Visual Performance Boards

5/24/2018 Visual Performance Boards

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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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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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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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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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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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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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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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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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Manufacturin Cell


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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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Outline


What do we need to measureWhat is different from traditionalmeasures



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Lean: a New Model for PerformanceMeasurement

SHIFT

Traditional Lean

Focus onLowestProduct

Cost

Focus onMaximizing

Value StreamProfitability


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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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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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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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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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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


What do we need to measureWhat is different from traditionalmeasures



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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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33/40Performance Board Detail


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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
http://www.isiworld.net/http://www.isiworld.net/http://www.isiworld.net/

Documents

Visual Performance Boards