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	Performance Benchmarking Part 1 of 5
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	To succeed, repetitive, flow, JIT, and lean manufacturers must measure several operating characteristics that are not appli­cable to discrete/job shop manufacturers. We present the most important of those metrics using a 5-point scale for each, with 1 indicating "worst in class" and 5 indicating world-class performance. We use a spreadsheet or presentation graphic such as figure 1 to quickly show how well the com­pany is doing in each of the metrics. The graphic is much more effective in color, with the bottom rectangle (below the 1) in red, the next rectangle up (the area between 1 and 2) in orange, the middle rectangle in yellow, the next higher rectangle in light green, and the top rectangle in bright green. This paper is on metrics most appropriate for repetitive manufacturers. Since people and organizations tend to act in ways that will produce the rewards they want, or avoid the penalties they don't want, an organization's primary metrics usually reinforce the behaviors of the organization. The term "repetitive" is used throughout this paper to denote repetitive methodologies. The statements also apply to flow, JIT, and lean manufacturing practices. BACKFLUSHING Backflushing is a post-deduction method of inventory relief. Repeti­tive manufacturers typically record parts counts at count points, or pay points, in the manufacturing flow. The computer relieves component inventory by multiplying the count of items that pass the pay point by the BOM component quantities. Most repetitive manufacturers find that backflushing improves inventory accuracy levels. 1 No backflushing of work-in-process inventory is performed. All material issues, counts, and inventories are done by hand. 2 Understand concepts of backflushing and have identified count points for routings. 3 Backflushing being used—either material or labor (or both) in some places. 4 Majority of items utilizes backflushing. 5 Full—all possible material issues and labor cost are done by back-flushing. BLANKET ORDERS/RELEASES Blanket orders are essential to smooth manufacturing operations. As lot sizes decrease, it is not cost-effective or even feasible to issue a new purchase order for each material delivery. Blanket orders allow for a partnering between manufacturer and supplier. Commitments are made for volumes, pricing, and delivery terms. 1 No blankets/no releases—all onetime purchases, with quotations from three suppliers for each purchase. 2 Blanket orders are in place. Releases are made and delivered in monthly quantities. 3 Blanket orders are in place; releases are made electronically via electronic data interchange (EDI). Raw material inventory is deliv­ered on a weekly basis. 4 Blanket orders are in place, releases are made electronically via EDI, and deliveries are made based on kanbans, daily releases, or by agreed-upon inventory reorder point levels. 5 Full blanket/release for virtually all materials for use in manufac­turing process. Extensive use of blanket/release process for most maintenance and office items. CULTURE (REPETITIVE) A company's culture is a primary cause of success or failure for the repetitive effort. The culture can be changed through education and training and by changing the way in which job performance is mea­sured (using the metrics described in this paper, rather than the tradi­tional discrete metrics). The culture can be characterized as follows: 1 "We're a job shop—repetitive doesn't belong here." 2 Curiosity on what repetitive is and can do, starting to get educated. 3 Understand repetitive and planning to implement. 4 Implementing repetitive on pilot basis, changing metrics to support repetitive. 5 Management and workers fully support repetitive approaches and are committed to continuous improvement. To Be Continued STAY CONNECTED To stay current on Lean Management Basics and Best Practices, subscribe to our weekly MBBP Bulletin... and we'll send you our PowerPoint presentation "How to Survive in an Entirely New Economy."  All at no cost of course.  First Name: Your E-Mail:  Your personal information will never  be disclosed to any third party. privacy policy Here's what one of our 13,000 plus subscribers wrote about the MBBP Newsletter: "Great manufacturing articles. Thanks for the insights. I often share portions of your articles with my staff and they too enjoy them and fine aspects where they can integrate points into their individual areas of responsibilities. Thanks again."                Kerry B. Stephenson. President. KALCO Lighting, LLC "Back to Basics" Training for anyone ... anywhere ... anytime Business Basics, LLC 6003 Dassia Way, Oceanside, CA 92056 West Coast: 760-945-5596  © 2001-2009 Business Basics, LLC