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Guide with worked examples

OKR meaning, and OKR examples for manufacturing by function

Short answer

OKR stands for objectives and key results. The objective is a short statement of what you want to change by the end of a period, usually a quarter. The key results are the two to four numbers that prove it changed, each with a starting value and a target.

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ObjectiveOwner: Production manager

Make the schedule every day on Lines 1 to 3

Key results: baseline to target
  • Schedule attainment, Lines 1 to 386% to 95%
  • OEE, Lines 1 to 371% to 76%
  • Average changeover, Lines 1 to 340 minutes to 30 minutes
An example with sample data: one objective, three key results with a baseline and a target.

The definition

What does OKR mean?

OKR means objectives and key results. The objective says what will be different at the end of the quarter, in one plain sentence. The key results are the two to four measurements that prove it, each with today's value and the value you are aiming for. The method came from Intel in the 1970s and spread through Google.

  • Objective

    One sentence that says what will be different, in words a team leader would use. Make the schedule every day on Lines 1 to 3. Nobody goes home hurt this quarter. It is not a number; the numbers come next.

  • Key results

    Two to four measurements that prove the objective. Each one has a baseline (where it is today), a target (where it will be by the end of the quarter) and a unit. Schedule attainment from 86% to 95%. A key result you cannot measure by the end of the quarter is a task, not a key result.

  • Owner

    One person for the objective and one for each key result. Several people can work on it; one person brings the number to the review.

  • Initiatives

    The projects and kaizens that will move the key results. They sit under the OKR, not in it. If a key result does not move, the initiative changes; the key result does not.

Most plants do not lack goals. They have the annual budget, the customer scorecard, the corporate pillars and a wall of KPIs. What they lack is a short list of what has to change this quarter, with names against it. OKRs give the leadership team that list, and give each department a way to say what it will do about it.

In an office, OKRs often replace the goal system. In a plant they usually sit inside one: the year's direction comes from the budget or a hoshin kanri plan, the daily numbers already live on the tier boards, and the OKR is the quarter-sized step in between. The guide on OKR vs KPI, and where hoshin kanri fits sets out the three side by side.

Writing one

How do you write an OKR?

Write the objective first, as a change you can picture on the floor, not a metric. Then pick two to four key results, each a number with a baseline, a target and a date. Check that hitting every key result would mean the objective is true. Name one owner and agree it with the team that has to deliver it.

  1. 1

    Start from a problem the floor already feels

    The best objectives name something a supervisor complains about: a line that never makes the schedule, a part that is always short, a changeover that eats the shift. If the objective came from a slide, test it on the floor first.

  2. 2

    Write the objective as a change, not a metric

    Reduce downtime is a metric with a verb in front. Stop fixing the same machine twice is an objective. The metric comes in the key results.

  3. 3

    Pick key results that would convince a sceptic

    Ask: if all of these hit, would anyone argue the objective was not met? If yes, you are missing a key result or one of them measures the wrong thing. Mix one lagging result (recordables) with one leading result (near misses reported).

  4. 4

    Put a baseline on every key result

    From 86% to 95% can be scored. To 95% cannot, because nobody knows how far it moved. If there is no baseline, the first key result is to measure it for four weeks.

  5. 5

    Count the key results

    Two to four per objective. Three to five objectives for a plant, one or two for a department. A department with eight objectives has a to-do list, and the to-do list will win.

  6. 6

    Agree it with the people who deliver it

    An OKR written in the office and announced on Monday is a target. An OKR the department helped write is a commitment. Lean plants call this round catchball; it takes two weeks and saves the quarter.

A short comparison

How are OKRs different from KPIs?

A KPI tracks the ongoing health of a process every day or every month, and it stays on the board for years. An OKR describes a change you want in one quarter and is retired when the quarter ends. Most key results are a KPI with a baseline and a target, so the two work together: KPIs watch, OKRs move.

