Visual Performance

Boards
Visual Controls in the Lean
Factory
Industrial Solutions, Inc.
What Do We Need to
Measure
Not everything that can be counted counts, and not
everything that counts can be counted
Albert Einstein

Industrial Solutions, Inc.
Outline
Why do we need to measure
What do we need to measure
What is different from traditional
measures
Examples of visual boards and
their use
Industrial Solutions, Inc.
Why Do We Need To Measure?
!
What you measure is what you get.
!
Measurements drive peoples behavior.
!
People need rapid and relevant
feedback.
!
Measurements track progress towards
planned goals.
Industrial Solutions, Inc.
Measures Drive
Improvement
A lean transformation that is driven by
top management must be guided by a set
of performance measures that
effectively link daily performance to the
top level goals of the business
enterprise.
But, you have to measure the right things!
Performance Measures
Industrial Solutions, Inc.
What is the Right Thing to
Measure
Simple measures that people
understand
Measures that are rapid and
timely
Measures that drive continuous
improvement
Basic Principles
Industrial Solutions, Inc.
Three Levels of Measurements
To empower the cell teams to monitor
and control their production activities
in support of the value stream
objectives.
To guide the Value Stream
continuous improvement team in
executing company strategies and
achieving objectives.
To enable senior managers of the
company to monitor the
achievement of strategic goals.
Cell Level
Measurements
Value Stream Level
Measurements
Strategic
Performance
Measures
Industrial Solutions, Inc.
Strategic Measures
Revenue
Prots
Quality
Customer Service
Workforce
Industrial Solutions, Inc.
Value Stream
Value stream: The set of all the specific actions
required to transform a specific product from receipt
of order to the hands of the customer.
Industrial Solutions, Inc.
Value Stream Starter Measurements
Support Measures
OEE at the Constraint
Cell
Average Projects per
Person
Average Cross-Training
per Person
Number of Safety
Incidents
Primary Measures
Units per Person
On-Time Delivery
Dock-To-Dock Time
First Pass Yield
Average Cost per Unit
Shipped
Accounts Receivable
Days Outstanding
Value Stream Gross Profit
Percentage
Industrial Solutions, Inc.
Value Stream Starter Set
Measure Weekly...
"
Value Stream Gross Prot
"
Average Cost per Unit Shipped
"
Accounts Receivable Days
Outstanding
"
Units per Person
"
Order-to-Dock Time
"
First Pass Yield
"
On-Time Delivery
"
Value Stream Support Measures
Financial
Perspective
Customer Value
Perspective
Operations
Perspective
Organization
Perspective
Industrial Solutions, Inc.
Manufacturing Cell
Industrial Solutions, Inc.
Cell Starter Measurements
Support Measures
Cross Training Chart
Safety Cross
5S Audit
Number of
Improvement Projects
Completed
Primary Measures
Hourly Production
Days of Inventory
WIP to SWIP
Operational Equipment
Effectiveness (OEE)
First Pass Yield
Industrial Solutions, Inc.
Outline
Why do we need to measure
What do we need to measure
What is different from traditional
measures
Examples of visual boards and
their use
Industrial Solutions, Inc.
Lean: a New Model for Performance
Measurement
SHIFT
Traditional Lean
Focus on
Lowest
Product
Cost
Focus on
Maximizing
Value Stream
Profitability
Industrial Solutions, Inc.
Compare the Differences
ASSUMPTION: Profit comes from full utilization of resources
Traditional Measurements
MEASUREMENT: Labor efficiency & machine utilization
BEHAVIOR: Make more product in all cases
WHAT IS IMPORTANT: Full utilization of resources
Industrial Solutions, Inc.
Compare the Differences
ASSUMPTION: Profit comes from maximizing flow based on
customer pull.
Lean Thinking
MEASUREMENT: Throughput
WHAT IS IMPORTANT: Flow according to customer pull
BEHAVIOR: Eliminate barriers to flow
Industrial Solutions, Inc.
