Lead and Lag KPI Indicators.
This is one of the interesting topic for strategic thinkers. I found this skill set in operation mangers,Data Analysts profiles. I feel that this knowledge is necessary to improve our day to day activities as well.
Lag is nothing but "outputs".Which is easy to measure.
E.g1: CEOs talk in the form of outputs like the target for 2017 Quarter 1 should be say 10Bn$.
E.g2: Production has to be increased to 1000 MTPD(Metric Ton per day)
E.g3: Gasoline and Diesel production has to be increased.
E.g4: Reduce Solvent cost.
Ideally these Lag parameters are easy to identify and easy to say.
Lead is "manipulators/Influence rs" to get that desired "outputs" Which is very difficult to measure.
Identifying these manipulators are very difficult. In a nutshell for the same examples listed above will have many ways to achieve the targets. and you know it is very difficult too.
Lets try for identifying Lead manipulators/influencers to get the desired outputs.
E.g1: Increase hiring the skilled resources. - But do they really work after hiring?
E.g2: Increase imports of raw materials. - Does our capacity handles it?
E.g3: Increase the efficiency of desalter. - Does this is the only indicator?
E.g4: Decrease the solvent flow and invest on construction of new regeneration plant. - Does it really feasible in cost point of view.
The above one is the first set of Lead indicators if we dig down further there will be very few that actually improves the outputs.
It also depends on how much investments has to be spent to get the desired outputs. Few may not interest in actually investing in new things and improve using the available resources or available Facilities.
If we drill down the management pyramid the objectives of top to bottom level will differ to get the desired output.
This is one of the interesting topic for strategic thinkers. I found this skill set in operation mangers,Data Analysts profiles. I feel that this knowledge is necessary to improve our day to day activities as well.
Lag is nothing but "outputs".Which is easy to measure.
E.g1: CEOs talk in the form of outputs like the target for 2017 Quarter 1 should be say 10Bn$.
E.g2: Production has to be increased to 1000 MTPD(Metric Ton per day)
E.g3: Gasoline and Diesel production has to be increased.
E.g4: Reduce Solvent cost.
Ideally these Lag parameters are easy to identify and easy to say.
Lead is "manipulators/Influence rs" to get that desired "outputs" Which is very difficult to measure.
Identifying these manipulators are very difficult. In a nutshell for the same examples listed above will have many ways to achieve the targets. and you know it is very difficult too.
Lets try for identifying Lead manipulators/influencers to get the desired outputs.
E.g1: Increase hiring the skilled resources. - But do they really work after hiring?
E.g2: Increase imports of raw materials. - Does our capacity handles it?
E.g3: Increase the efficiency of desalter. - Does this is the only indicator?
E.g4: Decrease the solvent flow and invest on construction of new regeneration plant. - Does it really feasible in cost point of view.
The above one is the first set of Lead indicators if we dig down further there will be very few that actually improves the outputs.
It also depends on how much investments has to be spent to get the desired outputs. Few may not interest in actually investing in new things and improve using the available resources or available Facilities.
If we drill down the management pyramid the objectives of top to bottom level will differ to get the desired output.
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