Generic Cross-Industry

Transcription

1 Generic Cross-Industry Published by biz4ge For further information visit our website: biz4ge.kz-a.net or contact us at RIGHTS AND PERMISSIONS 2011 Biz4ge. ALL RIGHTS RESERVED. This work is licensed under the Creative Commons Attribution-NonCommercial- ShareAlike (cc-by-nc-sa) License v3.0. Biz4ge encourages the wide distribution, discussion and use of this Generic Cross- Industry document. Biz4ge grants permission for use and adaptation of this reference guide for internal use..i.e. it may be used freely by any organisation for use within that organisation. For external use, Biz4ge grants permission for non-commercial publication, distribution and use, provided that proper copyright acknowledgment is made to Biz4ge. The commercial re-selling of the content of this reference guide, or delivery of any commercial work to third parties based directly upon it, is not allowed. Please contact Biz4ge if you are interested in commercial use terms. No modifications to the look or content of this reference guide should be made in external venues. Please embed an attribution link to our website at biz4ge.kz-a.net when reusing this reference guide in external print or electronic content. This reference guide has been compiled from various sources, edited and published by Biz4ge, all rights reserved. Biz4ge makes no assurances, explicit or implied, that this guide will enable any person or organisation, using all or any part of it, to successfully define their own business architecture, organise or manage a successful business transformation or change management initiative based on this or any other business architecture, or to capture any tangible or other benefit related to said business architecting efforts. All users use this reference guide at their own risk, agree to indemnify Biz4ge from any and all claims arising as consequence of this use, and understand that they should seek the appropriate professional advice before and as part of entering into any business architecture related work efforts. Revision: v1.05 Page: 1 of 59

2 Table of Contents User Notes: This reference guide is structured in line with the Balanced Scorecard Business Metrics Model found at the beginning of this document. The figures in brackets, i.e. Metric (x), found after each metric are their identification numbers. Generic Cross-Industry... 1 RIGHTS AND PERMISSIONS... 1 Table of Contents... 2 Balanced Scorecard Business Metrics Model Financial View Measures how do our owners see us? Fundamentals Related Balance sheet (2) Cashflow forecast (3) Long-term debt level (8) Market share % (7) Net change in cash position (6) P&L (1) ROI / ROA / ROCE / NPV / EVA (4) Shareholder EPS / PE ratio (5) Ratios Related Customer service costs as a % of sales (19) Inbound transport & warehousing costs as a % of sales (15) Inventory turnover / Turns ratio (9) Labour costs as a % of sales (18) Marketing costs as a % of sales (12) Materials costs as a % of sales (17) Order management costs as a % of sales (14) Outbound transport & warehousing costs as a % of sales (16) Revision: v1.05 Page: 2 of 59

3 R&D costs as a % of sales (13) Revenue per employee / Profitability per employee (10) Value-add per employee / Employee productivity (11) Warranty repair or replacement costs as a % of sales (20) Process View Measures how effective and efficient are our business processes and measures? Output Related % of IT contribution in ROTA (83) % of sales revenue via channel partner (71) Age of assets (82) Average customer order size (67) Book-to-bill ratio (75) FTL rate / LTL rate (80) Idea conversion rate / Ratio of number of concepts to actual products and services (74) Inventory stock cover days (78) Marketing campaign response rate (72) New product / service sales cannibalisation ratio (73) Weighted lifetime value by customer pareto (66) Order backlog (76) Order entry error rate (77) Overall equipment effectiveness [OEE] (81) Product and service profit margin (64) Sales conversion rate / Sales close rate / New customer conversion rate (70) Sales productivity ratio (69) Total shipments delivered (79) Revision: v1.05 Page: 3 of 59

4 Units produced / Units assembled by value & volume (62) Units sold by value & volume (63) Value of recovered materials (125) Weighted profitability by customer pareto (65) Weighted spend by supplier pareto (68) Time Related % IT incidents solved within SLA time (93) Average plan variance / Average schedule variance (88) Average time to approve NPD projects (86) Average time to project completion (87) Cumulative time of mission-critical IT outages (94) Equipment downtime (91) Forecast accuracy (122) Line stoppages / Work stoppages (89) Number of lost time days (90) Repair time / MTTR (92) S&OP accuracy (123) Sales cycle time (84) Time-to-market / Time-to-volume / Time-to-profit for products / services (85) Cost Related Average accident costs (107) Average cost of a tender / Average cost of a bid (100) Average cost to recruit per job position (104) Budget variances (96) Cost by customer account (103) Cost of non-compliance (108) Revision: v1.05 Page: 4 of 59

