When you select the best key performance indicators (KPI) for your organization, you can find ways to reduce downtime and boost revenue. By limiting yourself to only the most important KPIs, you aim for world-class performance. But that's easier said than done in the real world.
When the food giant McCormick needed a way to track what was going on, there was no time to come up with key performance indicators--there was only enough time to get critical tasks done before even more critical tasks showed up. The City of Deerfield Beach needed a hygiene and safety process for the city’s water supply, and they needed it quickly. Metrics and achievable KPI benchmarks became of paramount importance, and they had no time for clumsy software or paper trails.
Here is UpKeep's guide to the key metrics that are critical for any facility to identify, and how to tie them to your company's business objectives. You'll find out what a maintenance KPI is, how they're chosen, key maintenance KPIs to consider, and how to track KPIs with a computerized maintenance management system (CMMS).
What is a Maintenance KPI?
The shortest definition of a maintenance KPI is that it’s a measurement of the performance of particular tasks, systems, teams, or individuals. When companies set attainable maintenance KPIs, they can increase your production, reduce costs, improve safety, and boost efficiency.
KPIs and metrics are similar, as they both measure your company’s performance against particular goals. Both look at current performance or measures, establish ideal levels for the future, and work toward those goals. The major difference is that metrics are a measurement of progress towards a goal. KPIs are target numbers to hit.
This difference can be seen in their names. KPI stands for key performance indicators, while a metric, by definition, means a system or standard of measurement. The distinction is very important: you don’t want to mix up the roadmap with the destination.
Finally, maintenance KPIs are some of the most important indicators of whether or not your company can accomplish its overall mission. Metrics do track data, but they are not as critical as KPIs in the big picture of overall performance.
Now that we’ve covered what a KPI is and what it offers companies, how do you choose the best KPIs for your company's needs? How do you separate them from your company's metrics? And how are they best utilized in the overall framework of a company? Here's what you need to know.
How to Choose Your KPIs
Perhaps the most important factor in selecting KPIs is the sheer number that is available to companies today. There are many different ways to measure success and there is a KPI for each one of them. This can get very confusing, particularly if the company's goals and strategy are not well-defined.
Since they are the keys to measuring success, companies should center their attention on five KPIs or fewer if possible. All your KPIs should be extremely focused in order to be effective and should circle around your overall company goals.
It's easy to say that these benchmarks should be extremely focused, but what does that look like? Where should companies focus? Does it change over time? And where should this whole process start?
Where You Should Focus
When a company creates quality KPI benchmarks, they should focus on three major areas:
- Long-term growth
To start this process, consider the factors that you want to improve the most in your business. This will be unique to your organization. One company may want to speed up its production line by 50 percent, while another firm may wish to cut its delivery time by one-third. These are all improvements that can be tracked and worked towards over time.
As with any goal-setting, you must always return to your overall business strategy. A startup company in its second year will have different growth goals than a well-established manufacturer. Set your KPIs accordingly, whether that be supporting rapid growth in the next five years or a more steady year-to-year growth trajectory.
Finally, speed isn't everything. Besides looking at the speed of your business growth, you’ll also want your KPIs to support the long-term sustainability of your company. Benchmarks that you could look at include foundational things such as infrastructure building progress, long-term plans, and the viability over time of your standard operating procedures.
In general, your goals are going to be very different from company to company because all companies have different aims. Your KPIs are also going to change over time. Given this information, what are some benchmarks that you can think of that focus on these three goals for your company?
Important Things to Remember About Setting Your KPIs
During the creation process, there are two important things to remember that many companies forget. It's important to consult with your managers and to keep to the five KPI limit. Why?
Consult with Managers
Maintenance managers are on the front lines and will have real-life experience on your business’ most pressing problems. Be sure to consult with them, listening to their pain points, suggestions, and overall insights before you decide on a course of action.
