KPI Definition Template
Two reports that show different numbers for the same KPI cost more time than any calculation error. A one-page definition with a formula, source and owner ends that argument. Fill in the fields and export the sheet.
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KPI Definition Template
KPI Definition: On-Time Delivery (OTD)
Version: 1.2 Effective: 2026-10-20 Business owner: VP Operations Data steward: ERP Analyst
Purpose
Measure how reliably customer order lines ship by the date promised to the customer.
Calculation
Formula: Order lines shipped on or before the promise date divided by all order lines shipped in the period, times 100.
Unit: Percent, one decimal
Frequency: Weekly
Data source
ERP shipment line table joined to the sales order line promise date. Report: Shipped Lines Detail.
Inclusions and exclusions
Exclude samples, returns and intercompany transfers. Include partial shipments by line.
Target and thresholds
Target 95%. Amber 90 to 95. Red below 90.
Known caveats
Promise date changes after order entry are measured against the latest customer-agreed date.
Approval
Keep one definition per KPI and store every version. Change the version number and effective date whenever the formula, source or exclusions change.
Turn definitions into governed queries
Optional: we can review your KPI sheets and show how they map to ERP tables and reports.
Optional. The tool and every export work without this. No spam.
How to use the definition sheet
Write the definition when the KPI is first requested, not after the first dispute. Name a business owner who decides what the number should mean and a data steward who maintains the query. State the formula in words first, then add field names. Record exclusions explicitly: samples, returns, intercompany, scrap, planned downtime. Add the target and the thresholds so a status color is never a matter of taste.
- Use one sheet per KPI, never a combined list
- Include a worked example with real numbers
- Version every change with an effective date
What a good definition contains
Purpose in one sentence, a formula, a unit, a frequency, a data source down to the report or table, inclusions and exclusions, targets, caveats and an approval line. The data source is the part most often left vague. Writing the actual report name or query makes the KPI reproducible when the person who built it leaves, or when you migrate to a new ERP and have to rebuild it.
Examples of ambiguity this sheet removes
On-time delivery can be measured at order, line or quantity level, against request date, promise date or original commit date, and with or without a grace window. Inventory turns can use average or ending inventory and standard or actual cost. OEE can include or exclude planned downtime. Each of these choices moves the number by several points. The definition sheet forces the choice to be made once and recorded.
Common mistakes
Defining KPIs in a slide deck that nobody updates, putting no owner on the page, or letting each department write its own variant under the same name. Another mistake is changing the formula without a version bump, which breaks the trend silently. When a change is needed, restate the prior periods under the new definition or mark the break on the chart.
Frequently Asked Questions
What is a KPI definition document?
It is a short record of what a KPI means: the formula, unit, data source, owner, exclusions and targets. It ensures every report and every person calculates the same number the same way.
Who should own a KPI?
A business leader who is accountable for the outcome, such as operations for OTD or the controller for DIO. The data steward maintains the query, but the business owner decides what the number means.
How detailed should the formula be?
Detailed enough that a competent analyst could rebuild it from the sheet alone. Include field or table names, the date logic and the rounding rule. A worked example with real numbers helps.
How many KPIs need a definition?
Every KPI that appears in a management report. Start with the five to eight on the monthly dashboard and add others as they are requested.
If you want these definitions enforced in your reports, Netray can help encode them as governed queries in your ERP reporting layer, read-only by default.
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