OKRs compared with KPIs
AspectOKRKPI
What it is forA change you want in one quarterThe ongoing health of a process
How long it livesOne quarter, then it is scored and retiredYears; it stays on the board
ShapeOne objective, two to four key results with a baseline and a targetOne measure with a target or a control range
What a miss meansLearn, rescore, write the next oneAct today: a red KPI gets a countermeasure
Where it livesThe quarterly reviewThe tier board and the monthly bowling chart
ExampleSchedule attainment from 86% to 95% by the end of MarchSchedule attainment, daily, green at 95% or above

The full three-way comparison, with hoshin kanri and the X-matrix beside them and one objective written all three ways, is on OKR vs KPI, and where hoshin kanri fits.

At the end of the quarter

How are OKRs scored?

At the end of the quarter, each key result gets a score from 0.0 to 1.0 for how far it moved from the baseline toward the target. The objective's score is the average. A score of 0.6 to 0.7 is a good result for a stretch goal; 1.0 every quarter means the targets were too easy.

Objective, scored at quarter endOwner: Production manager

Make the schedule every day on Lines 1 to 3

Key results: baseline to target, actual and score
  • Schedule attainment, Lines 1 to 386% to 95%
    Actual 92.3%score 0.7
  • OEE, Lines 1 to 371% to 76%
    Actual 76%score 1.0
  • Average changeover, Lines 1 to 340 minutes to 30 minutes
    Actual 37 minutesscore 0.3

Objective score: the average of the key results0.67

An example with sample data. Each key result scores how far it moved from the baseline toward the target; the objective is the average.
  1. 1

    Score each key result from 0.0 to 1.0

    The score is how far the number moved from the baseline toward the target. Schedule attainment from 86% to 95% that lands at 92.3% moved 6.3 of 9 points, so it scores 0.7. A result that went backwards scores 0.0; a result past the target is capped at 1.0.

  2. 2

    Average them for the objective

    The three key results in the sample score 0.7, 1.0 and 0.3, so the objective scores 0.67. Write a sentence next to the score: what moved it and what did not.

  3. 3

    Read the pattern, not the number

    Scores of 0.6 to 0.7 on stretch objectives are the aim. A plant that scores 1.0 everywhere set targets it already knew it could hit. A plant that scores 0.2 everywhere set targets nobody believed in, usually because catchball was skipped.

  4. 4

    Keep scores away from pay

    The moment a score decides a bonus, every target gets sandbagged and the scores stop telling the truth. Score to learn; pay on the KPIs and the annual results.

What goes wrong

Common OKR mistakes on the shop floor

  • Renaming the KPI board as OKRs

    Twelve key results that are the twelve KPIs with this year's target is the budget, not an OKR set. Pick the two or three numbers that have to move this quarter and leave the rest on the board where they belong.

  • Key results that are tasks

    Install the new fixture by March is a task: it is done or not done, and doing it proves nothing about the line. Changeover on Press 2 from 40 to 28 minutes is the key result the fixture is meant to deliver.

  • No baseline

    Reach 95% first-pass yield cannot be scored if nobody wrote down that it is 94% today, and the review turns into an argument about where it started.

  • OKRs that stop at the plant manager

    If the plant's OKRs never become a department objective and a person's key result, the floor sees a poster. Cascade each one at least two levels, and let each level write its own version.

  • A quarter with no review in it

    An OKR set in January and scored in April had nothing checking it in between. Put the key results on the existing tier 3 agenda every week; do not invent a new meeting.

  • Changing the target when it goes red

    A key result that is behind gets a countermeasure, not a smaller target. If the target was wrong, say so at the mid-quarter check and write down why.

  • Stretch targets on safety

    A stretch target is one you expect to score 0.7 on. Recordable incidents is not a place for 0.7. Safety key results are commitments, scored pass or fail, and the stretch goes on the leading indicators such as near misses reported and actions closed.

  • OKRs instead of the lean system, not inside it

    Plants that already run tier meetings, KPI boards and kaizen do not need a second goal system beside them. The OKR is the quarter-sized step inside the annual plan; the tier boards and kaizen are how it gets done.

