All 27 parameters of the motivational system are divided into six categories:
Posted: Wed Jan 22, 2025 4:17 am
KPI for the overall supply process without taking into account the stages.
KPIs for preparing procurement plans.
KPI for determining the supplier-provider.
KPIs for drafting contracts with contractors.
KPI for the implementation of transport and warehouse operations.
KPIs for analysis, management and control of business processes.
Let us clarify that the twitter database application of the KPI motivation system at the enterprise will be effective only if all employees understand the extent of their responsibility when working in the field of material and technical supply. In order for this area to function without failures, it is necessary to regulate the following processes: determining the production need for materials, drawing up procurement plans, selecting providers, documenting work with suppliers, organizing the implementation of transport and warehouse operations.
In addition, the process of analysis, control and improvement of business processes must be regulated in detail. To solve this problem, it is necessary to develop the following regulations: a provision on the procedure for creating a KPI system, a list of parameters, distribution of indicators among employees, calculation instructions, assessment analysis methods, guidelines for calculating and presenting results. The formed package of documents and also a collection of standards are approved by the head of the supply department, agreed upon with the accounting department, the HR department and the planning department. After which it is submitted to the company's management.
The logistics department also needs an analytical section, whose employees are engaged in developing KPI standards and calculating deviations.
Based on the results of the motivation system, documentation is generated for presentation to the company's management. These reports contain the values of all parameters and deviations from standards, summarized in a table. For clarity, diagrams and graphs are often used. When a deviation of 5% is reached, an analytical report on the reasons is provided. Mathematical calculation of the parameter values and the results obtained, expressed in absolute and relative values, gives an objective picture of the state of the management system.
How to automate a motivation system? At the first stage, the required methods are designed. The tools (for example, in spreadsheets) are developed to perform the necessary calculations. The working group includes specialists in the use of software. At the second stage, a set of the most informative indicators is formed from a set of indicators in accordance with the previously developed instructions, and then, in fact, the necessary calculations are made and reporting documentation is created containing assessments of the work of individual employees.
Salary of the head of the supply department
After the first cycle of pilot operation of the system, amendments can be made to the regulations. At the next stage, the remaining parameters that were not previously taken into account are automated. The system debugging is considered complete, and it begins to operate in the normal mode. The preparation of reports for the employer and the process of assessing the personnel of the department can also be automated. Almost all ERP systems have the functionality necessary for these operations.
Let's list the most frequently made mistakes when using the KPI system:
Lack of preliminary analysis of business processes. This significantly reduces the effectiveness of the KPI method.
Inconsistency of actions. Often the employer gives the task of designing the system to different structural divisions. In this case, a large number of parameters are used that do not have a stable connection with each other. Their processing leads to inadequate results and the creation of a large number of contradictory reports. It is unlikely that one can then count on the system's compliance with the company's overall strategy.
Shortcomings in the calculation methodology. A typical mistake is the implementation of the KPI system without clear instructions. Not only is manual processing of information very labor-intensive, but the obtained analysis results can hardly be called correct.
An integrated approach to designing and implementing a KPI motivation system will help avoid mistakes and achieve maximum effect. It is simply necessary to approach each stage responsibly – from creating regulations to final automation of the process.
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
KPIs for preparing procurement plans.
KPI for determining the supplier-provider.
KPIs for drafting contracts with contractors.
KPI for the implementation of transport and warehouse operations.
KPIs for analysis, management and control of business processes.
Let us clarify that the twitter database application of the KPI motivation system at the enterprise will be effective only if all employees understand the extent of their responsibility when working in the field of material and technical supply. In order for this area to function without failures, it is necessary to regulate the following processes: determining the production need for materials, drawing up procurement plans, selecting providers, documenting work with suppliers, organizing the implementation of transport and warehouse operations.
In addition, the process of analysis, control and improvement of business processes must be regulated in detail. To solve this problem, it is necessary to develop the following regulations: a provision on the procedure for creating a KPI system, a list of parameters, distribution of indicators among employees, calculation instructions, assessment analysis methods, guidelines for calculating and presenting results. The formed package of documents and also a collection of standards are approved by the head of the supply department, agreed upon with the accounting department, the HR department and the planning department. After which it is submitted to the company's management.
The logistics department also needs an analytical section, whose employees are engaged in developing KPI standards and calculating deviations.
Based on the results of the motivation system, documentation is generated for presentation to the company's management. These reports contain the values of all parameters and deviations from standards, summarized in a table. For clarity, diagrams and graphs are often used. When a deviation of 5% is reached, an analytical report on the reasons is provided. Mathematical calculation of the parameter values and the results obtained, expressed in absolute and relative values, gives an objective picture of the state of the management system.
How to automate a motivation system? At the first stage, the required methods are designed. The tools (for example, in spreadsheets) are developed to perform the necessary calculations. The working group includes specialists in the use of software. At the second stage, a set of the most informative indicators is formed from a set of indicators in accordance with the previously developed instructions, and then, in fact, the necessary calculations are made and reporting documentation is created containing assessments of the work of individual employees.
Salary of the head of the supply department
After the first cycle of pilot operation of the system, amendments can be made to the regulations. At the next stage, the remaining parameters that were not previously taken into account are automated. The system debugging is considered complete, and it begins to operate in the normal mode. The preparation of reports for the employer and the process of assessing the personnel of the department can also be automated. Almost all ERP systems have the functionality necessary for these operations.
Let's list the most frequently made mistakes when using the KPI system:
Lack of preliminary analysis of business processes. This significantly reduces the effectiveness of the KPI method.
Inconsistency of actions. Often the employer gives the task of designing the system to different structural divisions. In this case, a large number of parameters are used that do not have a stable connection with each other. Their processing leads to inadequate results and the creation of a large number of contradictory reports. It is unlikely that one can then count on the system's compliance with the company's overall strategy.
Shortcomings in the calculation methodology. A typical mistake is the implementation of the KPI system without clear instructions. Not only is manual processing of information very labor-intensive, but the obtained analysis results can hardly be called correct.
An integrated approach to designing and implementing a KPI motivation system will help avoid mistakes and achieve maximum effect. It is simply necessary to approach each stage responsibly – from creating regulations to final automation of the process.
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients