FIT Home The FIT-Herlyn KPI Analysis and Advisement
Basic Premises
An organization needs a measure to ensure that it is pursuing strategies and actions that will enable the organization or company to achieve its goals and obtain rewards for having met those goals. Measurement and evaluation of performance are at the very heart of the organization. The skill by which the measures are built and executed will make the difference between a growing, dynamic environment and one that follows.

What, first, do skilled executives observe? This answer is very basic:

ØWhat has happened?
ØWhy has it happened?
ØIs it going to continue?
ØWhat needs to be done about it?

The first question can be answered by performance measurement. The next three, however, require more in-depth knowledge of the workings or the organization itself and a lot of information. The FIT-Herlyn KPI analysis and advisement process focuses on reducing the amount of data processing to be done before proposing action. What is reported to management for performance measurement should enrich the process.

Opportunity
We offer to provide a best practices set of KPIs as experienced successfully in other plants. These KPIs link to the lowest level of control of the profit margin, as reported to the executives. Our methodology for KPI tree set-up is very powerful and ensures consistent linkage throughout the company's business processes and is well suitable for benchmarking relative to competitive data, such as Solomon in refining. Areas that we specifically address: production, production reliability, energy, maintenance, engineering and projects, environmental management, health and safety management consistent with European or US standards, etc. Activity based management principles are being considered to drive the cost to optimum.

KPI Standards Performance indicators are statements of the performance expectations or requirements necessary for achieving the critical results of the position. They clearly communicate to employees what has to be done and how it has to be done. The criteria for effective PI standards are:
ØFocusing Linked to the profit margin
ØDifferentiating to targets
ØObservable by those that need it
ØConsistent with reconciled and quality data
ØAchievable and therefore credible
ØMeasurable preferably automated
ØWithin employee's control for continuous improvement
ØClearly stated to the point
ØAdequate to fit the purpose
Business Model and Applications
Generally, the structure used to present the PI's is based on the business model; however, there are a few indicators that cross business functions and serve management as the key business performance measures. All others are used to measure the function results and to 'drill-down' for the root causes of deviations.

The key indicators for the entire sites' area performance represent an overview for the senior management team as well as for the site members. The PIs can be part of the balanced scorecard information available on the network to everyone. Throughput, recovery, energy and cost related PIs 'dominate' the rest. Production is a result of the teamwork of many people and groups that are part of operations and of services to operations. Site performance is measured in 'maximizing capacity utilization at minimum cost'.1

What Is the Value?
Company growth can only happen through monitored and measured improvement and change, always with an eye to impact on the bottom line. We look to guide our clients toward improved business processes measurement, optimizing organizational efficiency and productivity, and gaining maximum return from investment. FIT specializes in assisting process industry and manufacturing clients with business KPI measurement changes that can have a positive impact on profitability and position in the world market. We look forward to the opportunity to assist your organization.


1 From 'Executive Reporting Opportunities for the Hydrocarbon Industry,'
by Folkert Herlyn, 23 September 99
© copyright Facilitated Integration Technology, 30/09/02

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