Lean Production Performance Metrics
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1 Lean Production Performance Metrics Course in Operations Management Prof. Sergio Cavalieri Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 1 HOW TO SELECT THE RIGHT INDICATORS HOW TO SELECT THE RIGHT INDICATORS? FACTORY OBJECTIVES LOGISTICS PLANNING MAINTENANCE PRODUCTION OBJECTIVES OBJECTIVES OBJECTIVES OBJECTIVES PRODUCTION PLANT OBJECTIVES PRODUCTION METRICS Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 2 1
2 MAIN PRODUCTION METRICS - - PRODUCTION YIELD - OVERALL YIELD - TECHNOLOGICAL RATE - SET-UP TIME - PARTS PER MILLION Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 3 DEFINITION BASE TIME: ALLOTTED TIME TO WORK/ASSEMBLE AN ITEM. THIS TIME REMAINS FIXED FOR THE ENTIRE REFERENCE PERIOD. CYCLE TIME: TIME ALLOTTED TO WORK/ASSEMBLE AN ITEM AS A RESULT OF AN IMPROVEMENT ACTIVITY. THIS TIME CAN BE CHANGED MORE THAN ONCE IN THE SAME REFERENCE PERIOD. Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 4 2
3 GOOD ITEMS * BASE TIME WORKING HOURS TYPOLOGIES: DIRECT DEPARTMENTAL TOTAL PLANT GLOBAL Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 5 DIRECT = GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT PERSONNEL MONITORS THE EFFICIENCY OF DIRECT LABOUR AND POSTS THE RESULTS ACHIEVED THROUGH THE CONTINUOUS IMPROVEMENT PROCESS SINGLE MACHINE SINGLE DEPARTMENT WHOLE PLANT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 6 3
4 DEPARTMENTAL GOOD ITEMS * BASE TIME = WORKING HOURS OF DIRECT + INDIRECT PERSONNEL MONITORS THE EFFICIENCY OF THE DEPARTMENT WORKFORCE AND POSTS THE RESULTS ACHIEVED THROUGH THE CONTINUOUS IMPROVEMENT PROCESS SINGLE DEPARTMENT E.G. forklift operators, supervisors, etc. Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 7 TOTAL PLANT = GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT + INDIRECT DEPARTMENTAL PERSONNEL + INDIRECT PLANT PERSONNEL MONITORS THE EFFICIENCY OF THE FACTORY WORKFORCE AND POSTS THE RESULTS ACHIEVED THROUGH THE CONTINUOUS IMPROVEMENT PROCESS WHOLE PLANT E.G. Quality control personnel, warehouse personnel, maintenance personnel,. Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 8 4
5 GLOBAL PRODUCTIVTY = GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT + INDIRECT DEPARTMENTAL PERSONNEL + INDIRECT PLANT PERSONNEL + WHITE COLLARS MONITORS THE EFFICIENCY OF THE OVERALL PLANT WORKFORCE AND POSTS THE RESULTS ACHIEVED THROUGH THE CONTINUOUS IMPROVEMENT PROCESS WHOLE PLANT E.G. personnel employed in offices (logistics, R&D, engineering, ) Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 9 PRODUTTIVITA' GLOBALE Produttività Reale Produttività Budget Produttività Reale progressiva Produttività Budget progressiva MONTHLY RESULTS ARE COMPARED WITH THE BUDGET OBJECTIVES TO VERIFY ANY DEVIATIONS dic-02 GEN FEB MAR APR MAG GIU LUG AGO SET OTT NOV DIC Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 10 5
6 MAIN SOURCES OF LACK OF GLOBAL CAN BE: LACK OF DIRECT IMPACT OF INDIRECT PERSONNEL OPERATING IN THE PRODUCTION DEPARTMENTS IMPACT OF WHITE COLLARS IMPACT OF MAINTENANCE PERSONNEL IMPACT OF QUALITY PERSONNEL IMPACT OF WAREHOUSE AND MATERIAL HANDLING PERSONNEL OTHERS (SECURITY, CLEANING STAFF, ETC..) Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 11 PARETO'S FAILURE OF CAUSES OF GLOBAL : graphical representation using histograms of the % weight of each hour because of lack of global productivity on hours of global presence. Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 12 6
7 PRODUCTION YIELD P.Y. = PRODUCTION YIELD GOOD ITEMS * CYCLE TIME WORKING HOURS PLANNED BREAKS MONITORS THE CORRECT MANAGEMENT OF EQUIPMENT THROUGH THE INVOLVEMENT OF OPERATORS SINGLE PLANT WHOLE DEPARTMENT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 13 PRODUCTION YIELD THEORETICAL PRODUCTION: (WORKING HOURS PLANNED BREAKS) / CYCLE TIME EFFECTIVE PRODUCTION: CUMULATIVE NUMBER OF GOOD PRODUCED ITEMS YIELD: EFFECTIVE PRODUCTION / THEORETICAL PRODUCTION Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 14 7
