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Effective Enterprise Key Performance Indicators

Key Performance Indicators

To better assist you in measuring the efficiency of your business processes, QAD has developed a suite of performance indicators, which we call: QAD Effective Enterprise Key Performance Indicators (KPIs). QAD KPIs focus on the main areas of performance that manufacturers need to measure to ensure businesses are working at peak efficiency. With QAD KPIs, QAD provides a single suite of indicators, which may leverage elements from many existing metrics you currently measure.

QAD KPIs consists of 10 high-level KPIs. Each high-level KPI is a summarized composite measure from comprehensive sets of underlying metrics, or secondary metrics. Lower-level business processes and practices affect each of these secondary metrics.

For each of the underlying business processes, QAD has defined best practices that support them. We have mapped these best practices to the QAD functionality that supports them within QAD Enterprise Applications.

  • Customer Service: a measurement that reflects the effectiveness of Sales, Delivery, and After Sale performance. Customer Service ultimately determines the ability to grow and/or retain customers and revenue, with the associated enablers that result in reduced costs and lead times, minimized waste, and improved asset utilization.
  • Supplier Performance: an indicator that evaluates performance of suppliers, usually against a set of metrics that cover areas such as: the relative cost of products, quality of products against agreed specifications, engineering, and purchasing, based on an agreed set of measurements to drive continuous improvement in value and operations.
  • Manufacturing Efficiency: a measurement (usually expressed as a percentage) of the actual output to the standard output expected. Efficiency measures how well something is performing relative to existing standards. In contrast, productivity measures output relative to a specific input (e.g., tons/labor hour).
  • Manufacturing Schedule: a measure of the accuracy of a manufacturing schedule against requirements (i.e., how well you are scheduling to build the right thing at the right time in the right quantity).
  • Information Technology (IT) Effectiveness: a combination of two key attributes: efficiency of IT operations (Operational Efficiency) and the competitive advantage the business gains through IT-enabled solutions (IT Innovation). Operational Efficiency is measured as the cost of the deployment, management and support of IT systems in the business, at a requisite level of availability, together with the alignment of those IT systems to support business process and operational needs. IT Innovation is measured as the gains in competitive advantage an enterprise enjoys resulting from business improvements enabled by IT solutions.
  • Supply Chain Effectiveness: a measurement of how well all elements (products & services) of the supply chain—from raw materials to end-customers—are performing against the expectations set or existing standards (if available).
  • Inventory Effectiveness: measures the process of having the right part at the right place at the right time, with minimal investment that meets the customer requirements. Inventory is influenced by lead times, variability of supply, variability of demand, product complexity, service level agreements, product substitution, obsolescence and life cycles, material costs, carrying costs, investment strategies, cost of money, warehousing space and logistics (locations, distances, transportation methods).
  • Financial Compliance: ensures that all accounting transactions are treated in accordance to Generally Accepted Accounting Practices (GAAP) prevailing for the relevant country, and that all transactions are recorded accurately and can be audited. For QAD, the goal is also to ensure that Financial Compliance is delivered in the most effective and economical manner possible automating processes and embedding controls within IT systems.
  • Industry Compliance: a set of metrics associated with regulations related to the industry, geography of operation, or market that the customer serves. Typically, compliance to regulations requires that processes are deployed in a controlled and documented fashion.
  • Asset Utilization: a measure of actual use of fixed assets divided by the available use of fixed assets. The supporting processes and best practices ensure availability of the fixed assets, optimized usage of the fixed assets, minimized costs, and maximized service life.
  • Learn how our KPI expertise can help you to maximize your investment to become a more effective enterprise.

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    By Request: KPI Framework

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