account review meetings.
Examples
- Lead time against industry norm
- Cost reduction programme
- Risk assessment and compliance
- Delivery on time
- Quality tolerance/ conformance
- Helpdesk response times
- Cost management
- Resources dedicated to project
- Delivery performance
- Service performance
- H&S compliance
- Customer satisfaction
Price can be measured as a KPI for target total contract value/ life-cycle cost, a number of successful cost reduction initiatives, the acceptable range of cost variance or increases.
Quality
- Wrong orders, rejections, poor quality
- Number of complaints
- Accreditation
- Quality standards
Relationship
- Competence and co-operation of account manager
- Response time for queries
- After sales service
Innovation
- Number of innovation initiatives
- Willingness to provide collaboration opportunities
Technology
- Orders completed online
- Response time for technology breakdown
A KPI is different to a Service Level Agreement (SLA)
An SLA is a formal statement of performance requirements. It is supposed to help suppliers and customers communicate by outlining the expectations. Content will include the following:
- What service is included
- Standards required
- Allocation of responsibility, tasks, activities
- How measurement will be applied
- Complaints and resolution procedure
- Frequency
- Hours of operation
The SLA should be reasonable. If it is too difficult to meet targets the supplier is more prone to failure which might negatively affect the relationship without adding real value.
The supplier should be informed about where priorities lie.
KPI Examples
|
Key Performance Area |
(Optional) Performance Criteria Considerations |
1. Major Concerns |
2. Minor Concerns |
3. Meeting Expectations |
4. Exceeding Expectations |
|
Quality |
Fit for purpose products SLA/KPI: |
The supplier frequently fails to supply goods/services and provide a service which meets the specification. |
The supplier usually supplies goods/services and provides a service which is compliant with the specification. |
The supplier consistently supplies goods/services and provides a service which is compliant with the specification. |
The supplier consistently exceeds the specification in terms of the goods and the service provided. |
|
Returns/Inadequate Service KPI |
Goods frequently have to be returned or service is inadequate due to a failure by the supplier. |
Goods occasionally have to be returned or service is inadequate due to a failure by the supplier. |
Returns or inadequate service due to a failure by the supplier are infrequent. |
Returns or inadequate service due to a failure by the supplier are rare and supplier actively works with customer to understand if there are other issues resulting in the return. |
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Continual Improvement/Innovation Such as |
The supplier does not identify or work with the buyer in identifying opportunities to introduce or implement improvements in the delivery of the contract |
There are some attempts by the supplier at identifying opportunities for continue improvement and innovation. |
The supplier and buyer work together in identifying opportunities for continual improvement or innovation during the contract performance review process. |
Innovation is embedded as part of the business culture, the supplier works with the buyer in actively seeking opportunities for continual improvement and innovation, and share the benefits. |
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Change Management Such as – Reactive or proactive approach to change management |
Does not respond to, or manage change effectively |
Responds effectively to change requests when prompted, but the response can be slower than required |
Responds effectively to change requests when prompted |
Proactively considers change which could impact users, responds accordingly and communicates promptly |
| Key Performance Area | (Optional) Performance Criteria Considerations | 1. Major Concerns | 2. Minor Concerns | 3. Meeting Expectations | 4. Exceeding Expectations |
| Cost | Pricing Stability [Outwith agreed 12 month pricing reviews] | Prices are unstable, frequent changes to prices | Infrequent changes to prices but not as a result of the agreed price review. | Prices remain stable for the agreed period of time. Any changes have been previously communicated as a result of formal price reviews | Prices remain stable after the price review. Supplier actively manages pricing – passes on savings/extends time period for fixed pricing |
| Invoice Accuracy Such as – Promoting opportunities to improve invoice accuracy SLA/KPI: – Invoice queries resolved within 24 hours | Invoices are frequently incorrect, invoices are unclear and queries are seldom resolved within 24 hours | Occasional problems with the accuracy of invoices, generally invoice queries are resolved within 24 hours | Invoices provide detailed, accurate cost information, queries seldom occur but are always resolved on the day they are raised. | The supplier is proactive in identifying opportunities to improve the invoice process to reduce error (cxml invoicing, pcards, punchout) | |
| Cost Reduction Initiatives Such as: – Promoting with organisations the use of contracted products or alternative services which offer better value – Promoting the use of consolidated invoicing – Promoting the use of consolidated ordering – Promoting and supporting the use of e-Procurement solutions (eg ePS, supplier ordering portals) | The supplier does not identify initiatives which could result in cost reductions being achieved. | The supplier responds to cost reduction initiatives which are suggested by the buyer. | The supplier fully co-operates with the buyers in suggesting and responding to cost reduction initiatives. | The supplier is proactive in identifying cost reduction initiatives and promoting best practice in order that they are realised. |
| Key Performance Area | (Optional) Performance Criteria Considerations | 1. Major Concerns | 2. Minor Concerns | 3. Meeting Expectations | 4. Exceeding Expectations |