5 Creditor days (99) Debtor days / Aged debt / % of overdue invoices (98) Overtime payments (97) Revenue per square meter floor space utilisation (106) Total cost of customer acquisition (102) Total warranty work hours / Total warranty costs (105) Unit costs (95) Value of sales lost by reason (101) Quality Related % active SKUs / % active part numbers (112) % of first-line resolution of IT service requests (118) % of NPD projects in control (116) % of payable invoices without purchase order (113) % of procurement requests satisfied by preferred suppliers (115) Contract SLA performance (126) Design to cost accuracy (117) Inventory / BOM accuracy & adjustments (111) IT availability % (119) Number of (major) internal control breaches (121) Percentage of problem suppliers (114) Production material shortages / Production material outages (110) Timeliness in submission of statutory returns (120) Yield rate / Scrap rate / Rework rate / Reject rate / Error rate / NRFT rate (109) Customer View Measures how do our customers see us? Product & Service Offerings Related % sales from new products and services (24) Revision: v1.05 Page: 5 of 59

6 Average product / service price (22) New products and services introduced per annum (21) Number of new product and service failures per annum (23) Delivery Performance Related On time shipment rate (27) Order fill rate / Inventory stockout rate (26) Order lead time / Order cycle time (29) Order processing time / Order placement response time (28) Perfect order performance (25) Customer Service Related % of customers given satisfaction surveys (31) % of returning customers (37) Average response time to resolve customer complaints (36) Customer churn rate / Customer loyalty rate (30) Customer satisfaction index (32) First contact customer issue resolution rate (35) Number of customer complaints / Number of customer returns (34) Number of satisfied customers (33) Corporate Social Responsibility (CSR) Related % of obsolete / defunct material recycled (124) CO2 tons per employee (39) Number of accidental releases of controlled or monitored substances (38) Number of repeated compliance audit failure findings (41) Environment, Health & Safety (EH&S) audit scores (40) People & Learning View Measures how well do we develop our people and adopt new knowledge? Revision: v1.05 Page: 6 of 59

7 Work Habits Related Absenteeism rate / Tardiness rate (42) Number of times work was stopped due to an unplanned, unsafe condition (45) Number of violations of safety rules (44) Number of visits to the dispensary / Number of first aid treatments (43) Work Climate Related % of new hire retention (52) Average tenure per employee (53) Cycle time from job acceptance until job start / Average time to recruit (51) Employee job satisfaction index (49) Employee turnover rate / Employee request for transfer rate (50) Number of employee complaints (48) Number of grievances filed / Number of discriminations filed (47) Organisation s litigation rate (46) Workforce Development / Advancement Related % of new ideas from outside the organisation (58) Average number of training hours per employee (57) Average performance appraisal rating (60) Lessons learned adoption rate (59) Number of promotions / Number of pay increases (54) Number of training programmes attended (55) Rate of increase in employee job performance (61) Training penetration rate (56) APPENDIX 1 Business Metrics by Process Area Context to Capability Affiliated Metrics ROI / ROA / ROCE / NPV / EVA (4) Revision: v1.05 Page: 7 of 59

8 Shareholder EPS / PE ratio (5) Context to Vision Affiliated Metrics P&L (1) Balance sheet (2) Cashflow forecast (3) Vision to Strategy Affiliated Metrics Net change in cash position (6) Long-term debt level (8) Revenue per employee / Profitability per employee (10) Value-add per employee / Employee productivity (11) Strategy to Capability Affiliated Metrics Budget variances (96) Concept to Catalogue Affiliated Metrics R&D costs as a % of sales (13) Concept to Competence Affiliated Metrics % of new ideas from outside the organisation (58) Idea conversion rate / Ratio of number of concepts to actual products and services (74) Competence to Confidence Affiliated Metrics New products and services introduced per annum (21) Average time to approve NPD projects (86) % of NPD projects in control (116) Confidence to Catalogue Affiliated Metrics Time-to-market / Time-to-volume / Time-to-profit for products / services (85) Average time to project completion (87) Design to cost accuracy (117) Revision: v1.05 Page: 8 of 59

9 3.1 Budget to Forecast Affiliated Metrics Forecast accuracy (122) Forecast to Constrain Affiliated Metrics Units produced / Units assembled by value & volume (62) S&OP accuracy (123) Constrain to Plan Affiliated Metrics Average plan variance / Average schedule variance (88) Opportunity to Order Affiliated Metrics Marketing costs as a % of sales (12) Opportunity to Offering Affiliated Metrics Market share % (7) Marketing campaign response rate (72) New product / service sales cannibalisation ratio (73) Offering to Target Affiliated Metrics Average product / service price (22) Number of new product and service failures per annum (23) % sales from new products and services (24) Product and service profit margin (64) Weighted profitability by customer pareto (65) Weighted lifetime value by customer pareto (66) % of sales revenue via channel partner (71) Total cost of customer acquisition (102) Cost by customer account (103) Target to Dialog Affiliated Metrics Units sold by value & volume (63) Sales productivity ratio (69) Revision: v1.05 Page: 9 of 59

