Professional Documents
Culture Documents
forProductionMonitoring
Using Visual Management to Drive Productivity
White Paper
SevenCommonKPIs
forProductionMonitoring
Using Visual Management to Drive Productivity
Table of Contents
Introduction.......................................................................................................................3
WhatareKeyPerformanceIndicators(KPIs)?.....................................................................3
WhatisVisualManagement?.............................................................................................3
SevenCommonProductionKPIs.........................................................................................4
1.Count(GoodorBad).....................................................................................................................4
2.RejectRatio...................................................................................................................................4
3.Rate...............................................................................................................................................4
4.Target............................................................................................................................................4
5.TaktTime......................................................................................................................................4
6.OverallEquipmentEffectiveness(OEE)........................................................................................5
7.Downtime.....................................................................................................................................5
ImplementingVisualManagement.....................................................................................5
DrivingProductivity............................................................................................................5
UsingVisualManagementforKPIMonitoring....................................................................6
TheRedLionAdvantage.....................................................................................................6
SevenCommonKPIs
forProductionMonitoring
Using Visual Management to Drive Productivity
Introduction
Strategic philosophies or practices such as Kaizen, Lean Manufacturing, Six Sigma, Total Quality
ManagementandContinuousImprovementareusedbymanyorganizationstohelpimproveprocesses,
driveproductivityandmaintainacompetitiveedgeintodayseverincreasingglobaleconomy.Despite
varying concepts, each practice uses Key Performance Indicators (KPIs) to assess, analyze and track
manufacturing processes. Even if an organization does not employ formal continuous improvement
initiatives, efficiency gains can still be realized by borrowing lessons learned through the visual
management techniques of those processes. This white paper discusses how visual management can
drive productivity by leveraging seven common Key Performance Indicators (KPIs) for production line
monitoring.
time of specific operations. By displaying this KPI, manufacturers can quickly determine where the
constraintsorbottlenecksarewithinaprocess.
. Overall Equipment Effectiveness (OEE)
OEEisametricthatmultipliesavailabilitybyperformanceandqualitytodetermineresourceutilization.
Production managers want OEE values to increase because this indicates more efficient utilization of
availablepersonnelandmachinery.
. Downtime
Whethertheresultofabreakdownorsimplyamachinechangeover,downtimeisconsideredoneofthe
most important KPI metrics to track. When machines are not operating, money isnt being made so
reducingdowntimeisaneasywaytoincreaseprofitability.Organizationsthattrackdowntimetypically
requireoperatorstoenterareasoncodeviakeypad,pushbuttonorbarcodescannersothatthemost
commonreasonscanbereviewedatalatertime.
Driving Productivity
Managing productivity and profitability is a key role of plant managers and engineers in worldclass
manufacturing operations. The amount of increased productivity and profit an organization stands to
gaindependsquitelargelyonthecompanyanditsexistingprocesses.
Consider any given line or machine within a production facility, and estimate the financial impact if
outputcouldbeincreasedby1,5,10oreven20percent.Nowconsiderwhatthefinancialimpactmight
(
beifdowntimecouldbereducedbyasmuchas15percent.Eventheslightestimprovementcanresult
inattractivereturns.PlantswithtargetKPImetricsshouldtakethetimetoevaluatethenumbersand
examinehowvisualmanagementcoulddriveproductivityacrosstheorganization.
Since many visual management systems are low cost, there is little risk involved for potentially large
returnsinprocessimprovementsandprofitability.Whenevaluatingsavingspotential,itisimportantto
includeallcoststhatmayincurasaresultofdowntime.Forinstance,therearelaborandutilitycosts,
but what about scrap? Many continuous processes require machines run start to finish, so any
interruptionmeansscrapproduct.KPImonitoringhelpstotracksuchprocesses.