KPI

Key Performance Indicators (KPIs)

Key Performance Indicators (KPIs) are target rates for levels of continuous performance. They monitor, by the measurement of fixed agreed processes (actions being performed in connection with efforts to achieve a desired result) and outcomes, in order to enhance and maintain good performance.

As such, they define and articulate the expectations for a contribution to the supply chain. They require an organisation, group or sector to achieve a predefined consistent level of good performance.

When applied to a specific organisation, persistent or serious failure to achieve the levels can often lead to a financial penalty and ultimately the loss of all or part of an agreement covering the part of the relevant process.

If applied to groups of organisations within a supply chain or a whole sector, the penalty is usually ‘naming and shaming’ which causes the guilty party to review its processes and procedures in order to raise the standard of performance.

The Industry Benchmarking Group is responsible for the day-to-day development of KPIs. The Group has defined its mission statement as ‘To maximise sales and reduce waste through monitoring’.