10 Sales conversion rate / Sales close rate / New customer conversion rate (70) Sales cycle time (84) Average cost of a tender / Average cost of a bid (100) Value of sales lost by reason (101) Dialog to Order Affiliated Metrics Order management costs as a % of sales (14) Average customer order size (67) Book-to-bill ratio (75) Order backlog (76) Order entry error rate (77) Order to Cash Affiliated Metrics Inventory turnover / Turns ratio (9) Order lead time / Order cycle time (29) Unit costs (95) Inventory accuracy (i.e. CC/PI) & adjustments (111) % active SKUs / % active part numbers (112) Order to Purchase Affiliated Metrics Materials costs as a % of sales (17) Weighted spend by supplier pareto (68) Production material shortages / Production material outages (110) % of procurement requests satisfied by preferred suppliers (115) Purchase to Pay Affiliated Metrics Inbound transport & warehousing costs as a % of sales (15) Creditor days (99) % of payable invoices without purchase order (113) Pay to Produce Affiliated Metrics Revision: v1.05 Page: 10 of 59

11 Labour costs as a % of sales (18) Overall equipment effectiveness [OEE] (81) Line stoppages / Work stoppages (89) Number of lost time days (90) Equipment downtime (91) Repair time / MTTR (92) Yield rate / Scrap rate / Rework rate / Reject rate / Error rate / NRFT rate (109) Produce to Cash Affiliated Metrics Outbound transport & warehousing costs as a % of sales (16) Perfect order performance (25) Order fill rate / Inventory stockout rate (26) On time shipment rate (27) Inventory stock cover days (78) Total shipments delivered (79) FTL rate / LTL rate (80) Debtor days / Aged debt / % of overdue invoices (98) Cash to Care Affiliated Metrics Customer service costs as a % of sales (19) % of customers given satisfaction surveys (31) Customer satisfaction index (32) Number of satisfied customers (33) Number of customer complaints (34) Care to Repair Affiliated Metrics Warranty repair or replacement costs as a % of sales (20) First contact customer issue resolution rate (35) Average response time to resolve customer complaints (36) Revision: v1.05 Page: 11 of 59

12 Total warranty work hours / Total warranty costs (105) Repair to Dispose Affiliated Metrics % of obsolete / defunct material recycled (124) Value of recovered materials (125) Supply to Review Affiliated Metrics Percentage of problem suppliers (114) Collaborate to Refresh Affiliated Metrics Revenue per square meter floor space utilisation (106) Contract SLA performance (126) Service to Retain Affiliated Metrics Customer churn rate / Customer loyalty rate (30) % of returning customers (37) Invest to Comply Affiliated Metrics Organisation s litigation rate (46) Record to Review Affiliated Metrics Age of assets (82) Timeliness in submission of statutory returns (120) Number of (major) internal control breaches (121) Recruit to Retain Affiliated Metrics Absenteeism rate / Tardiness rate (42) Number of visits to the dispensary / Number of first aid treatments (43) Number of grievances filed / Number of discriminations filed (47) Number of employee complaints (48) Employee job satisfaction index (49) Employee turnover rate / Employee request for transfer rate (50) Cycle time from job acceptance until job start / Average time to recruit (51) Revision: v1.05 Page: 12 of 59

13 % of new hire retention (52) Average tenure per employee (53) Number of promotions / Number of pay increases (54) Number of training programmes attended (55) Training penetration rate (56) Average number of training hours per employee (57) Average performance appraisal rating (60) Rate of increase in employee job performance (61) Overtime payments (97) Average cost to recruit per job position (104) Encode to Enlighten Affiliated Metrics % of IT contribution in ROTA (83) % IT incidents solved within SLA time (93) Cumulative time of mission-critical IT outages (94) % of first-line resolution of IT service requests (118) IT availability % (119) Assess to Assure Affiliated Metrics Number of accidental releases of controlled or monitored substances (38) CO2 tons per employee (39) Safety audit scores (40) Number of repeated compliance audit failure findings (41) Number of violations of safety rules (44) Number of times work was stopped due to an unplanned, unsafe condition (45) Average accident costs (107) Cost of non-compliance (108) Inform to Improve Affiliated Metrics Revision: v1.05 Page: 13 of 59

14 Lessons learned adoption rate (59) Balanced Scorecard Business Metrics Model Revision: v1.05 Page: 14 of 59

15 Financial View Measures how do our owners see us? Good practice metrics included in the balanced scorecard financial view include: Fundamentals Related Balance sheet (2) A financial statement that summarises a company's assets, liabilities and shareholders' equity at a specific point in time. These three balance sheet segments give investors an idea as to what the company owns and owes, as well as the amount invested by the shareholders. The balance sheet must follow the following formula: (Assets = Liabilities + Shareholders Equity). Cashflow forecast (3) The forecast of a revenue or expense stream that changes a cash account over a given forecast period. Cash inflows (i.e. revenues) usually arise from one of three activities financing, operations or investing. Cash outflows result from expenses or investments. Long-term debt level (8) The total level of loans and other financial obligations having an estimated payback extending beyond a year. Market share % (7) Percentage of sales relative to the size of the total market. Net change in cash position (6) The difference between the cash and cash equivalents position at the beginning of the reporting period minus the amount at the end of the reporting period. P&L (1) Profit & Loss (P&L) = a financial statement that summarises the revenues, costs and expenses incurred during a specific period of time usually a fiscal quarter or year. These records provide information that shows the ability of a company to generate profit by increasing revenue and reducing costs. Revision: v1.05 Page: 15 of 59