Worked examples

OKR examples for manufacturing by function

A manufacturing OKR names a change the plant can see within a quarter and measures it with the plant's own numbers: OTIF, first-pass yield, schedule attainment, unplanned downtime, recordable incidents, cross-training coverage. The examples below cover eight functions. Each one is cascaded to a department and then to one person, so you can see how the chain holds.

Eight worked OKR examples for an illustrative plant with four presses and four assembly lines. The numbers are illustrative, chosen to be realistic for one quarter; none is a customer result. Each example shows the plant-level OKR, the department's own version and the key result one person owns, so you can see the chain from the leadership review to a named person.

  1. Example 1: Plant manager OKR example

    Delivery

    Why this objective: The largest customer audits this plant twice a year because of late deliveries and two escapes. Earning the audit back to once a year is worth more than any single project.

    Plant-level objectiveOwner: Plant manager

    Run a plant the customer stops checking up on

    Key results: baseline to target
    • On-time in-full delivery (OTIF)91% to 96%
    • Unplanned downtime, Lines 1 to 462 hours a month to 40 hours a month
    • Customer escapes2 a quarter to 0 a quarter
    An example with sample data. Illustrative numbers for one quarter.
    1. PlantPlant manager

      Run a plant the customer stops checking up on

    2. DepartmentProduction

      Make the schedule every day on Line 2, the line behind most late shipments

      • Schedule attainment, Line 2: 84% to 95%
      • Unplanned downtime, Line 2: 24 hours a month to 14 hours a month
    3. PersonLine 2 supervisor

      Owns these key results

      • Shifts with the start-up readiness check done before the first part: 60% to 100%
      • Minor stops escalated within the shift, not the next day: 50% to 100%
    An example with sample data: the department's own version, then one person's key results.

  2. Example 2: Safety OKR example

    Safety

    Why this objective: Two recordables last quarter were both repeats of near misses that had been reported and not closed.

    Plant-level objectiveOwner: EHS manager

    Nobody goes home hurt this quarter

    Key results: baseline to target
    • Recordable incidents2 a quarter to 0 a quarter
    • Near misses reported15 a month to 40 a month
    • Safety actions open longer than 30 days18 actions to 0 actions
    An example with sample data. Illustrative numbers for one quarter.
    1. PlantEHS manager

      Nobody goes home hurt this quarter

    2. DepartmentMaintenance

      Every job locked out, every time

      • Lockout audits passed: 70% to 100%
      • Safety work orders older than 14 days: 12 work orders to 0 work orders
    3. PersonMaintenance technician

      Owns these key results

      • Jobs with the lockout verified by a second person before work starts: 55% to 100%
    An example with sample data: the department's own version, then one person's key results.

  3. Example 3: Quality OKR example

    Quality

    Why this objective: Sorting at the customer costs the relationship more than the parts. Three of the last four complaints were defects that an in-station check would have caught.

    Plant-level objectiveOwner: Quality manager

    Ship nothing the customer has to sort

    Key results: baseline to target
    • Customer PPM180 PPM to 120 PPM
    • First-pass yield, all lines94% to 97%
    • 8D reports open longer than 30 days9 reports to 2 reports
    An example with sample data. Illustrative numbers for one quarter.
    1. PlantQuality manager

      Ship nothing the customer has to sort

    2. DepartmentFinal assembly

      Catch every defect at the station that made it

      • First-pass yield at final test: 92% to 96%
      • Top five defect stations with an error-proofing device: 1 stations to 5 stations
    3. PersonQuality engineer, final assembly

      Owns these key results

      • Stations error-proofed and verified for four weeks: 1 stations to 5 stations
      • Hourly first-piece checks recorded: 80% to 100%
    An example with sample data: the department's own version, then one person's key results.

  4. Example 4: Production OKR example

    Delivery

    Why this objective: Every missed day on these three lines becomes overtime on Saturday and a late truck on Monday.