| Sustainability | Corporate Social Responsibility Such as – Promotion of ‘Green/Recycled’ products – Opportunities to reduce number of deliveries (consolidate) – Initiatives that impact upon organisations green agenda – use of services which use less resources | The supplier does not promote products/services or identify process improvements which have a positive contribution to CSR | The supplier responds to requests to promote products/services or identify process improvements which have a positive contribution to CSR | The supplier works with the buyer in identifying opportunities to provide products/services or improve process improvements which have a positive contribution to CSR | The supplier is proactive in identifying opportunities to provide products/services or improve process improvements which have a positive contribution to CSR |
| Key Performance Area | (Optional) Performance Criteria Considerations | 1. Major Concerns | 2. Minor Concerns | 3. Meeting Expectations | 4. Exceeding Expectations |
| Service | Responsiveness Such as: – Effective account management – queries dealt with/improvement suggestions made where appropriate – Effective customer service – queries dealt with promptly/appropriate information supplied – Notification of backorders (alternatives offered where appropriate) – Effective communication – supplier ensures there is regular contact and advises of any new products or additional service benefits | The supplier does not readily respond to enquiries or requests. The buyer is required to repeat requests. Communication between the supplier and buyer is virtually non-existent | Generally responses to enquiries or requests are dealt with timely, however there are occasions when these have to be repeated. Communication channels between the buyer and supplier are not as effective as they could be | Consistently good response to enquiries and requests. Buyer and supplier have effective communication channels. | Anticipates and responds to emerging requirements. Responses provide suggestions for improvement. Supplier is pro-active in ensuring effective communication channels. |
| Complaints Such as: – Resolved by first point of contact | A large number of complaints are received from end-users and the supplier does not readily respond or take corrective action. Disputes have to be escalated, with no recognition by the supplier of the need to improve performance | There are only a small number of complaints or disputes, the response is usually positive and corrective action is taken if required, without the need to escalate. | Complaints or disputes are minimal, but are always dealt with effectively without the need to escalate and corrective action is taken if required. | The supplier is proactive in identifying potential areas where complaints or disputes may occur and works with the buyer in taking measures to mitigate against them. | |
| Management Information To be provided in the agreed format and within the agreed timeline with the specific organisation | The supplier does not provide the required Management Information in the agreed format and within the agreed timeline | Generally provides the required Management Information in the agreed format and within the agreed timeline | Consistently provides the required Management Information in the agreed format and within the agreed timeline | Anticipates and responds to ad-hoc Management Information whilst providing the required Management Information in the agreed format and within the agreed timeline | |
| Communication How effectively does the supplier manage communication and respond to enquiries? | The supplier does not communicate effectively and issues raised by the customer are not responded to, or managed effectively | Communication is generally instigated by the customer, and the suppliers response is slow and / or needs pursued for a response | Communication is generally instigated by the customer, but the supplier promptly responds to issues or enquiries | The supplier is proactive in establishing communication and immediately responds to issues as & when they arise | |
| Lead Time/Delivery Time Such as SLA/KPI: – 97% Next day delivery (3 day H&I) for orders before 3pm or 4pm if electronic procurement system | Identified target levels are not usually met. | Sometimes failure to meet the identified target levels | Meets the identified target levels | Routinely exceeds the identified target levels | |
| On time Delivery Against Objectives SLA/KPI: – 97% line fulfilment – 97% order fulfilment – 98% returns uplifted next scheduled delivery – 98% out of stock lines fulfilled within 2 working days | Deliveries and Returns do not usually meet the identified target levels. | Sometimes failure to comply with delivery and return schedule and identified target levels | Complies with delivery and returns schedule and identified target levels | Routinely exceeds compliance with delivery and returns schedule and target levels | |
| Accuracy – 98% of achieved deliveries are accurate against the corresponding Purchase Order – Substitutions only occur where prior agreement has been made | Deliveries are frequently inaccurate – wrong products, short delivery, delivery note does not match what was delivered. | Occasionally deliveries are inaccurate – wrong products, short delivery, delivery note does not match what was delivered. | Deliveries are always accurate – with delivery notes accurately reflecting what has been delivered and matching the purchase order. | Deliveries are always accurate, however the supplier is also proactive in identifying future problems and works with the buyer to mitigate against problems occurring. | |
| Ownership/Involvement Does the suppliers’ management structure interface effectively with the customers organisational structure? i.e. does the supplier demonstrate involvement / ownership at the appropriate level e.g. Account Manager when many touch points within supplier, MD for supplier for key strategic suppliers owning relationship? | The suppliers’ management structure and how it interfaces with the customer is not clearly defined or understood by the customer | The suppliers management structure is partially aligned to the customers organisational structure, but there are gaps meaning that it’s not always easy for the customer to communicate effectively with his equivalent at the supplier | The suppliers management structure is generally aligned to the customers organisational structure , but internal personnel changes within the suppliers organisational structure and / or holiday cover can cause occasional gaps | The suppliers management structure is fully aligned to the customers organisational structure . The customer can easily and effectively communicate with their supplier equivalent |
