Beyond Silo Targets for Interdependent KPI Goal Setting: Empirical Evidence of Conflicting-Metric Practice, Barriers, and Organizational Archetypes

Abstract

Business Performance Management (BPM) systems treat key performance indicators (KPIs) as independent objectives despite well-documented operational interdependencies between lead times, cost, inventory investment, and customer service level. These trade-offs are routinely ignored during goal setting, resulting in misaligned incentives, functional silos, jointly unattainable targets, and degraded system-wide performance.
A cross-sectional mixed-method survey of 64 supply chain professionals reveals a prevalent trade-off awareness gap: while 51.6% of respondents pursue simultaneous improvement across efficiency, inventory, and customer delivery performance, only 12.5% explicitly model the trade-offs between them—a 39.1-percentage-point disconnect. A structural setter–owner mismatch exists in 89.1% of organizations, with capacity utilization cited by only 9.4% of respondents as an input to delivery goals. Inferential tests confirm that integration and trade-off awareness are positively associated with performance and negatively associated with dysfunction. Principal component analysis and Ward's hierarchical clustering identify three organizational archetypes: Silo-Driven (56.3%), Aspirational (15.6%), and Trade-Off Aware (28.1%).
Thematic analysis of open-ended responses points to four practitioner-identified remedies: better integrated planning, analytical feasibility-checking tools, executive education, and shared KPI ownership. The paper concludes that the core problem is not awareness that trade-offs exist, but the absence of analytical structures and decision support systems to enforce joint KPI attainment.