Upload
osman
View
47
Download
0
Embed Size (px)
DESCRIPTION
Performance Measurements. Lean reporting & control. Lean Performance Measurements. Measurements that motivate people to lean improvement. Measurements that provide excellent operational control. Measurements that reflect the business strategy of the company at every level. - PowerPoint PPT Presentation
Citation preview
© BMA Inc. 2008. All rights reserved.
Lean reporting & control
Performance Measurements
© BMA Inc. 2008. All rights reserved.
Lean Performance Measurements• Measurements that motivate
people to lean improvement.
• Measurements that provide excellent operational control.
• Measurements that reflect the business strategy of the company at every level.
• Measurements that are lean themselves & can be gathered and reported simply and easily.
© BMA Inc. 2008. All rights reserved.
Use Measures for Learning and Problem Solving
• Concerned with results and the process of getting those results
• Responsibility oriented, derives from role
• Reveals problems, so that they can be fixed and kept from recurring
• Feedback loops to drive problem solving, measure improvement and foster learning
• Focus on checking the process, control of resources and development of people; results derived from adhering to process standards
• Results oriented
• Top-down control; authority oriented
• Hides problems
• One shot image of success in reaching target—no feedback
• Focus on control of resources, people and results
Lean UseTraditional Use
© BMA Inc. 2008. All rights reserved.
Customer Value is Deployed and Managed Continuously
Customer Needs
Strategy Changes
Technology Changes
Stakeholder Needs
Value Stream Measurements
Cell Level Measurements
Hoshin Strategy Deployment
Sales & Operations Planning
© BMA Inc. 2008. All rights reserved.
Cell Measurements
Value Stream Measurements
Plant Measurements
Three Levels of Performance Measurements
Enable the cell teams to monitor and control their own production activities.
Guide the continuous improvement team in their “pursuit of perfection” activities.
Enable senior managers of the company to monitor the achievement of strategic goals & initiate strategy changes.
© BMA Inc. 2008. All rights reserved.
“Starter Set” of Performance Measurements for Lean Mfg.
Increase Cash Flow
Increase sales & market share
Continuous improvement culture
Provide Customer value
Sales Growth
Cash Flow from Operations
Inventory Days
On-Time Delivery
Customer satisfaction
Sales per Employee
Sales per Person
On-Time Delivery
Dock-to-Dock Time
First Time Through
Average Cost per Unit
Day-by-the-Hour Production
WIP-to-SWIP
First Time Through
Operational Equipment Effectiveness
STRATEGICISSUES
STRATEGICMEASURES
VALUE STREAM MEASURES
CELL/PROCESS MEASURES
© BMA Inc. 2008. All rights reserved.
Performance Measurement Linkage ChartOrder Fulfillment Value Stream
© BMA Inc. 2008. All rights reserved.
Performance Measurement Linkage Chart
This picture shows a linkage chart developed during an actual kaizen; post-it notes are used on paper. This makes repositioning and changing chart components flexible and easy.
© BMA Inc. 2008. All rights reserved.
Plant or Division Measurements
Sales Growth Cash Flow from Operations
Are we generating enough cash? Inventory Days
General indicator of lean improvement On-Time Delivery
Measurement of control and meeting customer delivery needs
Customer Satisfaction Direct feedback from the customers
Sales per Employee Overall productivity
© BMA Inc. 2008. All rights reserved.
Typical Production Value Stream Performance Measurements• Sales per Person
– Productivity of everyone in the value streams
• On-Time Shipment– Can we ship on-time?– Are our processes under
control?
• Dock-to-Dock Days– Rate of material flow through
the value stream– Raw material, WIP, finished
goods
• First Time Thru– Quality & standardized work
for the entire value stream
• Average Cost per Unit– Are we reducing costs and
making improvement?
• Supporting measurements– Safety cross– Cross training matrix– Continuous improvement
projects
© BMA Inc. 2008. All rights reserved.
Value Stream Continuous Improvement Board
Sales or Units per Person
On-Time Shipment
First Time Through
Dock-to-Dock Days
Average Cost
Pareto Chart
(or other analysis)
Pareto Chart
(or other analysis)
Pareto Chart
(or other analysis)
Pareto Chart
(or other analysis)
Pareto Chart
(or other analysis)
ProductivityProcessControl Quality
MaterialFlow Cost
Improvement Projects
Improvement Projects
Improvement Projects
Improvement Projects
Improvement Projects
Current Value
Stream Map
Future Value
Stream Map
Value Stream Income
Statement
BOX SCORE
Transition Plan
© BMA Inc. 2008. All rights reserved.
Value Stream Performance Measurements Board
Hoshin
KaizenAction Plan
BusinessOpportunityCharts
Value Stream Maps
© BMA Inc. 2008. All rights reserved.
Value Stream Board“Business Opportunity Chart”
Four Charts in OnePerformance Measurement, Pareto Chart, Data, Action Plan
© BMA Inc. 2008. All rights reserved.
Value Stream Performance Measurements Board
© BMA Inc. 2008. All rights reserved.
Value Stream Continuous Improvement
• The primary purpose of the weekly reporting is to guide the value stream manager and his/her team towards continuous improvement.
• Tools– Value stream performance measurement
boards– Value stream income statement– Box Score– Pareto charts– Continuous improvement projects
© BMA Inc. 2008. All rights reserved.
