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Business Functions and BI Levels  ›  Lesson

Operations and HR KPIs

Operations 14 minOperations KPIs measure how reliably and quickly the business keeps its delivery promises, HR KPIs measure how well it attracts and keeps its people, and reading them together often explains what neither shows alone.

Operations and HR KPIs

Farah runs Weftwise's two warehouses; Anita runs HR. Their dashboards have never been on the same screen. In March, Farah's on-time rate fell to 90% and Anita's attrition figure crept up, and each assumed the other's number was somebody else's problem. Put side by side, they tell one story.

The rule

Operations counts promises kept; HR counts people kept.

Operations KPIs measure whether the business delivers what it promised, quickly and at a sensible cost:

  • On-time delivery = orders delivered by the promised date ÷ orders delivered. March: 864 ÷ 960 = 90%, against a 95% target.
  • In-full rate = orders that arrived complete and correct ÷ orders delivered. March: 936 ÷ 960 = 97.5%.
  • OTIF (on time, in full) counts only orders that were both. March: 840 ÷ 960 = 87.5%. It is the strictest view of the customer's experience.
  • Dispatch time: days from order to leaving the warehouse.
  • Cost per order shipped: packing and courier cost ÷ orders shipped.

HR KPIs measure whether the business attracts, keeps and grows the people who do the work:

  • Headcount: people employed. Weftwise has 20 packers in its warehouses, 10 at each site.
  • Attrition = people who left ÷ average headcount over the period. Over the last year, 4 of 20 left: 20%.
  • Time to hire: days from opening a vacancy to someone accepting it.
  • Absence rate and training hours per person.

Attrition divides by average headcount, not by the change in headcount. A team of 10 that loses three people and hires three stays the same size but has 30% attrition, and it pays for it in recruitment time and in new starters who work more slowly while they learn.

The shortcut

Split by site before you conclude, then cross the functions. A company-wide figure is an average that can hide one good part and one bad part. Once you find the bad part, look at the other departments' KPIs for the same place.

Why is on-time delivery 90%?Step 1 of 4

  1. Start with the total

    864 of 960 delivered orders were on time: 90%, 5 points below target.

The trap is fixing the wrong department. Changing couriers would not help if parcels leave the warehouse late.

Drills

Answer fast — trust the rule.

Kolkata delivered 480 orders and 408 were on time. What is its on-time rate, in percent?
408480×100= ?\tfrac{408}{480} \times 100 = \,?
4 of Weftwise's 20 warehouse staff left over the year, and headcount stayed at 20. What was the attrition rate, in percent?
420×100= ?\tfrac{4}{20} \times 100 = \,?
quick drill

An order arrives on the promised day, but one cushion cover is missing. How does it count?

quick drill

Which of these is an HR KPI?

quick drill

Kolkata started the year with 10 packers and ended with 10. Three left and three were hired. What was its attrition?

Remember

  • Operations counts promises kept; HR counts people kept.
  • Split by site before you conclude, then cross the functions.
  • Trap: attrition from net headcount change, and fixing the wrong department.

Practice — level up

0/1 solved

Write your answer, then compare it with a rubric and a model answer.

ExplainOne story, two departments

Using Weftwise's March numbers, explain how splitting on-time delivery by warehouse and then looking at HR KPIs for the same warehouse explains a problem that neither department's dashboard showed on its own.