When you create a KPI for a piece of equipment, you will specify the limit values for the KPI. The limits that you specify define a performance range for the KPI based on your expectations for the equipment. The actual performance of the equipment will be evaluated based on this range. For example, your monthly water bill could be a Key Performance Indicator of the plumbing system in your home. This means that, based on your expectations, a high water bill (i.e., the Actual value) could indicate leaks in your system, and a low water bill should indicate a leak-free plumbing system.
The KPI limit range is essentially a scale from Worst to Best, and the limit values are essentially thresholds within that range. The following image shows the KPI ranges and where the limit values that define these ranges appear. When measurements are taken, the Actual value may fall between or equal the limit values, which indicates how well the equipment is performing (e.g., If the Actual value falls between the Target and Stretch Limit values, the KPI is in the Target-Stretch range).
The limit values may vary depending on what you want to measure. For example, if you create a KPI based on your monthly water bill, the range values will be measured in dollars, and your Best value would be a low number (e.g., $30.00), while your Worst Value would be a high number (e.g., $300.00). In another case, the KPI may be based on a water heater, which would require that Best value to be a high number, and the range to be measured in degrees Fahrenheit.
To continue with the water bill example, the monthly cost for water usage in your home would be the key indicator of the overall performance of the equipment involved in the plumbing system. A high water bill might indicate that the usage of water is high, that there is a leakage in a pipe, that a piece of equipment is malfunctioning, or all of the above. The KPI should serve as the first step in tracking the performance of the system.
Copyright © 2018 General Electric Company. All rights reserved.