8 PRODUCTION YIELD EVERY GROUP OF OPERATORS COMPUTES THE PY AT THE END OF EACH SHIFT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 15 OVERALL YIELD O.Y.= OVERALL YIELD GOOD ITEMS * CYCLE TIME PLANT TOTAL OPENED HOURS TYPOLOGIES: OVERALL YIELD 24 HOURS OVERALL YIELD PLANNED HOURS Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 16 8
9 OVERALL YIELD OVERALL YIELD 24 HOURS = GOOD ITEMS * CYCLE TIME 24 HOURS MONITORS THE RATE OF USE OF EQUIPMENT SINGLE MACHINE WHOLE DEPARTMENT DAILY MONTHLY ON YEARLY BASE Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 17 OVERALL YIELD 24 HOURS Overall Yield April 2000 Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 18 9
10 OVERALL YIELD 24 HOURS MAIN SOURCES OF MISSED YIELD: 1. MISSED PLANNING 2. WEEKLY SUSPENSION 3. NATIONAL HOLIDAYS AND/OR COMPANY S CLOSURE 4. PLANNED MAINTENANCE 5. PLANNED PRODUCTION STOPS 6. SET UPS 7. BREAKDOWNS 8. PRODUCTION INEFFICIENCIES 9. MISSING OPERATOR 10.MISSING MATERIAL 11.OTHERS Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 19 OVERALL YIELD 24 HOURS CAUSES of FAILURE PARETO 24 HOURS: graphical representation using histograms of % weight of the hours of each cause on OVERALL number of hours Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 20 10
11 OVERALL YIELD PLANNED HOURS OVERALL YIELD PLANNED HOURS = GOOD ITEMS X CYCLE TIME OVERALL PLANNED HOURS OBIETTIVO: MONITORS THE RATE OF EFFICIENCY OF EQUIPMENT SINGLE MACHINE WHOLE DEPARTMENT DAILY MONTHLY ON YEARLY BASE Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 21 OVERALL YIELD PLANNED HOURS MAIN SOURCES OF MISSED YIELD: 1. PLANNED STOPS 2. SET UPS 3. BREAKDOWNS 4. PRODUCTION INEFFICIENCIES 5. MISSING OPERATOR 6. MISSING MATERIAL 7. OTHERS Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 22 11
12 OVERALL YIELD PLANNED HOURS CAUSES of FAILURE PARETO PLANNED HOURS: graphical representation using histograms of % weight of the hours of each cause on PLANNED number of hours Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 23 TECHNOLOGICAL RATE TECHNOLOGICAL RATE ASSIGNED TIME BEFORE IMPROVEMENT ACTIONS ASSIGNED TIMES AFTER IMPROVEMENT ACTIONS MONITORS THE DEGREE OF OPTIMIZATION OF A PRODUCTION PROCESS RELATED TO A MACHINE OR TO A PRODUCTION DEPARTMENT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 24 12
13 TECHNOLOGICAL RATE TECHNOLOGICAL RATE MACHINE = GOOD ITEMS X BASE TIME GOOD ITEMS X CYCLE TIME MONITORS THE DEGREE OF OPTIMIZATION OF TECHNICAL INSTALLATIONS SINGLE MACHINE DEPARTMENT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 25 TECHNOLOGICAL RATE TECHNOLOGICAL RATE PERSONNEL = GOOD ITEMS X BASE TIME X PERFORMANCE RATE GOOD ITEMS X CYCLE TIME X PERFORMANCE RATE MONITORS THE DEGREE OF ORGANIZATIONAL AND TECHNICAL OPTIMIZATION OF ASSEMBLY LINES SINGLE LINE ASSEMBLY DEPARTMENT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 26 13
14 SET-UP TIME SET-UP TIME= SET-UP HOURS NUMBER OF SET-UPS TRACKS THE AVERAGE SET-UP TIME AND THE DEGREE OF FLEXIBILITY OF INSTALLATIONS SINGLE MACHINE WHOLE DEPARTMENT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 27 P.P.M. = PARTS PER MILLION PPM SCRAPPED ITEMS X MILLION PRODUCED ITEMS MONITORS THE QUALITY PERFORMANCE AT ALL LEVELS OF THE PRODUCTION PROCESS FROM SUPPLIER UP TO THE END CUSTOMER, PASSING THROUGH ALL STAGES OF THE PRODUCTION PROCESS SINGLE MACHINE WHOLE DEPARTMENT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 28 14
15 GAINS ACHIEVED THROUGH INDUSTRIAL OPTIMISATION GAINED PERSONNEL HOURS = DIRECT X HOURS OF DIRECT PERSONNEL MONITORS THE GAIN OBTAINED BY OPTIMIZATION IN ASSEMBLY DEPARTMENTS SINGLE ASSEMBLY LINE ASSEMBLY DEPARTMENT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 29 GAINS ACHIEVED THROUGH INDUSTRIAL OPTIMISATION GAINED EQUIVALENT = MACHINE HOURS PLANTS X HOURS OF PLANNED HOURS MONITORS THE GAIN OBTAINED THROUGH INDUSTRIAL OPTIMIZATION OF MACHINING DEPARTMENTS SINGLE MACHINE WHOLE DEPARTMENT Università degli Studi di Bergamo 2011 Pof. Sergio Cavalieri 30 15
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