    Plant-level objectiveOwner: Production manager

    Make the schedule every day on Lines 1 to 3

    Key results: baseline to target
    • Schedule attainment, Lines 1 to 386% to 95%
    • OEE, Lines 1 to 371% to 76%
    • Average changeover, Lines 1 to 340 minutes to 30 minutes
    An example with sample data. Illustrative numbers for one quarter.
    1. PlantProduction manager

      Make the schedule every day on Lines 1 to 3

    2. DepartmentLine 3 team

      Change over in half an hour, every time

      • Average changeover, Line 3: 44 minutes to 32 minutes
      • Minor stops per shift, Line 3: 28 stops to 15 stops
    3. PersonLine 3 team leader

      Owns these key results

      • Changeovers run to the new standard, with the checklist signed: 0% to 100%
      • Operator ideas closed on Line 3: 2 ideas to 10 ideas
    An example with sample data: the department's own version, then one person's key results.

  5. Example 5: Maintenance OKR example

    Cost

    Why this objective: A third of breakdown hours last quarter were repeat failures within 30 days of the first repair.

    Plant-level objectiveOwner: Maintenance manager

    Stop fixing the same machine twice

    Key results: baseline to target
    • Repeat breakdowns (same failure within 30 days)14 a month to 4 a month
    • Preventive maintenance completed on schedule68% to 95%
    • Mean time between failures, critical assets110 hours to 160 hours
    An example with sample data. Illustrative numbers for one quarter.
    1. PlantMaintenance manager

      Stop fixing the same machine twice

    2. DepartmentPress shop maintenance

      Keep the four presses on their PM schedule

      • Press PMs completed on schedule: 60% to 95%
      • Press breakdown hours: 45 hours a month to 25 hours a month
    3. PersonMaintenance planner

      Owns these key results

      • Weeks with next week's PM schedule issued by Thursday: 55% to 100%
    An example with sample data: the department's own version, then one person's key results.

  6. Example 6: Supply chain and logistics OKR example

    Delivery

    Why this objective: Material shortages were the top downtime reason on two of four lines last quarter.

    Plant-level objectiveOwner: Supply chain manager

    Never stop a line for a missing part

    Key results: baseline to target
    • Line stoppages for material22 a month to 5 a month
    • Supplier on-time in-full delivery84% to 93%
    • Inventory record accuracy91% to 98%
    An example with sample data. Illustrative numbers for one quarter.
    1. PlantSupply chain manager

      Never stop a line for a missing part

    2. DepartmentReceiving and stores

      Every part put away and findable within a day

      • Receipts put away within 24 hours: 70% to 98%
      • Cycle count accuracy: 91% to 98%
    3. PersonMaterials planner

      Owns these key results

      • Late supplier deliveries chased within 24 hours of the due date: 50% to 100%
    An example with sample data: the department's own version, then one person's key results.

  7. Example 7: Continuous improvement and lean office OKR example

    People

    Why this objective: Improvement happens in three events a year and stops when the CI team leaves the area.

    Plant-level objectiveOwner: CI manager

    Make improvement part of the day, not an event

    Key results: baseline to target
    • Kaizens closed45 a quarter to 120 a quarter
    • Hourly employees with at least one closed idea20% to 50%
    • A3s with a result verified 30 days after closure3 A3s to 10 A3s
    An example with sample data. Illustrative numbers for one quarter.
    1. PlantCI manager

      Make improvement part of the day, not an event

    2. DepartmentPress shop

      Every press team closes its own ideas

      • Kaizens closed in the press shop: 8 a quarter to 30 a quarter
      • 5S audit score, press shop: 62 points to 85 points
    3. PersonCI engineer

      Owns these key results

      • Kaizen events with the result verified at 30 days: 1 events to 4 events
    An example with sample data: the department's own version, then one person's key results.

  8. Example 8: HR and people OKR example

    People

    Why this objective: A quarter of new hires leave inside 90 days, and two positions on the night shift have one qualified person each.

