Strategic objective
Cost Reduction KPIs
Pre-built KPI trees for Cost Reduction. Each tree starts at a North Star metric and breaks down into the drivers and leading indicators your teams can act on.
KPI trees
Manufacturing OEE & Throughput
L0 · Overall Equipment Effectiveness (OEE) · 14 metrics
Decompose Overall Equipment Effectiveness into availability, performance and quality drivers down to the shop floor.
Lean Continuous Improvement & Waste
L0 · Cost of Waste Eliminated · 10 metrics
Link the cost of poor quality and waste elimination to daily kaizen habits and idea velocity.
Supply Chain Fulfillment
L0 · Perfect Order Rate · 9 metrics
Break Perfect Order Rate into on-time, in-full and damage-free delivery drivers across suppliers and warehouses.
Customer Support Efficiency
L0 · Cost per Resolved Ticket · 9 metrics
Balance cost per ticket and customer satisfaction through resolution speed and deflection.
EBITDA Margin Driver Tree
L0 · EBITDA Margin · 8 metrics
Trace EBITDA margin back to gross margin, operating expense discipline and working drivers.
Employee Retention & Engagement
L0 · Voluntary Turnover Rate · 7 metrics
Connect voluntary turnover to engagement, manager quality and time-to-productivity.
Manufacturing SQDC (Safety, Quality, Delivery, Cost)
L0 · Plant SQDC Performance Index · 14 metrics
The classic tiered-huddle board: balance safety, quality, delivery and cost with daily leading indicators.
Mining EBITDA
L0 · Mine-Site EBITDA · 14 metrics
Drive mine-site EBITDA from ore mined, grade and recovery through to unit cash costs and fleet availability.
Cost of Poor Quality (COPQ)
L0 · Cost of Poor Quality (COPQ) · 20 metrics
Expose the hidden cost of defects by decomposing COPQ into internal failure, external failure, appraisal and prevention costs.
Key Cost Reduction metrics
| Metric | Formula | Type |
|---|---|---|
| Overall Equipment Effectiveness (OEE) | OEE = Availability × Performance × Quality | Lagging |
| Availability | Run Time ÷ Planned Production Time | Lagging |
| Performance | (Ideal Cycle Time × Total Count) ÷ Run Time | Lagging |
| Quality | Good Count ÷ Total Count | Lagging |
| Cost of Waste Eliminated | Σ validated annualized savings | Lagging |
| Improvement Project Throughput | # projects closed per month | Lagging |
| Cost of Poor Quality (COPQ) | Scrap + Rework + Warranty + Returns | Lagging |
| Perfect Order Rate | On-Time % × In-Full % × Damage-Free % × Doc Accuracy % | Lagging |
| On-Time Delivery (OTD) | On-Time Orders ÷ Total Orders | Lagging |
| Fill Rate | Units Shipped ÷ Units Ordered | Lagging |
| Cost per Resolved Ticket | Total Support Cost ÷ Tickets Resolved | Lagging |
| First Contact Resolution (FCR) | Resolved on 1st Contact ÷ Total Resolved | Lagging |
| Logo Churn Rate | Churned Customers with Support Tickets ÷ Customers at Start | Lagging |
| Self-Service Deflection | Self-service sessions ÷ (sessions + tickets) | Leading |
| CSAT | Satisfied responses ÷ Total responses | Lagging |
| EBITDA Margin | EBITDA ÷ Revenue | Lagging |
| Gross Margin | (Revenue − COGS) ÷ Revenue | Lagging |
| OpEx as % of Revenue | Operating Expenses ÷ Revenue | Lagging |
| Voluntary Turnover Rate | Voluntary Exits ÷ Avg Headcount | Lagging |
| Employee Engagement (eNPS) | % Promoters − % Detractors | Leading |
| First-Year Attrition | Exits < 12 mo ÷ Hires | Lagging |
| Plant SQDC Performance Index | Avg(Safety %, Quality %, Delivery %, Cost %) of target achieved | Lagging |
| Safety: Total Recordable Incident Rate (TRIR) | (# Recordable Incidents × 200,000) ÷ Hours Worked | Lagging |
| Quality: Customer PPM | (Defective Units Returned ÷ Units Shipped) × 1,000,000 | Lagging |
| Delivery: On-Time In-Full (OTIF) | OTIF Orders ÷ Total Orders | Lagging |
| Cost: Conversion Cost per Unit | (Direct Labor + Overhead) ÷ Units Produced | Lagging |
| Mine-Site EBITDA | Revenue − Cash Operating Costs − Royalties | Lagging |
| Payable Metal Revenue | Payable Metal Produced × Realized Price | Lagging |
| All-In Sustaining Cost (AISC) per Unit | (Cash Costs + Sustaining Capex + G&A) ÷ Units Sold | Lagging |
| Cost of Poor Quality (COPQ) | Internal Failure + External Failure + Appraisal + Prevention Costs | Lagging |
| Internal Failure Costs | Scrap + Rework + Retest + Downtime from defects | Lagging |
| External Failure Costs | Warranty + Returns + Claims + Recalls | Lagging |
| Appraisal Costs | Inspection + Testing + Audit Costs | Lagging |
| Prevention Costs | Training + PM + Quality Planning + Supplier Qualification | Leading |
From library to execution
A KPI tree on paper is a plan. In KPI Fire it's a system.
Import any tree, assign metric owners, connect data, and launch improvement projects the moment a leading indicator drifts.
- Live scorecards & catchball
- Strategy deployment (Hoshin)
- Kaizen & project tracking
- Automated red/green alerts
- See KPI Fire in action