Module 16: Performance Measurement


AM KPI Definition There is no clear link between the AM strategy and what is being measured. The success of asset management is judged subjectively based on emotional factors, such as the amount of breakdown downtime and the time required to respond to emergencies. Some high level AM KPIs are monitored by senior management:
• They form part of managements monthly information pack.
• They focus mainly on maintenance budget compliance.
• Asset availability or downtime per department or area is also measured.
• Safety is monitored.
A formal AM Scorecard has been set up from the standard list of AM KPIs:
• The Steering Committee selected the AM KPIs to be measured.
• These AM KPIs are derived from the AM Policy and Strategy.
• Maintenance is still the main focus.
• Some AM KPIs are deployed to tactical and operational levels.
The KPIs have been expanded to address all aspects of asset management:
• All elements of the AM Policy and Strategy are measured.
• The KPIs cover asset performance, costs, risks and control of AM activities.
• A full set of AM KPIs exist on strategic, tactical and operational levels.
The AM KPIs have been refined  and updated:
• They explicitly measure return on asset investment e.g. RONA or EVA.
• They are grouped into leading and lagging indicators.
•  They change according to AM priorities and external circumstances.
KPI Deployment Employees at lower levels in the organisation are unaware of the asset management goals or of the performance of assets. They are only involved when blame is allocated or culprits identified for breakdowns and other disasters. Asset care personnel have some KPIs to measure their performance:
• The KPIs help them to focus on the important aspects of asset care.
• They are interested in the results and committed to improvements.
• All KPIs are not under their direct control.
The important AM KPIs have been deployed to teams and individuals:
• The KPIs are linked to the AM Strategy.
• The KPIs are understandable with specific formulas.
•  They are under the control of the accountable people.
• There are not more than 7 KPIs per person or team.
The AM KPIs have been expanded to cover all asset management functions:
• There is full alignment and line of sight with the AM Strategy.
• Everyone understands the applicable KPIs and what influences them.
• All teams and individuals can interpret the story behind their KPIs.
The AM KPI deployment is now inclusive and explicit:
• Employees are involved in reviewing their AM KPIs.
• The KPIs are more applicable to their situation and easier to understand.
• These KPIs guide everyones day to day behaviour.
Performance Targets No or very few formal AM performance measures exist in the organisation and the ones that do exist ,do not have specific improvement targets. Good or bad performance is therefore subjective or emotional decisions.  Only some of the selected AM KPIs have improvement targets:
• These targets are formally documented and shown on the graphs and reports.
• They are defined by management with no or little consultation.
• They are not based on any analytical process and are often unrealistic.
• No specific dates have been agreed for the achievement of these targets.
The AM KPI targets are formalised:
• They are based on an analysis of current performance and strategic goals.
• Employees understand the actions and potential obstacles to achieve them.
• They are linked to specific action plans.
• Specific dates have been agreed for achieving these targets.
• Employees have accepted them and are motivated to improve performance.
The AM KPI targets are now mature:
• They are linked to the team and individual performance charters and incentives.
• They are based on external benchmarks in similar organisations.
• They are reviewed annually in line with performance and the AM Strategy.
• Teams have full management support to achieve the targets.
The process of setting AM KPI targets is at an excellent level:
• They are set jointly by management and the teams based on overall targets.
• They are reviewed quarterly as part of the continuous improvement drive.
•  They equal or better international industry standards.
Communication There is no or very little communication of asset management results to the broader organisation. They are either kept at a management level or used to blame or punish employees. AM KPIs are communicated in an ad hoc and non-standard way:
• Some high level KPIs are included in the monthly management report.
• Some lower level KPIs are displayed in different formats on notice boards.
• The KPIs appear to be fragmented and do not tell a cohesive story.
AM KPI display is more formal and structured:
• Performance trends against targets are shown graphically for key AM KPIs.
• Graphs are updated at least weekly.
• The organisations performance is displayed on a central notice board.
• Team performance is shown on a team notice board in the workplace.
KPIs are displayed electronically:
• Electronic dashboards are available at key points in the workplace.
• Performance trends against targets are shown graphically for all AM KPIs.
• Performance gaps are highlighted.
• Employees can drill down to data to find the reasons for poor performance.
• Graphs originate from the EAMS and are updated on a daily/weekly basis.
KPI display is in real time where possible:
• Interactive dashboards are widely available and visible in the workplace.
• The information displays are user-friendly and everyone can use it.
• Information is real time and refreshed frequently where applicable.
Usage The available information is not being used in a structured way, except for blame allocation and punishment of the guilty. Performance measures are used on an ad hoc basis for control:
• Operational statistics are reported and discussed in management meetings.
• Information is reported against targets with little analysis or interpretation.
• The focus is on compliance or controlling of people.
Performance measures are used in a structured way for improvements:
• All KPIs have specific persons responsible for improvements.
• Trends and gaps are discussed during management meetings resulting in specific follow-up actions.
• Teams discuss performance gaps during daily team meetings, resulting in actions.
Performance gaps are analysed with data mining to drive improvements:
• At senior management and Steering Committee level for strategic problems.
• At tactical or middle management level for systems problems.
• At operational level for day to day problems.
Leading KPIs and trends are used to anticipate and prevent problems:
• At senior management and Steering Committee level for strategic problems.
• At tactical or middle management level for systems problems.
• At operational level for day to day problems.