    Plant-level objectiveOwner: HR manager

    Every line staffed with trained people on every shift

    Key results: baseline to target
    • Positions with two or more qualified people55% to 85%
    • New hires still here after 90 days70% to 90%
    • Unplanned absence6.5% to 4.5%
    An example with sample data. Illustrative numbers for one quarter.
    1. PlantHR manager

      Every line staffed with trained people on every shift

    2. DepartmentAssembly

      Nobody is the only person who can run a station

      • Assembly positions with two or more qualified people: 50% to 85%
      • On-the-job training plans completed on time: 60% to 95%
    3. PersonAssembly trainer

      Owns these key results

      • Operators qualified on a second station: 4 operators to 12 operators
    An example with sample data: the department's own version, then one person's key results.

The department and person rows are what a cascade should produce: the department writes its own objective in its own words and keeps the plant's numbers it can move, and the person owns one or two key results that are theirs alone. How that cascade and the catchball round work is the subject of the cascading goals guide.

A level up

Company goal examples, and the department goals under them

Three company goals for the year, each measured by one KPI, with the quarterly OKR from the examples above that would sit under it. The department goal examples are the department rows in each example: the plant objective rewritten in the department's words with its own numbers.

  • Safety

    Zero recordable incidents at every plant

    Measured by: Recordable injury rate (TRIR), all sites

    Quarterly OKR under it: Nobody goes home hurt this quarter

  • Delivery

    On-time in-full delivery from 91% to 96% across the company

    Measured by: OTIF %, all sites

    Quarterly OKR under it: Make the schedule every day on Lines 1 to 3

  • Quality

    Customer PPM under 100 at every plant by year end

    Measured by: Customer PPM, all sites

    Quarterly OKR under it: Ship nothing the customer has to sort

A company goal runs for the year and is measured by one KPI. The quarterly OKR under it is the step the plant takes next. The same three goals, written as an annual hoshin plan, an OKR and a monthly KPI, are worked through on the OKR vs KPI page.

An example with sample data.

The rhythm

How does an OKR quarter run in a plant?

A plant OKR quarter has four beats: set the OKRs in the last two weeks of the previous quarter, review the key results every week at the existing tier meeting, hold one mid-quarter check to drop or change what is not working, and score and retire the OKRs in the last week. The next quarter's set starts from what was learned.

  1. 1

    Weeks 11 and 12 of the quarter before: set

    Leadership drafts three to five plant objectives from the annual plan and the last quarter's scores. Departments reply with their own version in two weeks. The set is fixed before the quarter starts, not in week three.

  2. 2

    Every week: check at the tier 3 meeting

    The key results join the plant's existing weekly review as three or four extra rows. Red gets a countermeasure from the owner. No new meeting is created.

  3. 3

    Week 6 or 7: the mid-quarter check

    One hour. For each objective: on track, at risk, or drop it. An initiative that has not moved its key result in six weeks is changed. A target that was wrong is rewritten here, with the reason recorded, and nowhere else.

  4. 4

    Week 13: score and retire

    Each owner scores their key results and writes one sentence on what moved and what did not. The scores and the sentences feed next quarter's set. A key result that must keep moving becomes a KPI on the board.

Sources

In LeanSuite

OKRs in LeanSuite

LeanSuite's Strategy module holds the goals your OKRs sit under, and the plant's own KPIs that measure them.

  1. Goals for the year, measured by a KPI

    Goals are set for the year at company and facility level. Each has an owner, a pillar such as Safety, Quality, Delivery, Cost or People, a Why it matters statement and the KPI it is measured by, and every month it shows Met or Missed from that KPI.

  2. A cascade with three replies

    A goal is cascaded to the facilities you choose, or from a facility to its teams, with a message and a reply-by date. Each one replies: adopt it as written, write its own version, or mark it not applicable and say why. That is the department row of the examples above.

  3. Initiatives connected to the goal they serve

    Kaizen projects are tagged to the goal they serve, and a goal lists the projects, work orders, best practices and issues that support it. An initiative that serves no goal lands in Other, where everyone can see it.

