CTS KPI Examples Guide

Key Performance Indicators

Examples Guide

C.T.S. Global Procurement Consultants

ABN 58 791 031 312

Contracting & Tendering Services Pty Ltd.

Level 3, 170 Greenhill Road

Parkside SA 5063

Phone + 61 8 8272 9099

Fax + 8 8272 8833

www.contractingandtenderingservices.com.au

Key Performance Indicators – Examples Guide © CTS

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Table of Contents

Introduction .................................................................................................................................................. 4

KPI Examples ................................................................................................................................................. 5

1 QUALITY ................................................................................................................................................ 5

1.1 Item Return Rates ......................................................................................................................... 5

1.2 Delivered in Full ............................................................................................................................ 5

1.3 Inventory Levels ............................................................................................................................ 5

1.4 Availability ..................................................................................................................................... 5

1.5 First Call Completion Rate ............................................................................................................. 5

1.6 Customer Satisfaction ................................................................................................................... 5

1.7 Complaint Resolution Quality ....................................................................................................... 5

1.8 Staff Retention .............................................................................................................................. 6

1.9 Staff Development / Training ........................................................................................................ 6

1.10 Quality Audit/ Inspections ............................................................................................................ 6

2 SCHEDULE & RESPONSIVENESS............................................................................................................. 6

2.1 On Time Delivery ........................................................................................................................... 6

2.2 Milestones / Deadlines Achieved .................................................................................................. 6

2.3 Responsiveness ............................................................................................................................. 6

2.4 Problems Resolved on Time .......................................................................................................... 6

3 COST/ PRICE .......................................................................................................................................... 7

3.1 Performance against Budget/ Target Price ................................................................................... 7

3.2 Price Competitiveness ................................................................................................................... 7

3.3 Discounts ....................................................................................................................................... 7

3.4 Cost Reduction .............................................................................................................................. 7

3.5 Cost Disclosure .............................................................................................................................. 7

3.6 Cost Avoidance .............................................................................................................................. 7

4 OHS & Environment .............................................................................................................................. 7

4.1 Days Away from Work .................................................................................................................. 7

4.2 Restricted Work ............................................................................................................................ 8


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4.3 Recordable Incident Rate .............................................................................................................. 8

4.4 Safety Audits/ Inspections ............................................................................................................ 8

4.5 Industrial Relations ....................................................................................................................... 8

4.6 Energy Reduction .......................................................................................................................... 8

4.7 Recycled Content .......................................................................................................................... 8

4.8 Waste Reduction ........................................................................................................................... 8

5 CONTINUOUS IMPROVEMENT .............................................................................................................. 8

5.1 Continuous Improvement Initiatives: Identified ........................................................................... 9

5.2 Continuous Improvement Initiatives: Implemented .................................................................... 9

5.3 Continuous Improvement Initiatives: Benefits Realisation .......................................................... 9

6 RISK ....................................................................................................................................................... 9

6.1 Financial Viability .......................................................................................................................... 9

6.2 Conflicts of Interest ....................................................................................................................... 9

6.3 Litigation/ Legal Proceedings ........................................................................................................ 9

6.4 Insurances ..................................................................................................................................... 9

6.5 Licenses and Accreditations .......................................................................................................... 9

7 Administration .................................................................................................................................... 10

7.1 Meeting Attendance ................................................................................................................... 10

7.2 Invoice Accuracy ......................................................................................................................... 10

7.3 Invoice Timeliness ....................................................................................................................... 10

7.4 Supporting Documentation/ Manuals ........................................................................................ 10

7.5 Reports Lodged on Time ............................................................................................................. 10


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Introduction

The following Key Performance Indicators (KPIs) are provided for example purposes only and reflect

some common indicators that may be used to measure contractor performance, but by no means

represent an exhaustive list. The purpose of providing these examples is to illustrate possible measures

that may be applicable for some procurements/ contracts and to provide examples that may be

modified and adapted to reflect specific requirements.

The grouping of indicators within a performance measurement category is subjective, i.e. there is no

standard for performance measurement categories, so for example some might argue that ‘Problems

Resolved on Time’ is an indicator of ‘Quality’ and not ‘Schedule/ Responsiveness’.

Of greater importance is that KPIs reflect the desired key outcomes and objectives for each particular

contract, and that any performance measures developed are SMART KPIs, i.e.:

• Specific - clear, concrete, well defined

• Measurable – can it be determined, and how easily can it be determined, if it has been achieved?

• Achievable - is the performance level/ target realistic and within the control of the contractor

(balance too easy and too hard, consider cost of performance)?

• Relevant – does it provide an indication of whether a key outcome or objective is being achieved?

• Timely – what is the measurement period/ frequency (how soon do we need to know if there is a

problem)?

The remainder of this document provides examples of performance measurement categories,

associated indicators of success (KPIs) and how the indicators might be measured.

In developing performance measures consideration should also be given to the following:

• How the performance data will be obtained and by whom (e.g. the buyer, the contractor or third

parties)

• What will be the required performance targets/ levels (and how will they be expressed e.g. Yes/ no,

ratios, percentages)?

• What will be the consequence for non-performance (and/or reward for performance)?

• What will be the measurement period (weekly, monthly, quarterly, annually)?

These elements will vary from contract to contract and accordingly are not contained in this guide.


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KPI Examples

Performance Measurement Category:

1 QUALITY

Indicators of how well the Goods/ Services meet the Specification,

satisfy the documented requirements and standards (‘fit for

purpose’).