16 ROI / ROA / ROCE / NPV / EVA (4) Return on Investment (ROI) = the amount, expressed as a percentage, that is earned on a capital. Calculated by dividing the total capital into earnings before interest, taxes, or dividends are paid. Return On Assets (ROA) = an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how efficient management is at using its assets to generate earnings. Calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a percentage. Return On Capital Employed (ROCE) = this calculates net profit as a percentage of the total capital employed in a business. It allows you to see how well the money invested in your business is performing compared with other investments you could make with it, like putting it in the bank. Net Present Value (NPV) = the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to analyse the profitability of an investment or project. NPV analysis is sensitive to the reliability of future cash inflows that an investment or project will yield it compares the value of a sum today to the value of that same sum in the future, taking inflation and returns into account. Economic Value Added (EVA) = a measure of a company's financial performance based on the residual wealth calculated by deducting cost of capital from its operating profit (adjusted for taxes on a cash basis). Shareholder EPS / PE ratio (5) Shareholder Earnings Per Share (EPS) = the portion of a company s profit allocated to each outstanding share of common stock. Ratios Related Customer service costs as a % of sales (19) The total cost of customer service expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). Revision: v1.05 Page: 16 of 59

17 Inbound transport & warehousing costs as a % of sales (15) The total cost of inbound transport and warehousing expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). Inventory turnover / Turns ratio (9) Inventory Turnover = the number of times that a company s inventory cycles or turns over per measurement period (i.e. month, quarter, year) aka. Turns Ratio. Labour costs as a % of sales (18) The total cost of labour expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). Marketing costs as a % of sales (12) The total cost of marketing expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). Materials costs as a % of sales (17) The total cost of materials expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). Order management costs as a % of sales (14) The total cost of order management expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). Outbound transport & warehousing costs as a % of sales (16) The total cost of outbound transport and warehousing expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). R&D costs as a % of sales (13) The total cost of R&D (Research & Development) expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). Revenue per employee / Profitability per employee (10) Revenue per Employee = average revenue per employee (or FTE). Revision: v1.05 Page: 17 of 59

18 Profitability per Employee = average profit per employee (or FTE). Value-add per employee / Employee productivity (11) Value-add per Employee = sales value of all products produced / services delivered excluding trading, less cost of raw materials, purchase of components and overheads for the year, divided by the total number of employees / FTEs (i.e. including interims and temps). Employee Productivity = the amount of output per unit of employee input. Usually measured in terms of the value of the output divided by the cost of the employee / FTE time that went into producing that output. Warranty repair or replacement costs as a % of sales (20) The total cost of warranty repairs or replacements expressed as a percentage of total sales for a given reporting period (i.e. month, quarter, year). Revision: v1.05 Page: 18 of 59

19 Process View Measures how effective and efficient are our business processes and measures? Good practice metrics included in the balanced scorecard process view include: Output Related % of IT contribution in ROTA (83) The IT contribution in percentage terms to Return On Total Assets (ROTA). % of sales revenue via channel partner (71) Percentage of sales revenue derived via a channel partner / indirect channel. Age of assets (82) The age of assets is estimated by comparing the depreciated book value with annual depreciation charges. The age is calculated by dividing the cumulative depreciation by the annual depreciation charge. Average customer order size (67) The average amount spent by a customer per order. Many companies have goals of increasing average order size through marketing. Book-to-bill ratio (75) Orders booked in a period divided by revenues in the period. This ratio tells whether the company has more orders than it can deliver (i.e. if greater than 1), has the same amount of orders that it can deliver (i.e. equals 1), or has less orders than it can deliver (i.e. under 1). FTL rate / LTL rate (80) The percentage of total loads that are hauled as Full Truck Loads (FTL) as opposed to the Less Than Truckload (LTL) haulage percentage. The total of FTL + LTL = 100%. Revision: v1.05 Page: 19 of 59