  4. A red KPI starts the countermeasure

    The KPIs behind the goals are the plant's own, with KPI trees that roll up from department to plant to company and the bowling chart for the monthly view. A red KPI opens an action, an A3 or a project.

  1. Company goalMeasured by: OTIF %, all sites

    On-time in-full delivery from 91% to 96%

  2. FacilityReply: write own version

    Run a plant the customer stops checking up on

    • On-time in-full delivery (OTIF): 91% to 96%
    • Unplanned downtime, Lines 1 to 4: 62 hours a month to 40 hours a month
    • Customer escapes: 2 a quarter to 0 a quarter
  3. TeamProduction

    Make the schedule every day on Line 2, the line behind most late shipments

    • Schedule attainment, Line 2: 84% to 95%
    • Unplanned downtime, Line 2: 24 hours a month to 14 hours a month
An example with sample data: the first example above as a company goal cascaded to a facility and a team.

Where to look next

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Read more on OKRs and goals

FAQ

Questions about OKRs in manufacturing

  1. OKR means objectives and key results. The objective is one plain sentence saying what will be different at the end of a period, usually a quarter. The key results are the two to four measurements that prove it, each with a baseline and a target. The method was developed at Intel in the 1970s and became widely known through Google.

  2. Objective: make the schedule every day on Lines 1 to 3. Key results for the quarter: schedule attainment from 86% to 95%, OEE from 71% to 76%, and average changeover from 40 to 30 minutes. The owner is the production manager, and the Line 3 team writes its own version underneath, such as changeover on Line 3 from 44 to 32 minutes. The numbers are illustrative.

  3. A key result is a number with a baseline, a target and a date: customer PPM from 180 to 120 by the end of June, or near misses reported from 15 to 40 a month. It is not a task. Install the new fixture is something you do; changeover from 40 to 28 minutes is the key result the fixture should deliver.

  4. A KPI tracks the ongoing health of a process and stays on the board for years. An OKR describes a change you want in one quarter and is retired when the quarter ends. Most key results are a KPI with a baseline and a target attached, so the two work together: the KPI watches, the OKR moves it.

  5. Three to five objectives for the plant, each with two to four key results, and one or two objectives for each department. More than that and the set becomes a list of everything the plant is doing, which is what the KPI board and the project list are for.

  6. Each key result scores from 0.0 to 1.0 for how far it moved from the baseline toward the target, and the objective scores the average. Schedule attainment from 86% to 95% that ends at 92.3% scores 0.7. A score of 0.6 to 0.7 is a good result on a stretch objective; 1.0 every quarter means the targets were too easy.

  7. Quarterly, inside a yearly plan. The year's goals come from the budget or a hoshin kanri plan and are measured by KPIs every month. The OKR is the quarter-sized step toward them. Setting OKRs for a whole year loses the point, which is to pick what has to move next and check it often.

  8. Yes, and plants that run both usually nest them. Hoshin kanri sets the three to five year breakthroughs, the annual objectives and the improvement priorities on an X-matrix, agreed through catchball. Each quarter, the OKRs name the step toward the annual objectives, and the bowling chart tracks the KPIs every month.

  9. No. When a score decides pay, targets get sandbagged and the scores stop telling the truth. Score OKRs to learn what moved and what did not, and pay on the KPIs and the annual results. Safety key results are the exception in the other direction: they are commitments, scored pass or fail, not stretch goals.

  10. A team leader can own a key result, such as changeovers run to the new standard on 100% of changeovers. Most operators are better served by the team's board and their own ideas than by a personal OKR. The cascade should reach the person who can move the number, and stop there.

  11. LeanSuite's Strategy module holds goals for the year at company and facility level, each with an owner, a pillar, a Why it matters statement and the KPI it is measured by, and shows Met or Missed every month. A goal cascades to chosen facilities or teams with a reply-by date, each replies (adopt as written, own version or not applicable), kaizen projects are tagged to the goal they serve and a red KPI opens an action, an A3 or a project. Your quarterly objectives and key results fit as the facility and team versions of those goals, measured by the same KPIs.

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