| Key Performance Area | (Optional) Performance Criteria Considerations | 1. Major Concerns | 2. Minor Concerns | 3. Meeting Expectations | 4. Exceeding Expectations |
| Service | Responsiveness Such as: – Effective account management – queries dealt with/improvement suggestions made where appropriate – Effective customer service – queries dealt with promptly/appropriate information supplied – Notification of backorders (alternatives offered where appropriate) – Effective communication – supplier ensures there is regular contact and advises of any new products or additional service benefits | The supplier does not readily respond to enquiries or requests. The buyer is required to repeat requests. Communication between the supplier and buyer is virtually non-existent | Generally responses to enquiries or requests are dealt with timely, however there are occasions when these have to be repeated. Communication channels between the buyer and supplier are not as effective as they could be | Consistently good response to enquiries and requests. Buyer and supplier have effective communication channels. | Anticipates and responds to emerging requirements. Responses provide suggestions for improvement. Supplier is pro-active in ensuring effective communication channels. |
| Complaints Such as: – Resolved by first point of contact | A large number of complaints are received from end-users and the supplier does not readily respond or take corrective action. Disputes have to be escalated, with no recognition by the supplier of the need to improve performance | There are only a small number of complaints or disputes, the response is usually positive and corrective action is taken if required, without the need to escalate. | Complaints or disputes are minimal, but are always dealt with effectively without the need to escalate and corrective action is taken if required. | The supplier is proactive in identifying potential areas where complaints or disputes may occur and works with the buyer in taking measures to mitigate against them. | |
| Management Information To be provided in the agreed format and within the agreed timeline with the specific organisation | The supplier does not provide the required Management Information in the agreed format and within the agreed timeline | Generally provides the required Management Information in the agreed format and within the agreed timeline | Consistently provides the required Management Information in the agreed format and within the agreed timeline | Anticipates and responds to ad-hoc Management Information whilst providing the required Management Information in the agreed format and within the agreed timeline | |
| Communication How effectively does the supplier manage communication and respond to enquiries? | The supplier does not communicate effectively and issues raised by the customer are not responded to, or managed effectively | Communication is generally instigated by the customer, and the suppliers response is slow and / or needs pursued for a response | Communication is generally instigated by the customer, but the supplier promptly responds to issues or enquiries | The supplier is proactive in establishing communication and immediately responds to issues as & when they arise | |
| Lead Time/Delivery Time Such as SLA/KPI: – 97% Next day delivery (3 day H&I) for orders before 3pm or 4pm if electronic procurement system | Identified target levels are not usually met. | Sometimes failure to meet the identified target levels | Meets the identified target levels | Routinely exceeds the identified target levels | |
| On time Delivery Against Objectives SLA/KPI: – 97% line fulfilment – 97% order fulfilment – 98% returns uplifted next scheduled delivery – 98% out of stock lines fulfilled within 2 working days | Deliveries and Returns do not usually meet the identified target levels. | Sometimes failure to comply with delivery and return schedule and identified target levels | Complies with delivery and returns schedule and identified target levels | Routinely exceeds compliance with delivery and returns schedule and target levels | |
| Accuracy – 98% of achieved deliveries are accurate against the corresponding Purchase Order – Substitutions only occur where prior agreement has been made | Deliveries are frequently inaccurate – wrong products, short delivery, delivery note does not match what was delivered. | Occasionally deliveries are inaccurate – wrong products, short delivery, delivery note does not match what was delivered. | Deliveries are always accurate – with delivery notes accurately reflecting what has been delivered and matching the purchase order. | Deliveries are always accurate, however the supplier is also proactive in identifying future problems and works with the buyer to mitigate against problems occurring. | |
| Ownership/Involvement Does the suppliers’ management structure interface effectively with the customers organisational structure? i.e. does the supplier demonstrate involvement / ownership at the appropriate level e.g. Account Manager when many touch points within supplier, MD for supplier for key strategic suppliers owning relationship? | The suppliers’ management structure and how it interfaces with the customer is not clearly defined or understood by the customer | The suppliers management structure is partially aligned to the customers organisational structure, but there are gaps meaning that it’s not always easy for the customer to communicate effectively with his equivalent at the supplier | The suppliers management structure is generally aligned to the customers organisational structure , but internal personnel changes within the suppliers organisational structure and / or holiday cover can cause occasional gaps | The suppliers management structure is fully aligned to the customers organisational structure . The customer can easily and effectively communicate with their supplier equivalent |
