Insights: Article

Using Metrics to Drive Behavior

By Scott Kost

October 01, 2014

Most people would say that the most important metric of any business is profit, but what they don’t understand is that you improve profit by improving the day-to-day health and efficiency of operations. And you can’t improve that by just looking at profit metrics.

By using Key Performance Indicators (KPIs) to measure productivity, quality and deficiencies, you can drive the success of a business and ultimately identify trouble spots in real-time. KPIs aren’t new, but the technology solutions that measure KPIs are.

There are three main KPI indicators:

  1. Lagging KPIs look at history – what happened yesterday or last week or last month.
  2. Leading KPIs look at where to make changes. These are harder to measure but very powerful.
  3. Predictive KPIs look at what you are currently doing and where you are going to end up if you stay the course.

KPIs can be used to address many supply chain and operations challenges to actually change behavior and benefit your business’s bottom line. Inventory to sales ratio, number of stock rotations, number of months on hand, obsolete stock value, number of units produced per man hour, and adherence to schedule are just a small sampling of common KPIs that can be used to improve delivery, cost, quality and safety.

Which KPIs are right for assessing your business differ based on your industry and goals. No matter what type of business you run though, there is going to be a KPI that can help improve your operations and, ultimately, you’re bottom line.

Latest Insights

September 24, 2018
Article
Since the Affordable Care Act became reality, businesses have been scrambling to figure out what compliance looks like and how best to comply.
September 24, 2018
Article
In auto dealerships, showrooms, car lots and implement dealerships, there is a constant flurry of activity. One area that can easily get overlooked is cybersecurity.
September 21, 2018
Article
In the wake of hurricanes, devastating results have been experienced by communities and businesses throughout the Texas Gulf Coast, Caribbean, Florida and southeastern United States. As a result of these catastrophes, businesses will turn to…
September 20, 2018
Firm News
Eide Bailly LLP announced the winners of its 2018 Nonprofit Resourcefullness Awards, recognizing creative and sustainable revenue ideas from nonprofits in Arizona, Colorado, Minnesota, North Dakota and Utah.
September 19, 2018
Article
The IRS has started sending out Letter 5699 asking businesses to verify if they should have filed Forms 1094/1095-C. These forms are required for all ALEs.
September 19, 2018
Recorded Webinar
Are you considering doing business or having employees in Pennsylvania? Have you had issues with your state tax filing? Join our state and local tax team for some helpful insights into Pennsylvania tax filings.
September 19, 2018
Recorded Webinar
Are you considering doing business or having employees in Nevada? Have you had issues with your state tax filing? Join our state and local tax team for some helpful insights into North Dakota tax filings. This webinar will cover registration,…
September 19, 2018
Recorded Webinar
Are you considering doing business or having employees in North Dakota? Have you had issues with your state tax filing? Join our state and local tax team for some helpful insights into North Dakota tax filings. This webinar will cover registration,…
September 18, 2018
Article
As the largest tax reform legislation in the past 30 years becomes reality, it is important to stay up-to-date on planning opportunities and how reform may impact you and your business. Our Tax Reform: Practical Insights examples aim to break down…