Typical Cell Performance Measurements• Day-by-the-Hour
– Focus on making to takt time– Linearity of production
• First Time Thru– Focus on making perfect
quality without scrap or rework
– Focus on standardized work• WIP-to-SWIP
– Work-in-process inventory compared to standard work-in-process inventory
– Focus on consistency of flow– Focus on the pull process
• Operational Equipment Effectiveness– Focus on machines making to
takt time– Bottleneck operations
• Supporting measures or reporting– Safety cross– 5S audit– Cross-Training matrix– Daily improvement
projects
© BMA Inc. 2008. All rights reserved.
Support Measurements
• In addition to the primary measurements many companies also collect some supporting information at the cell.
– Safety Cross– Cross-Training Chart– 5S Audit or Self-Audit– Number of Continuous Improvement Projects
Completed
© BMA Inc. 2008. All rights reserved.
The Key to Effective Cell Performance Measurement
Managers and support people frequently visiting the cells and solving problems.
The focus must be on the value-creating processes.Making what the customers want, on-time & perfect quality.
© BMA Inc. 2008. All rights reserved.
Cell Measurement Board
© BMA Inc. 2008. All rights reserved.
Cell Measurement Cube
© BMA Inc. 2008. All rights reserved.
Cell Measurement Board
© BMA Inc. 2008. All rights reserved.
Example Day-by-the-Hour Board
© BMA Inc. 2008. All rights reserved.
How Do Performance Measurements Apply in Support & Administration?
Administrative Process Measures
•Productivity of the process
•On-Time Delivery (to internal customers
•Rate of Flow of information through process
•First Time Thru of the process
•Average Cost per Unit
We use similar measurement methods in the office & administrative processes.
Administrative Cell Measures
• Day-by-the-Hour
• First Time Thru
• WIP-to-SWIP of the cell
• Operational Equipment Effectiveness of machines in the cell
Sales/Marketing Value Streams Measurements
Increase Sales & Market Share
Increase Cash Flow & Reduce
Debt
Create Culture of Continuous Improvement
Maintain Stable & Educated Workforce
STRATEGIES
Sales Growth
STRATEGICMEASUREMENTS
Increase Sales & Profitability
VALUE STREAMGOALS
VALUE STREAMMEASUREMENTS
Sales Growth
Cash from Operations
Inventory Days or Turns
Customer Satisfaction
Sales per Employee
Suggestions per Person
% People Engaged in
Improvement
Annual Employee
Survey
Increase Number of Customer
Match Sales to Value Stream Capabilities
Improve Productivity
Collect Cash Quickly
Increase CI Project
Participation
Provide Advancement for Employees
Eliminate Accidents &
Injuries
Customer Satisfaction
Order to Cash Days
Profitability of Order Fulfillment
Value Streams
Value Stream Cost per Sales $
Accounts Receivable Days
# People on Improvement
Teams
Cross Training per Person
Number of Accidents &
Injuries
Sales/Marketing Value Stream: Quote ProcessVALUE STREAM
MEASUREMENTS
Sales Growth
Customer Satisfaction
Order to Cash Days
Profitability of Order Fulfillment
Value Streams
Value Stream Cost per Sales $
Accounts Receivable Days
# People on Improvement
Teams
Cross Training per Person
Quote Success Rate %
Financial Contribution of
the Orders
First Time Through%
Average Quote Response Time
PROCESSMEASUREMENTSCELL GOALS
CELL CRITICAL SUCCESS FACTORS
Understand Customer Value
Meet or Exceed Customer
Expectations
Fast & Effective Processes
Obtain orders matching
capacity & mix
Eliminate waste
Increase quote success by
understanding needs
Maximum market price based on value
Provide quotes quickly & to
customer format
Effective visual management
Standardized work for quote processes
Eliminate variability
Linearity of Sales Orders
Track Improvement
Projects
5S Audit
Cross Training Chart
Widespread Cross Training
Increase CI Project
Involvement
Increase Training &
Cross Training
Empowered continuous
improvement
Strategic and NPD Value Streams Measurements
Increase Sales & Market Share
Increase Cash Flow & Reduce
Debt
Create Culture of Continuous Improvement
Maintain Stable & Educated Workforce
STRATEGIES
Sales Growth
STRATEGICMEASUREMENTS
Introduce High Value Products
VALUE STREAMGOALS
VALUE STREAMMEASUREMENTS
Sales from New Products
Cash from Operations
Inventory Days or Turns
Customer Satisfaction
Sales per Employee
Suggestions per Person
% People Engaged in
Improvement
Annual Employee
Survey
Short & Reliable Product Design
Processes
Match Products to Value Stream
Capabilities
Improve Productivity
Create Unique & Innovative Products
Increase CI Project
Participation
Provide Advancement for Employees
Eliminate Accidents &
Injuries
On-Time Design Projects
Customer Satisfaction with
New Products
Profitability of Order Fulfillment
Value Streams
Value Stream Cost per New
Product Sales $
Number of Patents &
Innovations
# People on Improvement
Teams
Cross Training per Person
Number of Accidents &
Injuries
© BMA Inc. 2008. All rights reserved.
Watlow Controls, Winona MNDoug Kuchta, Value Stream Manager
Value Stream Measurement Boards
© BMA Inc. 2008. All rights reserved.
Wrap up: the lean performance measurements “challenge:”• Replace the traditional cost accounting
measurements with performance measurements that are designed to motivate and monitor lean behavior.
• Develop a set of measurements throughout the organization that thoroughly reflect the company’s strategy and goals.
• As people work to improve the measurement results, they will be actively working to achieve the company’s strategic goals.