Post on 13-Oct-2015
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Visual PerformanceBoards
Visual Controls in the LeanFactory
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Industrial Solutions, Inc.
What Do We Need to
Measure
Not everything that can be counted counts, and noteverything that counts can be counted
Albert Einstein
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Industrial Solutions, Inc.
Outline
Why do we need to measure
What do we need to measure
What is different from traditionalmeasures
Examples of visual boards andtheir use
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Industrial Solutions, Inc.
Why Do We Need To Measure?
!What you measure is what you get.
!
Measurements drive peoples behavior.!People need rapid and relevantfeedback.
!Measurements track progress towardsplanned goals.
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Measures Drive
ImprovementA lean transformation that is driven by
top management must be guided by a set
of performance measures thateffectively link daily performance to the
top level goals of the business
enterprise.
But, you have to measure the right things!
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Performance Measures
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Industrial Solutions, Inc.
What is the Right Thing to
Measure
Simple measures that people
understand
Measures that are rapid and
timelyMeasures that drive continuous
improvement
Basic Principles
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Industrial Solutions, Inc.
Three Levels of Measurements
To empower the cell teams to monitorand control their production activities
in support of the value stream
objectives.
To guide the Value Streamcontinuous improvement team in
executing company strategies andachieving objectives.
To enable senior managers of thecompany to monitor theachievement of strategic goals.
Cell LevelMeasurements
Value Stream LevelMeasurements
StrategicPerformance
Measures
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Strategic Measures
Revenue
Profits
Quality
Customer Service
Workforce
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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.
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Industrial Solutions, Inc.
Value Stream Starter Measurements
Support Measures
OEE at the ConstraintCell
Average Projects per
Person
Average Cross-Trainingper Person
Number of SafetyIncidents
Primary Measures
Units per Person
On-Time Delivery
Dock-To-Dock Time
First Pass Yield
Average Cost per UnitShipped
Accounts Receivable
Days OutstandingValue Stream Gross ProfitPercentage
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Industrial Solutions, Inc.
Value Stream Starter SetMeasure Weekly...
"Value Stream Gross Profit
"Average Cost per Unit Shipped
"Accounts Receivable DaysOutstanding
"Units per Person
"Order-to-Dock Time
"First Pass Yield
"On-Time Delivery
"Value Stream Support Measures
FinancialPerspective
Customer ValuePerspective
Operations
Perspective
OrganizationPerspective
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Industrial Solutions, Inc.
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Manufacturin Cell
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Industrial Solutions, Inc.
Cell Starter Measurements
Support Measures
Cross Training Chart
Safety Cross
5S Audit
Number of
Improvement ProjectsCompleted
Primary MeasuresHourly Production
Days of Inventory
WIP to SWIP
Operational EquipmentEffectiveness (OEE)
First Pass Yield
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Industrial Solutions, Inc.
Outline
Why do we need to measure
What do we need to measureWhat is different from traditionalmeasures
Examples of visual boards andtheir use
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Industrial Solutions, Inc.
Lean: a New Model for PerformanceMeasurement
SHIFT
Traditional Lean
Focus onLowestProduct
Cost
Focus onMaximizing
Value StreamProfitability
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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
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Industrial Solutions, Inc.
Compare the Differences
ASSUMPTION: Profit comes from maximizing flow based oncustomer pull.
Lean Thinking
MEASUREMENT: Throughput
WHAT IS IMPORTANT: Flow according to customer pull
BEHAVIOR: Eliminate barriers to flow
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Industrial Solutions, Inc.
Comparing Assumptions
Profit comes from fullutilization of resources
Direct labor is the mostimportant conversion cost
Control the business thru
detailed tracking
All excess capacity is bad
Traditional Assumptions
Profit comes frommaximizing flow on pull fromcustomers.
Waste impedes the flow
Control thru continuous
attention to flow & waste
Excess capacity providesflexibility
Lean Assumptions
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Increased Sales Revenue
Value to the customer
Value streams
Flow & pull from thecustomers
Team structure and individualempowerment, 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 ImportantTraditional Thinking Lean Thinking
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Labor efficiency &machine utilization
Cost variances vs.standard
Budget adherence
Direct labor as % ofsales
Cycle time
Throughput
First time quality
Inventory Turns
Delivery to customer
Value stream focus
Comparing MeasurementsTraditional
Measurements
Lean
Measurements
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Industrial Solutions, Inc.
Make more product
Utilize resources to themax
Optimize departmentefficiencies
Track direct labor indetail
Allocate other costs
Eliminate barriers to flow
Focus on value streamsrather than departments
Continuousimprovement and team-work
Eliminate waste,inventory, and over-production
Comparing BehaviorsTraditional Behaviors Lean Behaviors
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Value Stream Measures FocusCell-Level Continuous Improvement
Value Stream Performance
Measure Resultsagainsttarget
Provide focus for useof Lean tools at cell
level
Understandpatterns and
trends
Define thecauses of the
trends
Gap
Cell
Action
Cell
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Industrial Solutions, Inc.
Primary Cell Measurements
! Enable the cell production team tomonitor and control their primaryproduction activities.
! Facilitate the collection of problemsand issues arising from production.
! Provide first-line data for analysis bythe cell team or front linemanagement.
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Outline
Why do we need to measure
What do we need to measureWhat is different from traditionalmeasures
Examples of visual boards andtheir use
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Industrial Solutions, Inc.
Performance Boards
A visual means to showcurrent status of operations
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b th R t
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Day by the Hour Report!Measures adherence to production schedule.
"Constantly reinforces the need to achieve consistentcycle 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 endof each hour, the cumulative quantity for the day, and anycomments or reasons.
"At the end of each shift, cell supervisor calculatespercentage completed in comparison to schedule.
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Linking Cell Objectives toCell Measurements
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Performance Boards on the
Line
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5/24/2018 Visual Performance Boards
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AdditionalInformation
Weekly dataMonthly trend linesImprovement plans
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Keys to Success
The culture has to be ready
Work has to be standardized
The people have to believe in thenumbers
Management has to look at the dataevery day
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Thank You.For Information visit
www.isiworld.net
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