Comparing Assumptions
Profit comes from full
utilization of resources
Direct labor is the most
important conversion cost
Control the business thru
detailed tracking
All excess capacity is bad
Traditional Assumptions
Profit comes from
maximizing flow on pull from
customers.
Waste impedes the flow
Control thru continuous
attention to flow & waste
Excess capacity provides
flexibility
Lean Assumptions
Industrial Solutions, Inc.
Increased Sales Revenue
Value to the customer
Value streams
Flow & pull from the
customers
Team structure and individual
empowerment, accountability
System quality
Pursuit of perfection
Full utilization of resources
Cost per Part
Overhead absorption
Batch and Queue
Inventory valuation
Departmental structure and
individual efficiency
Product quality
Pursuit of budget
Comparing What Is Important
Traditional Thinking Lean Thinking
Industrial Solutions, Inc.
Labor efficiency &
machine utilization
Cost variances vs.
standard
Budget adherence
Direct labor as % of
sales
Cycle time
Throughput
First time quality
Inventory Turns
Delivery to customer
Value stream focus
Comparing Measurements
Traditional
Measurements
Lean
Measurements
Industrial Solutions, Inc.
Make more product
Utilize resources to the
max
Optimize department
efficiencies
Track direct labor in
detail
Allocate other costs
Eliminate barriers to flow
Focus on value streams
rather than departments
Continuous
improvement and team-
work
Eliminate waste,
inventory, and over-
production
Comparing Behaviors
Traditional Behaviors Lean Behaviors
Industrial Solutions, Inc.
Value Stream Measures Focus
Cell-Level Continuous Improvement
Value Stream Performance
Measure Results
against
target
Provide focus for use
of Lean tools at cell
level
Understand
patterns and
trends
Define the
causes of the
trends
Gap
Cell
Action
Cell
Industrial Solutions, Inc.
Primary Cell Measurements
!
Enable the cell production team to
monitor and control their primary
production activities.
!
Facilitate the collection of problems
and issues arising from production.
!
Provide rst-line data for analysis by
the cell team or front line
management.
Industrial Solutions, Inc.
Outline
Why do we need to measure
What do we need to measure
What is different from traditional
measures
Examples of visual boards and
their use
Industrial Solutions, Inc.
Performance Boards
A visual means to show
current status of operations
Industrial Solutions, Inc.
Day by the Hour Report
!
Measures adherence to production schedule.
"
Constantly reinforces the need to achieve consistent
cycle time to match customer takt time.
!
Shows adherence to the production
requirement for the cell for each hour.
"
Can be expressed as a quantity for the hour (#/hr)
and/or as a cumulative quantity for the shift. (#/shift)
!
How to calculate:
"
Cell supervisor records the quantity completed at the end
of each hour, the cumulative quantity for the day, and any
comments or reasons.
"
At the end of each shift, cell supervisor calculates
percentage completed in comparison to schedule.
Industrial Solutions, Inc.
Linking Cell Objectives to
Cell Measurements
Cell Objectives Measurement
Reduce/Standardize Cycle Time
Day-by-the-hour
WIP to SWIP, OEE
Build to Schedule Day-by-the-hour
Eliminate Variability, Scrap,
rework
First Pass Yield
Eliminate Machine Waste OEE
Reduce Batch Size Inv Days or WIP to SWIP
Visual Management
Inv Days
5-S or Self Audit
Performance Boards on the
Line
Industrial Solutions, Inc.
Performance Board Detail
Additional
Information
Weekly data
Monthly trend lines
Improvement plans
Industrial Solutions, Inc.
Industrial Solutions, Inc.
Industrial Solutions, Inc.
Industrial Solutions, Inc.
Industrial Solutions, Inc.
Keys to Success
The culture has to be ready
Work has to be standardized
The people have to believe in the
numbers
Management has to look at the data
every day
Thank You.
For Information visit
www.isiworld.net