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	Performance Benchmarking Part 5 of 5
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	SCHEDULING—RATE-BASED Discrete manufacturing companies schedule work orders. Repetitive companies schedule using rate-based approaches that emphasize pro­ducing the same items or families at specified rates (e.g., 100 product "x" per day). The best schedules leave a small capacity buffer at the end of each shift to ensure that schedules will indeed be met (see Sched­ule Attainment, above) and to allow time for training and continuous improvement activities. 1 Work orders with large quantities, lots of back orders, and daily hot sheet. 2 Work orders with few back orders and a daily hot sheet (with fewer hot items). 3 Kanbans on some internal items and a few critical raw materials. Work orders for the rest of the items. Hot sheet is a rare occurrence. 4 Rate-based schedules for key of products and work orders for the rest. Using kanbans with most suppliers and some customers. Sched­ules are not yet truly linear; capacity buffers at the end of the sched­ule are insufficient or nonexistent. 5 Repetitive rate-based schedules, with a few work orders for special items, one-piece lot sizes, no back orders, full pull systems, sched­ule linearity (smooth schedules), and deliberately scheduled capac­ity buffers at the end of each shift. SETUP High setup times cause large lot sizes so that a larger number of items absorb the large setup expense. Setup times can be drastically reduced (90% or more, in some cases) by creating work areas, cells, or lines dedicated to similar products or families. High setup times are incom­patible with repetitive, because they eliminate flexibility. 1 >20 hours 2 5-20 hours 3 2-5 hours 4 10 minutes - 2 hours 5 <10 minutes TEAMS One of repetitive's strengths is harnessing the creativity and enthusiasm of the people throughout the organization. As plants are reorganized into cells, the teams assume primary responsibility for schedule attainment and quality, replacing the traditional management structure. Teams are also primary contributors to continuous improvement efforts. 1 No teams. Workers are totally uninvolved with decisions and im­provements; they punch in, work when work is available, and punch out. 2 Teams are "forming." They are just beginning; there is a lot of ini­tial excitement and skepticism, but not a lot of solid improvement. They are deciding how to operate. 3 Teams are "storming." The latent disagreements, which were ig­nored or discounted during the forming stage, have now surfaced and must be resolved. 4 Teams are functioning well, but the rest of the support systems (man­agement, staff) are still having difficulty letting the teams have full responsibility. 5 Teams are "in charge" of virtually everything in their domain, in­cluding scheduling, quality, routine maintenance. They may have even formed their own mini-company, acquiring "raw materials" and services from their "suppliers," and sending "finished prod­ucts" to their "customers," with P&L responsibility. TOTAL COST OF QUALITY Understanding the cost of quality is important to eliminating waste and focusing efforts on improvement activities. Every level of the or­ganization should continually evaluate how to perform their jobs right the first time. This concept is not limited to manufacturing, but can be applied to the office workers and support staff as well. The goal is to have zero defects in all areas. 1 "We inspect the quality in"—after the fact inspections, incoming inspection on purchased parts, acceptable quality levels (AQLs). 2 Starting to analyze cost of nonconformance and conformance. Re­porting on defects at inspection levels. Improvement projects based on defect data. 3 Track total cost of quality, working on prioritizing nonconformance improvement projects. Employee improvement teams in place. 4 Improve based on nonconformance, using statistical process con­trol (SPC), workers are involved. Plantwide recognition of cost re­ductions and improvements. 5 Quality at the surce, no incoming inspection, SPC, design quality into manufacturing process. All employees are involved with im­proving quality and eliminating waste. VELOCITY Velocity is the measurement of how much time work-in-process is ac­tually being worked on in a way that adds value to the final customer. It is the ratio of total elapsed time divided by value-added time. For example, if a given assembly takes one week (assuming one shift of 40 hours per week) to make, and the actual time that people assemble parts is 4 hours, its velocity is 10. Focusing on velocity helps a com­pany dramatically reduce waste, reduce lead times, improve quality, and improve profits. 1 25 or higher 2 10-25 3 6-10 2-6 2 or lower CONCLUSION Measurements that are designed specifically for job shop or discrete environments are not appropriate for gaining an understanding of how a repetitive company is doing. The metrics contained in this paper are most appropriate for repetitive manufacturers. These benchmarks will assist you in ascertaining how you are doing in attaining world-class status, and where your most important opportunities for improvement lie. 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