Performance Measurements
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Manufacturing Training
Modules |
MRP
vs. Lean Manufacturing Simulation
Game |
PART IV.
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Exploit the Interdependence of the Measures No longer would one measure be unknowingly sub-optimized at the expense of another. By placing all five measures on one sheet, it was possible to see the full effects of operations decisions and process changes, and thereby enable them to become better in the future. If, for example, a traditional trade-off based solution was used to improve delivery and cycle solely by expediting and working overtime, then a corresponding erosion of quality and cost performance would likely be observed. If, however, a process improvement approach was employed that removed queues and non-value-added activities, simultaneous increases in the performance of multiple measures would be observed rather than the usual degradation in some of the others. The term "balanced" was chosen to describe this phenomenon—that each measure either affects or is affected by the other measures. They Are Additive Except for the cycle times that are not on the critical path and the delivery measure, the sum of the parts would equal the whole. This bottoms-up approach permitted the inclusion of items not contained in the existing summary reports and afforded an audit trail capability. It also advanced the guideline that anomalous data should not be excluded, but rather it should be explained. Present the Information to Stimulate Action Trend lines of actual and planned performance would be displayed on the graphs. If prior performance was lacking, this would focus improvement efforts on the convergence of the two lines. Even if the actual trend was better than the planned trend, the expectations for continuous improvement would require that the slope be maintained with still further process enhancements. Measures at Various Levels Besides the criteria just discussed, there were two user requirements that remained: provide an answer to "where is improvement needed most?" and provide all the process owners (from vice president to first line supervisor) with their own measures. The team concluded that by creating measures at several levels, both of these requirements could be satisfied. It was reasoned that a measure at one level could also serve as a diagnostic for the measure at the next higher level. This insight caused a search for a common base upon which to build all the levels. Through an initial analysis, however, it was learned with disappointment that Quality and Cost had been based on department, Inventory on stocking location, and Cycle/Delivery on a scheduling convention taken from the master plan. The team decided to construct a matrix that contained all the known feasible bases, and then use it to determine if any possessed a one-to-one correspondence with each of the five measures. The exercise revealed that only the Production Routings met the test; so the measures were uniformly redefined to this new singular base. The rollup to successively higher levels was accomplished largely with the aid of the Bill of Material (BOM). The Production Routings (level D) summarized into Assemblies (level C), then into Work Centers (level B), and finally into the flyaway Aircraft (level A). The choice of the BOM was also fortunate because the management hierarchy tended to mirror this framework. It was speculated that measures at a given level could be shared by the two adjacent management layers, which might facilitate coaching sessions during their joint reviews. To be Continued STAY CONNECTED To stay current on bullet-proofed manufacturing solutions, subscribe to our free ezine, "The Business Basics and Best Practices Bulletin." Simply fill in the below form and click on the subscribe button. We'll also send you our free Special Report, "Five Change Initiatives for Personal and Company Success." Your
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