20 Idea conversion rate / Ratio of number of concepts to actual products and services (74) Idea Conversion Rate = the rate at which new ideas are assessed and implemented successfully through improvement initiatives or directly on at the point of operations. Ratio of Number of Concepts to Actual Products and Services = ratio of number of concepts considered to the actual number of products and services introduced into the market place in a given period (i.e. typically a year). Inventory stock cover days (78) Inventory stock cover is the number of days / length of time that inventory will last if current consumption patterns continue. Marketing campaign response rate (72) The number of contacts that responded affirmatively divided by the number of contacts effectively made in the course of a marketing campaign. New product / service sales cannibalisation ratio (73) Calculates the reduction in sales of existing products / services due to sales of new products / services. Weighted lifetime value by customer pareto (66) The rank order placement of the cumulative sales value each customer has had to a business over the time since they began being a customer to date divided (i.e. weighted) by the number of years they have been a customer. Order backlog (76) The sales value and/or quantity of unfilled but confirmed customer orders for products and services as at a specific date. Order entry error rate (77) The total number of errors made in the entry of customer orders divided by the total number of possible customer order data entry steps for those customer orders as measured over a defined period of time (e.g. week, month, quarter). Revision: v1.05 Page: 20 of 59

21 Overall equipment effectiveness [OEE] (81) OEE = Availability x Performance x Quality, where: Availability = Actual Operating Time / Planned Production Time; Performance = Ideal Cycle Time / (Actual Operating Time / Total Items Made); or Performance = (Total Items Made / Actual Operating Time) / Ideal Run Rate; Quality = Good Items Made / Total Items Made. Product and service profit margin (64) The amount that the price of a product or service is raised above its cost in order to provide a gross profit. Sales conversion rate / Sales close rate / New customer conversion rate (70) Sales Conversion Rate = a metric to evaluate the effectiveness of a sales conversion effort, reflecting the percentage of people converted into buyers / subscribers out of the total population exposed to the sales conversion effort. Sales Close Rate = see Sales Conversion Rate New Customer Conversion Rate = same as for Sales Conversion Rate except as applied only to prospects that have been turned into new customers (i.e. new sales to existing customers are not counted). Sales productivity ratio (69) The actual sales revenues achieved over a given period (e.g. month, quarter, year) divided by the total number of sales staff / FTE s involved in making those sales. Total shipments delivered (79) The total number of shipments successfully delivered to customers and channel partners in a given time period (e.g. month, quarter, year). Units produced / Units assembled by value & volume (62) The total number of units that have been made or built in a given time period (e.g. week, month, year) and their associated potential sales value. Revision: v1.05 Page: 21 of 59

22 Units sold by value & volume (63) The total number of units that have been sold in a given time period (e.g. week, month, year) and their associated actual sales value. Value of recovered materials (125) The cumulative monetary value realised from the recovery of all the materials salvaged from the obsolete parts and equipment scrapped as part of a disposal process. Weighted profitability by customer pareto (65) The rank order placement of the cumulative profit each customer has contributed to a business over the time since they began being a customer to date divided (i.e. weighted) by the number of years they have been a customer. Weighted spend by supplier pareto (68) The rank order placement of the cumulative spend a business has made with each supplier over the time since they have been a supplier to date divided (i.e. weighted) by the number of years they have been a supplier. Time Related % IT incidents solved within SLA time (93) Total number of IT incidents resolved within the allotted SLA time divided by the total number of IT incidents. Average plan variance / Average schedule variance (88) The average of any cumulative differences between the planned / scheduled completion time of an activity and the actual completion time. In operations environments planning periods have typical time bucket granularities of weeks and months where-as schedules have typical time bucket granularities of hours / shifts and days. Average time to approve NPD projects (86) The average amount of time taken to approve NPD projects. Revision: v1.05 Page: 22 of 59

23 Average time to project completion (87) The average amount of time required for the completion of projects in the active project portfolio. Cumulative time of mission-critical IT outages (94) The total amount of IT downtime experienced in a given measurement period (e.g. month, quarter, year) of applications and infrastructure that have been classed as mission-critical by the organisation. Equipment downtime (91) The total amount of time equipment spends down or unavailable out of the total time for which its productive operation was planned. Forecast accuracy (122) The difference between the actual outcomes by value, volume and/or time versus those forecast; As measured over a selected time period covered by the original forecast for which actuals data is now available. Line stoppages / Work stoppages (89) The cumulative number of instances and time durations in a specified time period (e.g. week, month, year) that unplanned production line or work cell stoppages have occurred. Frequently a reason code for the stoppage is also noted for each instance. Number of lost time days (90) The total number of days, and often also the accumulated time in each day, in a given time period (e.g. month, quarter, year) that planned productive time was lost due to unanticipated events. Repair time / MTTR (92) Repair Time = the time taken to repair an incident as measured from the time it is reported or logged to when the repair has been completed and normal operation made possible. Mean Time To Repair (MTTR) = the average time between the occurrence of a repair related incident and its resolution. Revision: v1.05 Page: 23 of 59