Indicator (KPI) Measure

1.1 Item Return Rates (Total number of item returns) /

(Total number of items ordered) x 100

1.2 Delivered in Full

(Total number of items delivered) /


1.3 Inventory Levels (Average value of inventory held) compared with

(Target value of inventory to be held)

1.4 Availability (Total number of hours equipment or system was available) /

(Target number of hours equipment or system was required

to be available) x 100

1.5 First Call Completion Rate

(Total number of problems resolved first call) /

(Total number of calls) x 100

1.6 Customer Satisfaction

(Customer satisfaction rating of contractor against agreed

metrics e.g. quality, service) compared with

(Customer satisfaction rating target)

1.7 Complaint Resolution Quality

(Total number of complaints resolved to the customers

satisfaction) /

(Total number of complaints) x 100


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1.8 Staff Retention (Percentage of contractor employees retained ) compared

with

(Retention Target)

1.9 Staff Development / Training (Number of training days completed )

compared with

(Total training day target)

1.10 Quality Audit/ Inspections • (Number of quality audits/ inspections conducted) /

(Required number of quality audits/ inspections) x 100

• (Number of quality deficiencies identified per audit/

inspection) compared with

(Quality deficiency target)


2 SCHEDULE & RESPONSIVENESS

Indicators of timeliness, the ability to meet the time/ schedule

requirements and responsiveness to issues and problems that

may arise.


2.1 On Time Delivery

(Total number of items delivered on time) /


2.2 Milestones / Deadlines Achieved (Milestones achieved on time) /

(Total number of milestones) x 100

2.3 Responsiveness (Total number of on time responses) /

(Total number of responses required) x 100

2.4 Problems Resolved on Time (Average time taken to resolve problems) compared with

(Target time to resolve problems)


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3 COST/ PRICE

Indicators of financial performance.


3.1 Performance against Budget/

Target Price

(Total costs incurred) compared with

(Total budget or target costs)

3.2 Price Competitiveness (Price(s) paid) compared with

(Industry price benchmark(s))

3.3 Discounts (Total volume or other discounts) compared with

(Discount target)

3.4 Cost Reduction (Total savings) compared with

(Savings target)

3.5 Cost Disclosure Full cost breakdown provided on time and in manner

specified (including profit margin)

3.6 Cost Avoidance Dollars saved as a result of: Re-engineering scope,

productivity, quality or technology enhancements


4 OHS & Environment

Occupational Health, Safety: indicators of health and safety

performance in the provision of goods/ services.

Environment: indicators of environmental impact and

sustainability initiatives in the provision of goods/ services.


4.1 Days Away from Work

(Total number of days contractor’s staff missed due to

workplace injuries) compared with

(Target number of missed days due to workplace injuries)


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4.2 Restricted Work (Total number of days contractor’s staff are on restricted

duties due to workplace injuries) compared with

(Target number of days on restricted duties due to workplace

injuries)

4.3 Recordable Incident Rate (Number of recordable incidents) compared with

(Target number of recordable incidents)

4.4 Safety Audits/ Inspections • (Number of safety audits/ inspections conducted) /

(Required number of safety audits/ inspections) x 100

• (Number of safety deficiencies identified per audit/

inspection) compared with

(Safety deficiency target)

4.5 Industrial Relations

• Reporting on time of any breaches or failures to comply

with industrial relations legislation or obligations

• Reporting on time of any Industrial Relations Disputes

4.6 Energy Reduction (Energy consumption (e.g. KWH’s, MJ/hr’s, Litres)for current

period ) compared with

(Energy consumption for previous period)

4.7 Recycled Content (Percentage of recycled materials used) compared with

(Recycled material target)

4.8 Waste Reduction (Percentage of total waste (e.g. tonnes) per unit of production

during current period) /

(Percentage of total waste (e.g. tonnes) per unit of production

for previous period) x 100


5 CONTINUOUS IMPROVEMENT

Indicators of a contractor’s pro-activeness and innovation in the

provision of goods/ services.


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5.1 Continuous Improvement

Initiatives: Identified

Number of continuous improvement initiatives identified


Initiatives: Implemented

Number of continuous improvement initiatives implemented


Initiatives: Benefits Realisation

(Actual benefits realised) compared with

(Benefits realization target(s))

Note. Benefit targets may be in relation to dollar savings,

quality, productivity or technology enhancements, etc.


6 RISK

Indicators of potential threats to the contractor’s ability to

continue to effectively provide the goods/ services or of failures to

maintain required risk treatments.


6.1 Financial Viability

• Provision of specified financial statements / guarantees

• Reporting any matters affecting financial viability

6.2 Conflicts of Interest • Reporting any matters constituting actual or perceived

conflicts of interest

6.3 Litigation/ Legal Proceedings • Reporting any legal action being taken against the

contractor

6.4 Insurances • Reporting to confirm maintenance of required insurances

6.5 Licenses and Accreditations • Reporting to confirm maintenance of required licenses

and accreditations


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7 Administration

Indicators of the contractor’s performance in satisfying the

administrative requirements of the contract (as opposed to

indicators of performance in achieving the key contract outcomes

and objectives).


7.1 Meeting Attendance

(Total number of meetings attended) /

(Total number of meetings scheduled ) x 100

7.2 Invoice Accuracy (Total number of compliant invoices submitted) /

(Total number of invoices submitted) x 100

7.3 Invoice Timeliness (Total number of invoices submitted on time) /

(Total number of invoices due) x 100

7.4 Supporting Documentation/

Manuals

Supporting documentation/ manuals provided on time and in

the manner specified following acceptance/ installation/

updates

7.5 Reports Lodged on Time (Total number of reports submitted on time ) /

(Total number of reports due) x 100

Documents

CTS KPI Examples Guide