The Five KPI Limit
At any one time, you will want to have no more than five KPIs. Remember, these are your top priorities. If you create too many, they will simply become metrics and you will dilute your resources.
As you meet your KPIs, you can replace them with new ones. It’s a growing and evolving process for your company and your company’s goals.
Now, let’s take a look at different maintenance-oriented KPIs and what they offer companies today.
11 Maintenance KPIs to Consider
The best KPIs to begin with involve minimizing repair times, increasing effectiveness and reducing costs. Here are nearly a dozen possible KPIs for your company to consider and explore.
Remember, select no more than five at a time.
1. Equipment Downtime
There are two basic ways to look at equipment downtime. The first is to consider how often your assets are unavailable due to emergency breakdowns. The second is to measure how often an asset is actually available to do the work it’s intended to do.
Measuring one or both of these factors can serve as valuable KPIs. Consider that world-class unscheduled downtime is considered less than 10 percent, while asset availability is greater than 90 percent. These statistics can serve as valuable guideposts for your equipment downtime KPI.
2. Maintenance Backlog
Look at how many pending work orders you have available in your system. This can help you determine if you have appropriate staffing. On the one hand, if you have no backlog, you probably have too many maintenance technicians. The opposite is also true: extensive maintenance backlog may mean you’re understaffed.
The world-class metric recommended is about two weeks’ worth of work per technician. What’s a KPI that you can commit to in order to leverage that metic?
3. Mean Time Between Failure (MTBF)
This KPI looks at a particular asset, records the time between each equipment failure, and averages those measurements. Each company should evaluate a critical asset independently and determine a reasonable goal for increasing its MFBF.
4. Mean Time to Repair (MTR)
Similar to the MTBF, this KPI evaluates the time from the moment of failure through the actual repair. It takes into account diagnosis, planning, scheduling and the actual work required. By using this metric, a company may be able to identify inefficiencies in the process.
Once those inefficiencies are addressed, a reduction in MTR can illustrate an immediate result.
5. Overall Equipment Effectiveness (OEE)
This KPI looks at a facility’s overall performance. OEE is based on the availability of equipment, the efficiency of its overall performance, and the level of quality in final products. Often, other metrics must play into this measurement.
World-class levels are set at 77 percent OEE or greater. What’s your OEE?
6. Planned Maintenance Percentage (PMP)
Planned maintenance is always less expensive and less disruptive than emergency maintenance. This metric measures how much of your total maintenance are planned tasks. To calculate this measurement, take the number of planned maintenance hours and divide it by your total maintenance hours in a specific period of time.
See how you compare to world-class facilities who hold a PMP of 85 percent or more.
This KPI looks at the percentage of time that an organization successfully completes a scheduled work order. If ensuring that your scheduled maintenance process is running at an optimal level is key to your organization’s mission, this can be a good metric to employ.
World-class standards sit at 90 percent or greater for schedule compliance.
8. Maintenance Cost as Percent of RAV
RAV stands for replacement asset value. This metric illustrates how cost-effectively your maintenance program operates. World-class companies can keep this value around one percent.
Remember that metrics aren’t KPIs. What’s a performance indicator that would measure maintenance cost as a percent of RAV?
9. Average Days to Complete Work Orders
At a basic level, the faster a maintenance crew can complete work orders, the more efficient it may seem. However, you have to be cautious with this metric as you don’t want maintenance technicians to be sloppy for the sake of speed. Consider using this metric with failure KPIs to protect against this potential issue.
10. Percentage of Work Covered by Work Order
This KPI helps a maintenance team determine how much of your maintenance work is getting entered into your computer system. This is critical as the collected data can provide the basis for future important decision-making efforts.
You want to shoot for 100 percent here. However, KPIs need to be reasonable. A hundred percent may not work for your company at this point in time. What's a number that would?
11. Maintenance Overtime
Similar to measuring your maintenance backlog, a KPI that looks at overtime can help you set the right level of labor for your organization. Incurring some overtime, especially in special situations, is acceptable.