24 S&OP accuracy (123) The difference between the actual outcomes by value, volume and/or time versus those in the S&OP plan; As measured over a selected time period covered by the original S&OP plan for which actuals data is now available. Sales cycle time (84) The period of time, on average, that it takes from beginning the sales process with a customer to the time the sale is closed and a sales order placed. Time-to-market / Time-to-volume / Time-to-profit for products / services (85) Time-to-Market = the time it takes from when a new or upgraded product or service is initially envisioned or defined until it is first available in the marketplace. Time-to-Volume = the time it takes from when a new or upgraded product or service is initially envisioned or defined until it is available in the marketplace in large volumes. Time-to-Profit = the time it takes from when a new or upgraded product or service is initially envisioned or defined until it is has passed its break-even cost and is profitable. Cost Related Average accident costs (107) The average cost of all accidents that have taken place in a given time period (e.g. month, quarter, year). Note that this metric can also have a non-tangible dimension; e.g. loss of employee or community good-will. Average cost of a tender / Average cost of a bid (100) The average costs associated with a tendering or bidding procedure. Average cost to recruit per job position (104) Average costs of recruitment per job position. Calculated as the total cost of recruitment within the measurement period (e.g. month, quarter, year) divided by the number of job positions successfully filled in that period. Revision: v1.05 Page: 24 of 59

25 Budget variances (96) The monetary amount by which budgeted income or spend deviated from its planned amount in a given time period (e.g. month, quarter, year). Cost by customer account (103) The cost of maintaining each active customer account over a given time period (e.g. month, quarter, year). Cost of non-compliance (108) The total cost of all non-compliance events, including their rectification costs, that have taken place in a given time period (e.g. month, quarter, year). Note that this metric can also have a non-tangible dimension; e.g. loss of customer or regulator good-will. Creditor days (99) The average time that a company takes to pay its creditors; e.g. suppliers. Debtor days / Aged debt / % of overdue invoices (98) Debtor Days = a measure of the average time a debtor payment takes; e.g. customers, channel partners. Aged Debt = the rank order placement of how long on average the cumulative debt for each debtor (e.g. customer, channel partner) has been outstanding. % of Overdue Invoices = the number of invoices that have not been paid before their payment date divided by the total number of invoices issued in a given time period (e.g. month, quarter, year). Overtime payments (97) The cumulative amount of money paid, usually at premium rates, for work carried above and beyond the normally contracted work hours of employees or contractors in a given time period (e.g. month, quarter, year). Revenue per square meter floor space utilisation (106) The total sales revenue achieved in a given time period (e.g. month, quarter, year) divided by the total amount of floor space (in square meters) used by the organisation (i.e. for sales, production, R&D, etc) in the same time period. Revision: v1.05 Page: 25 of 59

26 Total cost of customer acquisition (102) The average cost of all the activities and inducements, both direct and indirect, required to convert a sales prospect into a buying customer. Total warranty work hours / Total warranty costs (105) Total Warranty Work Hours = the number of work hours consumed, both direct and indirect, in fulfilling customer warranty obligations in a given time period (e.g. month, quarter, year). Total Warranty Costs = the cost of all activities, materials and inducements, both direct and indirect, of fulfilling customer warranty obligations in a given time period (e.g. month, quarter, year). Unit costs (95) The total cost of all units produced divided by the total quantity of units produced. Value of sales lost by reason (101) Measures the monetary value of sales lost per time period (e.g. month, quarter, year) by the reason it was lost (e.g. project killed, competition, price, product feature, not interested, etc). Quality Related % active SKUs / % active part numbers (112) % active SKUs = the number of active Stock Keeping Units (SKUs) or Part Numbers (i.e. those for which there has been relatively recent customer demand) divided by the total number of SKUs or Part Numbers being maintained by the organisation expressed as a percentage. % of first-line resolution of IT service requests (118) Percentage of IT service requests that were solved by the first-line without assistance of second and/or third-line support relative to all service requests received within the measurement period (e.g. month, quarter, year). Revision: v1.05 Page: 26 of 59

27 % of NPD projects in control (116) The percentage of NPD projects that are subjectively qualified as in control based on time, cost and quality delivery parameters. % of payable invoices without purchase order (113) Percentage of payable invoices that have not been matched to a valid purchase order. % of procurement requests satisfied by preferred suppliers (115) Percentage of procurement requests satisfied by a vendor on the preferred supplier list. Contract SLA performance (126) Measures the rate at which achievement of an agreed and contractually binding set of performance metrics (SLAs or Service Level Agreements) has been attained by a supplier or business partner. Design to cost accuracy (117) Actual product or service cost divided by the cost estimated for it at the beginning of its design stage. Inventory / BOM accuracy & adjustments (111) Accuracy of the book inventory versus the actual counted inventory (e.g. as counted via Cycle Counting / Perpetual Inventory techniques) and the volume of the adjustment(s), including BOM / configuration control corrections, required to bring book inventory levels back into line with actual inventory levels. IT availability % (119) The general formula for IT availability is Availability = [MTBF/(MTBF+MTTR)] x 100. Availability (expressed as a percentage) is a function of the total service time, the mean time between failure (MTBF), and the mean time to repair (MTTR). Number of (major) internal control breaches (121) The total number of significant or material violations of internal controls in a given time period (e.g. month, quarter, year). Revision: v1.05 Page: 27 of 59

