Performances mesurament

Outline

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Performance measurement

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Definitions

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Synthetically:

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Example

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1-Delivery lead time to produce a product with a quality ok = external performance that can be measured by the client

3-Percentage of waste intercepted by quality control = internal performance of interest for the firm

2-Level of machines obsolescence = operative condition

Performance measurement system design

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Performance measurement system design

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Performance measurement system design

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Performance framework

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•  The fundamental objective is to evaluate at the same time:

EFFECTIVENESS

in serving the “client”

EFFICIENCY

in using the resources

To manage industrial production effectively, we need the capability to measure and control the performances of the logistic-production system, as this is the way to reach a

high profitability.

Performance framework

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The general framework

SERVICE

Assistance pre-sales

post-sales

Accuracy

Punctuality

Customization

Availability

Timeliness

Plans flexibility

Volume flexibility (elasticity)

Product flexibility

FLEXIBILITY

QUALITY

Compliance in field

Project quality

PRODUCTIVITY

In house compliance

(waste)

Materials (direct, indirect) Capital (fixed, circulanting)

Workforce (direct, indirect) Machines

Mix flexibility

Availability

More that “Performances” it is fundamental to measure the “components” (or the

“determinants”)

The measurement of internal performances

Efficiency (or productivity) performance

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Productivity

Productivity of production resources

Warehouses productivity

Workforce

Plants

Stock turnover and covering

ABC-ABC analysis

Materials

Availability and potentiality

Internal performances

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The reference framework for internal performances

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Solar T

Opening T

Theor. use T.

Actual use T.

Actual prod. T

Cutting T

Good prod. T

(1) (2) (3) (4) (5) (6)

Ts T

TGP TSP

TS TTest

Tbreak + TMaint

TO

TLO TLM

TST (3)/(2) = availability (4)/(1) = use

Availability

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TOTSTTLMTLOTTMaTBreakTOTSTTLMTLOTA

−−−−

−−−−−−=

int

Production potentiality

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Potentiality

Theoretical Pt

Mix Pmix

Ideal production conditions: only one product and standard

condition of production rate

Real conditions: mix of many products, different

production rates depending on the product

that is produced

The potentialities

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Mix Potentiality

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requiredTimeproducedQuantity

Pmix =

Mix Potentiality

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!!

( )∑∑

++

+=

i ii TSTSpTGp

QPmix

)SP(QGP * )/RS(RS iiik

Exercise

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Product 1 Product 2 QGP1 500.000 Unit QGP2 480.000 Unit QSP1 16.000 Unit QSP2 2.400 Unit Rs1 800 Unit/hours Rs2 600 Unit/hours TGp1 625 Hours TGp2 800 Hours TSp1 20 Hours TSp2 4 Hours

TS 40 Hours

( )∑∑

++

+=

i ii TSTSpTGp

QPmix

)SP(QGP * )/RS(RS iiik

Standard available capacity

( )TLoTstTtestTAPmixPCA −−−⋅⋅=

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Productivity measures

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Input Output

P = OutputInput

Productivity measures

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Productivity = Production volume (expressed in a certain unit of measurement)

Level of use of a certain production factor

Material Productivity

Machine productivity

Workforce productivity

Productivity measures

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Productivity measures

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TTTest-TMaint-TBreak-TO-TST-TLM-TLO-T=U

TTS+TSP+TGP=U

USE (U) = ACTUAL PRODUCTION TIME OPENING TIME

Productivity measures

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PAID HOURS ACTUAL PRODUCTION TIME = (U) USE

TTTest-TMaint-TBreak-TO-TST-TLM-TLO-T=U

TTS+TSP+TGP=U

Productivity measures

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The concept of standard time is fundamental.

( )[ ]( )[ ]∑

∑TS + TSP + TGP

TS + TSP + TGP =

ii

iiη The concept of

standard time is fundamental

ACTUAL PRODUCTION HOURS Actual Production in std. hours = η

TGPi

Productivity measures

factor PRODUCTIVITY USE YIELD

WF hours paid volumeproduced

h. paid

h. workedactual h. workedactual

std. h.in vol.

MAC cap. installed volumeproduced

h. openingh. prod act.

h. prod. actualstd. h.in vol.

MAT used mater. volumeproduced

consum. actualconsum. theor.

consum. theor.materialin vol.

P (productivity)= U*η

PCA= Pmix*T*(U*η)

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