Does every objective need a number?

Not always. An objective such as "the maintenance plan for all machines is introduced before the end of the year" is also fine, as long as you can show whether it has been achieved. Where a number is possible, it does make steering easier. Choose the form that gives an honest answer to the question: are we getting there?

How often do you evaluate KPIs?

It depends on the pace of the KPI. Leading KPIs, such as inspections and actions, you check monthly or more often. Lagging KPIs, such as customer figures or consumption, are fine quarterly. Discuss the whole at least annually in the management review, and adjust objectives when the situation changes.

Which KPIs does an auditor want to see?

There is no fixed list. The auditor looks at whether your objectives fit your policy, risks and processes, whether you measure them and whether you act when they deviate. A small set of KPIs with visible follow-up is more convincing than a large dashboard that nothing is done with.

Which KPIs suit a small company?

Start with three to five, including at least one for quality, one for safety and one for the environment: for example complaints, inspections carried out and energy consumption. Use data you already have and measure manually if that fits. Expand when you notice you need more insight somewhere.

KPI examples for quality, safety and environment

Objective or KPI: what is the difference?

An objective says what you want to achieve and by when: the direction. A KPI (Key Performance Indicator) is the figure with which you measure whether you are on course. An objective can have several KPIs, and a KPI only has meaning if you know which objective it serves. Standards such as ISO 9001, 14001 and 45001 expect objectives that fit your policy and, where practicable, are measurable.

You measure a lot, but you steer on a handful. Choose two to four KPIs per theme that really say something about the objectives you have chosen; the rest stays available as background information. A dashboard with thirty figures and no direction gives a lot of noise and little steering.

How to formulate a good objective

Use SMART as a test: specific, measurable, acceptable, realistic and time-bound. Start with a baseline measurement, because without a starting point you do not know what is realistic. Give every objective an owner who can influence the result and a fixed moment at which you review. An objective that belongs to nobody will not be achieved.

An example from vague to sharp. Vague: "fewer complaints". Sharp: "the number of complaints per thousand deliveries falls this year from X to Y; the owner is the operations manager; we report every quarter." You set X and Y based on your baseline and your ambition, not on a figure from an example.

KPIs for quality

Quality KPIs show whether customers get what you promised. Look at what the customer notices: delivery time, error-free work and the way you resolve a problem. Internal figures, such as rework, show where the process falters before the customer sees it. Commonly used examples:

Number of complaints per hundred or thousand deliveries or jobs
Percentage of deliveries on time and in full
Percentage of rejected work or rework
Lead time from complaint to resolution
Customer satisfaction, for example as an average score or recommendation score
Percentage of suppliers that keep their agreements
Percentage of corrective actions completed on time

Leading or lagging: choose a mix

Lagging indicators measure outcomes that have already happened, such as the number of complaints or accidents. They matter, but you can no longer change them. Leading indicators measure what you do to prevent problems: inspections carried out, training completed, actions closed on time.

A mix prevents you from only correcting afterwards. If you only have accident figures, you react only when things go wrong. Add KPIs that steer the causes and that you can see moving weekly or monthly. Do make sure a leading KPI really predicts something: an inspection that is ticked off without looking prevents nothing.

KPIs for safety and health

In safety, reporting is a tricky KPI. A rise in the number of reports may actually point to a better reporting culture, so always read such a figure with context. An objective such as "zero accidents" is understandable as a direction, but as the only KPI it encourages people not to report accidents. A balanced set therefore combines outcomes and prevention:

Accidents with lost time, expressed per number of hours worked
Number of reported near misses and the percentage that was followed up
Percentage of workplace inspections carried out against the plan
Percentage of employees with valid certificates and training
Participation in toolbox talks and safety meetings
Percentage of LMRAs and TRAs completed for high-risk work

Measuring and reading trends

Agree for each KPI where the data comes from, who enters it and how often you look. Also record the definition: what counts as a complaint, what as a near miss, which period and which unit? Preferably use data you already record, such as reports, inspections and invoices, so that measuring does not become extra administration.

Look at the trend over several periods, not at a single data point. One bad month says little, three declining months in a row say a lot. With small numbers, such as few accidents, chance and season play a role. Compare over a longer period or with the same period last year.

KPIs for environment and energy

Environmental KPIs work best when you divide them by something that moves with your activity, such as revenue, production or hours worked. Then you see improvement even when you grow. An absolute figure remains useful for your total footprint, but a relative figure shows whether your work is getting cleaner. Examples:

Energy use per unit of product, per project or per hour worked
CO2 emissions of vehicle fleet and buildings, in total and per employee or per unit of revenue
Percentage of waste that is separated or reused
Number of environmental reports and complaints, and the time to resolve them
Share of renewable energy in total consumption
Water use per unit of product

Adjusting course: what do you do when a KPI turns red?

A KPI is not a final verdict but a signal. First ask whether the measurement is right, then why the result deviates, and only then what you do about it. Turn a deviation into an action with an owner and check in the next round whether the measure has worked.

Also adjust the objectives themselves when the situation changes. Adjusting an objective that no longer fits after an acquisition is wiser than clinging to it. Common mistakes are too many KPIs, objectives without an owner, measuring only what is easy and stopping measuring when a figure disappoints. Discuss the status in the management review.

Be alert to unwanted behavior that a KPI can provoke. Someone judged on a low complaints score may start labeling complaints differently. So steer on a combination of figures and, when there are deviations, first discuss what is really going on before you address anyone.

How BrydgeOne supports this

In BrydgeOne you steer on measurable goals and trends with Objectives & KPIs. Incidents & reports logs incidents and turns them into follow-up, Quality reports records nonconformities and complaints in a structured way, and in Energy & Emissions you record consumption, with the CO2 footprint calculated automatically.

KPIs and objectives for quality, safety and environment: examples