KPI — When Scores No Longer Reflect Real Results

Director's Article No. 1 · Management Perspective

Dao Van Kinh
Director and Founder, An Viet Industrial Co., Ltd.

What I write below is not management theory. These are lessons I have learned through more than twenty years in supporting-industry manufacturing. If these experiences help a manager, an engineer or an operator perform better each day, that would be my greatest reward.

After more than twenty years in manufacturing, I came to recognize a striking contradiction.

There were months when many departments achieved their KPI scores, yet customers still complained, deliveries were still late, defects recurred and managers still had to chase one incident after another.

That was when I understood that an attractive KPI dashboard does not necessarily mean the management system is operating effectively.

I also realized that every KPI number represents people doing real work every day. If managers look only at scores and forget to guide, listen to and help employees remove obstacles, KPIs become a source of pressure rather than a driver of improvement.

I once believed that enough targets and a complete reward-and-penalty policy would bring every activity under control. Experience taught me otherwise. KPIs create value only when they help people do their daily work better, not when they are used merely to close out the month.

Through years of observation and management, I have seen KPIs lose their meaning for three common reasons.

First, KPIs are reviewed only at month-end. By the time a problem is identified, the loss has already occurred and the opportunity for timely correction has passed. The KPI becomes an appraisal tool instead of an early-warning and process-adjustment tool.

Second, KPIs measure individuals without adequately reflecting end-to-end process performance. In manufacturing, customers do not buy one person's result. They evaluate final quality, delivery and overall performance. If a downstream operation remains late or continues to produce defects, the upstream work cannot be considered fully successful.

Third, KPI scores are not supported by evidence and improvement actions. A number becomes meaningful only when it is linked to data, root cause, a clearly assigned owner, corrective action and an effectiveness check. Without these elements, evaluation easily becomes subjective.

I consistently remind our management team:

KPIs are not created to find someone to punish after a problem occurs. They must help us see the risk early enough to prevent the problem together.

This is why An Viet is developing its KPI system around four principles:

  • Every indicator must be connected to daily work and a clearly defined data source.
  • Individual performance must be linked to the results of the team, department and entire process.
  • Every defect or deviation must be analyzed for root cause, assigned a specific countermeasure and followed by an effectiveness check to prevent recurrence.
  • Every report must help managers make faster and more accurate decisions rather than merely record what has already happened.

Some lessons have cost us time, money and, at times, customer dissatisfaction. Those experiences taught me that a company grows stronger not by imposing more penalties, but by learning faster from its own failures.

To me, a KPI is only a tool.

What matters more is that every person understands the value they create, knows how to coordinate with colleagues and shares responsibility for the final result.

I often tell the An Viet team:

We do not have to become the best today. But every day, we must become better than we were yesterday.

If every person improves a little, every process is refined a little and every defect becomes a lesson, the company will become stronger day by day.

For me, the KPI score is not the destination.

The destination is a workplace where people understand their responsibilities, trust one another, learn and grow together, and take pride in the products they make.

That is the path An Viet has pursued, continues to pursue and will remain committed to.