28 Percentage of problem suppliers (114) The number of suppliers with which there are significant issues divided by the total number of suppliers in the tiered supplier base of an organisation. Production material shortages / Production material outages (110) The number of instances in a given time period (e.g. week, month, year) that a shortage or outage of materials, components or assemblies caused a change to existing production plans. Timeliness in submission of statutory returns (120) Number of instances in a given time period (e.g. month, quarter, year) wherein statutory returns are not submitted within the prescribed time. Yield rate / Scrap rate / Rework rate / Reject rate / Error rate / NRFT rate (109) Yield Rate = the actual number of units of output that an operational activity or process produces as divided by the theoretical maximum output for that activity or process expressed as a percentage. Scrap Rate = the number of defective items that must be scrapped produced by a process divided by the total number of items produced by that process in a given time period (e.g. hour, shift, day, week) expressed as a percentage. Rework Rate = the number of defective items that must be reworked produced by a process divided by the total number of items produced by that process in a given time period (e.g. hour, shift, day, week) expressed as a percentage. Reject Rate = the number of defective items that must be rejected pending rework or scrapping produced by a process divided by the total number of items produced by that process in a given time period (e.g. hour, shift, day, week) expressed as a percentage. Error Rate = the number of errors of any kind made in the production of items in a given time period (e.g. hour, shift, day, week).although these do not always impact Yield, Scrap, Rework or Reject rates as some error types do not always affect the acceptability of an item expressed as a percentage. Revision: v1.05 Page: 28 of 59

29 Not Right First Time (NRFT) Rate = this is a general measure of the rate of defective units being produced. The higher it goes, the greater the waste of resources and the greater the risk that customers will be inconvenienced. Revision: v1.05 Page: 29 of 59

30 Customer View Measures how do our customers see us? Good practice metrics included in the balanced scorecard customer view include: Product & Service Offerings Related % sales from new products and services (24) The percentage of total sales derived from the introduction of new products or services in a given time period (e.g. month, quarter, year). Average product / service price (22) Average sales price of items sold within a given measurement period (e.g. month, quarter, year). New products and services introduced per annum (21) The total number of new products or services introduced in a given year. Number of new product and service failures per annum (23) The total number of new products or services introduced in a given year that are deemed to have failed in the marketplace and which have usually been withdrawn as a consequence. Delivery Performance Related On time shipment rate (27) The number of shipments that have been despatched and delivered on time divided by the total number of shipments despatched and delivered in a given time period (e.g. month, quarter, year). Order fill rate / Inventory stockout rate (26) Order Fill Rate = the number of items ordered compared with items shipped. Order fill rate can be calculated on a line item, SKU, bulk (e.g. case, pallet) or value basis. Inventory Stockout Rate = the number of items not available in inventory compared with the total number of items desired to be picked from inventory. Revision: v1.05 Page: 30 of 59

31 Order lead time / Order cycle time (29) Order Lead Time = the minimum amount of time in which an order can be filled; aka Order Cycle Time. Order processing time / Order placement response time (28) The average amount of time it takes to receive, process and either accept or decline an order in response to it being placed; aka Order Placement Response Time. Perfect order performance (25) The error-free rate of each key stage of an order. Error rates are captured at each stage (i.e. order entry, correct quantity of the right item(s) picked, on-time delivery, shipped without damage, invoiced correctly) and multiplied together. Customer Service Related % of customers given satisfaction surveys (31) The number of customers given satisfaction surveys to complete divided by the total number of customers served in a given time period (e.g. month, quarter, year)..expressed as a percentage. % of returning customers (37) The number of customers who make a repeat purchase divided by the total number of customers served in a given time period (e.g. month, quarter, year)..expressed as a percentage. Average response time to resolve customer complaints (36) The average amount of time an organisations staff, often in a customer service function, takes to satisfactorily resolve a customer complaint. Customer churn rate / Customer loyalty rate (30) Customer Churn Rate = the number of customers who decide to switch to another product or service provider in a given timeframe (e.g. month, quarter, year) divided by the total number of customers on the books of the organisation during that period; aka Customer Loyalty Rate. Revision: v1.05 Page: 31 of 59

32 Customer satisfaction index (32) A trend plot showing levels of customer satisfaction over time based on customer feedback. The feedback data is often collected as part of customer surveys or via self-completion forms returned by customers. First contact customer issue resolution rate (35) The number of customer issues resolved by customer service staff on the first contact attempt by a customer divided by the total number of customer contacts made regarding issues in a given time period (e.g. month, quarter, year). Number of customer complaints / Number of customer returns (34) Number of Customer Complaints = The total number of complaints made by customers in a given time period (e.g. month, quarter, year). Number of Customer Returns = The total number of ordered items returned by customers in a given time period (e.g. month, quarter, year). Number of satisfied customers (33) The total number of customers who have reported themselves as being satisfied with a product or service in a given time period (e.g. month, quarter, year) Corporate Social Responsibility (CSR) Related % of obsolete / defunct material recycled (124) The amount of material from obsolete parts and defunct equipment that can be salvaged and recycled divided by the total amount of that type of material being processed in a given time period (e.g. month, quarter, year). CO2 tons per employee (39) A measure of how much carbon dioxide is created and how much we contribute to climate change. This metric has been introduced in order to a) measure the energy usage in terms of the tons of CO2 produced by the business, b) to set relevant goals and c) to help reduce CO2 output. Revision: v1.05 Page: 32 of 59

