Process indicators are a subset of the more familiar metrics known as key performance indicators (KPIs). These indicators measure the performance of a company's processes, focusing specifically on them to help those responsible for them to move towards excellence, minimising errors, defects and inefficiencies.
While KPIs are the broader, strategic level measures, process indicators work at the operational level.
While process indicators can be as granular as necessary to monitor processes in the organisation., There are some that could be applied across the board to all companies. Those who want to keep track of their company's performance should track these indicators:
It shows the relationship between actual process results and expected process results. While there is no unifying equation by which this metric can be assessed, there are certainly ways to obtain a measurement. It is obtained by combining three specific process indicators:
Once the results are obtained, it is best to compare them with the expected results of the process, which are usually calculated as part of a business process management (BPM) model. The relationship is then the effectiveness of that process.
Efficiency is the relationship between the results obtained by a process and the resources consumed in that process. In other words, it is a measure of how much material/input expenditure went into a given amount of output. It can usually be calculated with a simple formula:
Value added time / total delivery time
In this formula, value-added time is the time spent producing the product, while total delivery time is the total time from the beginning to the end of the process, also known as «processing time». Production time takes into account time spent waiting for materials, machinery downtime and other production delays. This metric gives a better idea of the amount of waste involved in each production cycle, allowing waste to be found and reduced.
Process compliance as a process indicator focuses on both internal and external compliance. Internally, the percentage of non-conforming products produced should be monitored. By tracking this metric and the processes responsible, you can gain insight into the possible causes of incorrect results and begin to improve this metric. Externally, monitoring process compliance will help track the facility's compliance and its compliance with applicable regulations. In this way, the company protects itself from fines or other censure due to non-compliance.
It represents the total amount of time it takes to run a given process: from when it starts, through each step of the process, and finally until the finished product is ready for the customer. On a production line, this would involve tracking the journey from raw materials being taken from the warehouse, along the production line and to the shipping department when the product is ready for the customer. In a customer service process, This would be seen as the customer request being received, through to the technician or specialist working on the issue, through to the resolution and finally resulting in a satisfied customer as the outcome of all the work. It is also one of the factors involved in measuring the overall effectiveness and efficiency of the process.
It is the last of the key process indicators for any company. It allows to find out whether the quality of products or services is high enough to meet customer standards. and at the same time comply with internal quality control and budgetary guidelines. In manufacturing, it is relatively easy to calculate as the ratio of non-conforming units to total units produced. In other industries it will look a little different. In consulting, it could be the number of accepted versus rejected proposals. In the cloud services sector, it might depend on the number of contracts that need to be modified and/or re-signed before work can start, compared to those that are accepted as-is.
In any case, we know that what cannot be measured is difficult to control and, for that reason, it is advisable to start working with process indicators. And if you want to get more aspects of your business under control, sign up for flexible remuneration which, in addition to incorporating social benefits, allows you to make use of solutions that facilitate recovering VAT on meals easily and without the need to keep the receipts (this is the case of Ticket Restaurant).