However, constant significant overtime will lead to technician burnout and higher costs. World-class levels are around 5 percent. Do you have a metric for your maintenance overtime or records showing a negative trend? What can you do to change that pattern?
How to Track Your KPIs
Today’s technology allows simple tracking of KPIs. An effective tracking system will help you gain an ongoing overview of your costs as well as reduce asset downtimes. There are two main ways of tracking KPIs: over time and by how well they minimize downtime.
Tracking over Time
When you use UpKeep or another free CMMS software to help track your maintenance KPIs over time, tracking over time can be as easy as 1,2,3. UpKeep, in particular, makes the process intuitive with its easy-to-use graphic interface. You can select custom reports and see key indicators at a glance on the product’s dashboard.
If you want to go deeper, it’s simple to set up reports and graphs to check on your ongoing costs. Once you define your KPIs and train your staff to enter cost-related data into your CMMS, it’s simple to aggregate this information into simple reports. Take a look at your progress as often as you’d like.
How to Minimize Asset Downtime
Once maintenance technicians are used to entering all their activities into the new CMMS, you have a wealth of historic information on asset performance. As a result, it’s easy to see the level of downtime for a particular asset, modify maintenance tasks, and then check to see if those tasks had a positive effect through the KPI dashboard.
How to Tie Your KPIs to Organizational Objectives
We talked a lot about the theory of KPIs, but how do companies tie them to organizational objectives? What does it look like in practice?
The short answer is that organizational objectives can very easily interface KPIs and vice versa. Organizational objectives are long and short-term goals for the company as a whole. KPIs are key performance indicators. This means that KPIs can show a company how they're doing on their organizational objectives and organizational objectives can show which KPIs to focus on.
However, this is highly dependent on your CMMS system. Here's how the right CMMS incorporates all of these numbers, measurements, and data into a system
Using a CMMS to track maintenance KPIs
To see how this all pulls together, here are two examples of companies that tracked their metrics and key KPIs through UpKeep's CMMS system, for example. These companies have very different goals and needs. However, a great tracking system can accomplish all sorts of goals, track many different metrics, and help companies achieve their dreams.
Case study: McCormick reduces reactive maintenance up to 60%
The maintenance team at McCormick is a great example of how a group of people came together to set common goals to tackle challenges faced by their business. They needed a way to track what was going on and they needed it fast. There wasn't any time to come up with key performance indicators or to watch their metrics--there was only enough time to complete critical tasks before more others showed up.
UpKeep's CMMS system enabled McCormick to offload many minor tasks into a central database that automatically kept track of them. The simple change reduced the McCormick plant downtime significantly, as employees did not have to keep track of things such as part life cycles. Their yearly audit became streamlined and they were able to create appropriate KPIs and metrics to measure their process over time.
The McCormick story is a great example of how freeing your company from the small details can enable you to look at the larger picture. By keeping track of downtime and increasing planned maintenance percentage, the team was able to show how their individual efforts translated into cost savings for their company in the long-term.
Case study: The city of Deerfield Beach reduces corrective maintenance costs
The City of Deerfield Beach faced a very different situation. They needed a hygiene and safety process for an entire city’s water supply and they needed it quickly. Metrics and achievable KPI benchmarks became of paramount importance. Instead of clumsy software or paper trails, UpKeep offered a streamlined platform to make the process easier for everyone. By increasing schedule compliance, the maintenance team in Deerfield Beach were able to measure their success in money saved for their company.
While the goals in both of these situations were very different, their needs were very much the same. Both companies needed a streamlined solution.
How Does Your Company Measure Up?
KPIs are the critical measuring sticks to help keep your facility up and running and operating efficiently. By selecting a handful of key indicators, your management team can make changes and measure their effectiveness.
When you focus on your most important assets and processes, it makes a big, positive difference to your bottom line. And that's what every company wants.
This story was last updated in February 2020 with more detail and examples.