33 Number of accidental releases of controlled or monitored substances (38) The number of significant or severe spills of liquids or other accidental releases of controlled or monitored substances. Number of repeated compliance audit failure findings (41) Number of compliance audit failure findings repeated during the year in the same organisation including those occurring at different sites. Environment, Health & Safety (EH&S) audit scores (40) A measure of environment, health and safety performance against a given audit conducted on that topic. Revision: v1.05 Page: 33 of 59

34 People & Learning View Measures how well do we develop our people and adopt new knowledge? Good practice metrics included in the balanced scorecard people view include: Work Habits Related Absenteeism rate / Tardiness rate (42) Absenteeism Rate = the number of man-days lost due to absenteeism divided by the total number of man-days calendared for work in a given time period (e.g. month, quarter, year). Tardiness Rate = the number of instances of man-days in which an employee or contractor reports for work late divided by the total number of man-days calendared for work in a given time period (e.g. month, quarter, year). Number of times work was stopped due to an unplanned, unsafe condition (45) The total recorded number of reported instances of unplanned work stoppages in an organisation due to unsafe conditions in a given period (e.g. year). This is a quantitative indicator of less than adequate pre-job hazard evaluation and controls. Number of violations of safety rules (44) The total recorded number of reported instances of safety rule violations in an organisation in a given time period (e.g. year). Number of visits to the dispensary / Number of first aid treatments (43) Number of Visits to the Dispensary = the total number of employee or contractor visits to the dispensary in a given time period (e.g. month, quarter, year). Number of First Aid Treatments = the total number of employee or contractor receiving first aid treatments in a given time period (e.g. month, quarter, year). Revision: v1.05 Page: 34 of 59

35 Work Climate Related % of new hire retention (52) Percentage of new hires still retained after a certain period (e.g. 12 months). This is the number of new hires that still work for the company versus the total number of new hires made during that period. Average tenure per employee (53) The cumulative tenure of all employees (e.g. in years) divided by the number of employees. Cycle time from job acceptance until job start / Average time to recruit (51) Cycle Time from Job Acceptance until Job Start = the time (e.g. in days) from job acceptance until new hire begins work in the agreed position. Average Time to Recruit = the average time it takes from having a job opening to filling the open position. Employee job satisfaction index (49) The job satisfaction score trend of employees as measured by periodic surveys. Employee turnover rate / Employee request for transfer rate (50) Employee Turnover Rate = the number of employee departures (in FTEs) divided by the average number of staff members (in FTEs) employed. Employee Request for Transfer Rate = the number of employee requests for transfers (in FTEs) divided by the average number of staff members (in FTEs) employed. Number of employee complaints (48) The total number of employee complaints received within the measurement period. Number of grievances filed / Number of discriminations filed (47) Number of Grievances Filed = the total number of employee grievances filed within the measurement period. Revision: v1.05 Page: 35 of 59

36 Number of Discriminations Filed = the total number of cases of alleged discrimination filed by employees within the measurement period. Organisation s litigation rate (46) The average number of litigation cases the organisation is involved in during the measurement period. Workforce Development / Advancement Related % of new ideas from outside the organisation (58) The percentage of new ideas sourced from outside the organisation (e.g. from suppliers, business partners, customers, etc). Average number of training hours per employee (57) The total number of training hours delivered divided by the number of employees (in FTEs). Average performance appraisal rating (60) The average performance appraisal score rating awarded to employees in a given measurement period (e.g. year). Lessons learned adoption rate (59) The average number of lessons learned that have been seriously taken up by the organisation and enshrined in policy, working practice and training over a given measurement period. Number of promotions / Number of pay increases (54) Number of Promotions = the total number of promotions awarded to employees in a given measurement period. Number of pay increases = the total number of pay increases awarded to employees in a given measurement period. Number of training programmes attended (55) The total number of training programmes attended by employees in a given measurement period. Revision: v1.05 Page: 36 of 59

37 Rate of increase in employee job performance (61) The trend rate of increase (decrease) in employee job performance over a specified measurement period. The information is often sourced from aggregated employee performance appraisal data. Training penetration rate (56) Measures the percentage of employees successfully completing a course or a content area of training compared to the total number of employees employed. Revision: v1.05 Page: 37 of 59

38 APPENDIX 1 Business Metrics by Process Area Revision: v1.05 Page: 38 of 59