Key performance indicators (KPIs) are a foundational tool for understanding lab performance. While most labs are good at measuring, KPIs are the metrics that matter. They highlight the difference between tracking activity and managing performance. The best KPIs enable the lab manager to focus on the metrics that matter the most and take prompt action.
Effective KPIs
Effective KPIs have these characteristics:
- Actionable – lab leaders and staff know what actions to take if the value of the KPI changes in an unfavorable way.
- Timely – the metrics are easy to measure and updated regularly enough to make a difference in how the lab operates.
- Understandable – the metrics’ meaning is clear and easily recognized by lab leaders and staff.
- Aligned – the metrics are well aligned with the lab’s values and objectives.
Lab managers can prioritize different metrics based on how well they connect with these characteristics. This is a way to focus on the things that matter most to the lab.
Decision-making
To support effective decision-making, KPIs need clear action points, like thresholds or triggers that indicate that action is required. The lab leadership team must align on how to respond when a KPI reaches a defined threshold. Assigning an internal owner to each KPI ensures the metric stays current and is communicated to the rest of the team.
Lab managers can further embed KPIs into the lab’s operations by ensuring they are regularly reviewed in leadership and operations meetings, monthly lab reviews, annual planning and budgeting, and are included in the annual objectives of key staff.
Productivity
KPIs that impact the lab’s productivity can help identify operational challenges like workload imbalances and output challenges. Here are some examples of KPIs that focus on important operational details:
- Project queue length or backlog
- Average turnaround time
- Percentage of work completed on first pass
- Work-in-progress vs. staff capacity ratio
- Percentage of work with rush status
- Percentage of work delivered late
These types of KPIs provide information about how well the lab is managing its workload. Taking prompt action can rebalance workloads for staff, better utilize lab resources, and improve communication with stakeholders. They also indicate workflows and lab habits that may need to be re-examined for improvement.
Lab quality
KPIs that impact the quality of the lab’s work and results detect signs of rework, errors, and data integrity risks. Here are some important quality program KPIs:
- Repeat rate for methods and assays
- Control chart trends approaching limits
- Method deviation rate
- Right-first-time rate
- Procedural deviation rate
Focusing on quality KPIs can help the lab understand the investigation workload, explore increased turnaround times, and help identify risks for audits or stakeholder complaints. When these KPIs indicate needed actions, lab managers can target things like specific retraining, method review or updates, and revision or clarification of the lab’s standard operating procedures and protocols.
Equipment
KPIs focused on the lab’s equipment and infrastructure help lab managers and lab quality managers anticipate downtime and prevent loss in lab productivity. Some KPIs to consider in this area include:
- Preventive maintenance compliance rate
- Mean time between failures
- Percentage of equipment operating within qualification limits
- Instrument utilization and availability
Understanding equipment KPIs can help lab managers predict unplanned downtime, capital replacement needs, capacity constraints, and instrument opportunities. Focusing on these KPIs will help lab managers take actions to improve instrument utilization and deliver on stakeholder needs by adjusting maintenance schedules, training staff on preventive maintenance, and redistributing work.
Workforce
KPIs related to the lab staff and their time help lab managers identify risks related to staffing, skills, and motivation. Taking action early in these situations tends to help morale and engagement and keep staff focused on technical work and delivering for stakeholders. Some examples include:
- Overtime rate
- Average hours per week
- Average applied hours per week
- Average overhead hours per week
- Training completion rate
- Average retention rate
- Average onboarding time
Paying attention to KPIs around staff time allows lab managers to predict issues around burnout, attrition, focus, efficiency, and insufficient workforce flexibility. Recognizing issues highlighted by these KPIs encourages lab managers to improve cross-training plans, adjust the size of the workforce, improve prioritization decisions, and redistribute workload.
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Lab safety
While safety is important in all labs, choosing a couple of safety-based KPIs can help keep it top of mind. Here are some examples of safety-based KPIs:
- Near miss reporting rate
- Safety observation rate
- Lab inspection violation rate
- Time to resolve inspection findings
- Safety training compliance rate
These KPIs help lab managers predict problems like an increased incident risk, lack of reporting safety issues, lack of prioritization on resolving potential safety issues, and disengagement from the lab’s safety culture. To address problems around the safety program, lab managers can schedule more safety training, conduct a safety stand-down, investigate the root causes of recurring safety issues, or have leadership be more visible in safety activities, like doing a leadership lab safety inspection.
Financial KPIs
KPIs focused on the financial health of the lab help lab managers spot problems around cost and inefficient use of resources earlier. This can be critical for labs with uncertain funding, or stretch financial objectives. Some examples of financial KPIs are:
- Consumable usage trends
- Expired or wasted consumable rate
- External spend vs. budget
- Expected revenue vs. budget
With these KPIs, lab managers can predict challenges such as budget overruns, wasted resources, supply chain inefficiencies, and revenue shortfalls. Actions that lab managers can take in these situations include renegotiation with important vendors, optimizing material inventories, redesigning workflows to reduce waste, standardizing important workflows, and improving communication with stakeholders who provide revenue for the lab.
