A Practical example of Creating KPI Trees

If you're struggling to understand how to build a meaningful KPI tree or wondering how to link specific metrics to strategic goals, this video is for you. In this tutorial, I walk you through the process of creating a KPI tree, explaining how to structure your KPIs from the bottom up. The goal is to align operational metrics with higher-level strategic indicators, ensuring that every part of your organisation is focused on improving key performance areas, like lead time, cycle time, and customer satisfaction. A KPI tree helps you break down complex performance indicators into more manageable, department-specific metrics. By starting with the overall strategic goals, such as improving customer satisfaction or increasing capital turnover, you can then trace down to the relevant departmental KPIs, such as cycle times or work-in-progress inventory. The key is to create a tree that is tailored to your organisation’s needs, making sure that each level of management has clear, actionable indicators that help drive performance improvements without overwhelming them with irrelevant data. This method ensures that every team in your organisation is focused on the right metrics. For example, rather than tracking overall lead time at the corporate level, you can track more specific sub-metrics, such as cycle time and inventory levels, within each department or product family. These more granular metrics are easier for teams to influence directly, and they feed into the broader performance indicators that matter to senior management. This approach streamlines your performance tracking and allows for more targeted improvements in every area of your operation. #continuousimprovement #KPI #operationalexcellence https://www.youtube.com/watch?v=1iV_IpQHnv8 Chapter Titles 00:00 Introduction to KPI Trees 01:12 Building KPIs from the Bottom Up 03:31 Defining Key Metrics for Lead Time 05:03 Creating Sub-KPIs for Departments 07:00 Tailoring KPIs to Specific Operations 10:15 How to Link KPIs to Strategic Goals Interested in working with me to boost Operational Excellence in your organisation, or perhaps a more personal coaching on your CI career? Check out my website for details or go to my contacts page directly (www.tommentink.com/contact)