A Domain-independent Model for KPI-based Process Management
Authors: Benedict Wohlers, Jan Strüwer, Felix Schreckenberg, Felix Barczewicz, Stefan Dziwok
Abstract: Monitoring, assessing, and improving company processes is one of the most important and challenging tasks of management. Key Performance Indicators (KPIs) are a well-established means of assessing and managing company processes and performance. In previous publications, we transferred the concept of KPIs to mechatronic products. Here KPIs are calculated based on data generated within the production process. Thus, the KPIs provide information about the current condition of the production process and produced products and enable efficient product and process control. The basis of this approach is a KPI model, which enables the specification of company-specific products, product-specific KPIs, and limits. By structuring the KPIs as a hierarchical system, company goals can be expressed at different levels of abstraction through the KPIs and their limits. Thus, goals are assessable for stakeholders at all management levels, which eases communication and reporting. Furthermore, the hierarchical approach allows for a high degree of transparency regarding the monitored processes and potential bottlenecks. Underperforming KPIs can be explained in more detail by diving into subordinated KPIs, utilizing the provided hierarchy. In this paper, we present a revised, domain-independent version of our KPI model. The revised model allows the definition of company-specific processes, products, and data sources that can be linked to the KPIs. In addition, mechanisms have been implemented to add additional parallel or hierarchical company-related levels, such as teams or company sites. To illustrate this, we show the application of the model in two different domains: Supply chain management and software development. For supply chain management, we consider the supply of parts in the material procurement of a manufacturing company. To ensure smooth production, it is essential that the right components are available and, thus, the so-called Seven-Rights of logistics are guaranteed. At the same time, high availability with other target variables is tangential to high logistical efficiency in a company's procurement and production. In this paper, the component availability is considered as top-level KPI, which consists of subordinated KPIs such as the delivery quantity reliability or the delivery time announced by the supplier. Thus, increased component availability can be achieved and further information, such as supplier quality, can be derived and utilized.For software development, we utilize the KPI model to assess and guide a company's DevOps transformation. DevOps was inspired by agile approaches to manage and improve production processes, such as Lean or the Toyota Way. The DevOps transformation is difficult for most companies, as each company may have different reasons and goals associated with it. Some companies aim to increase their software deployment rate, while others focus on software stability and quality. To support companies with this complex task of changing their development process, as well as parts of their organization's culture, a flexible and unique model is needed. In our example, a DevOps maturity index, based on performance, quality, and organizational KPIs is introduced using our KPI model. Based on this index, the status of the DevOps transformation is monitored and the next steps for the transformation can be derived.
Keywords: Key Performance Indicator (KPI), Process Management, Process Control, Supply Chain Managementm, DevOps
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