Some unique Requirements
|Lean organization work in teams and not as individuals||So the measures have to focus on the team at attaining its goals|
|Lean organizations focus on the process to improve the result||Hence critical success factors needed to achieve the goal are to be measured and not the result alone|
|Lean organizations focus on adding value for the customer||The measures adopted must demonstrate ability to effectively produce value for the customer|
|Lean organization keep striving for improvement||The measures must be proactive-providing an immediate guidance for improvement|
Frequency of lean Measurements
The measures have to be proactive hence the frequency must be determined by :
What is wrong with Traditional Measurements?
- They motivate non lean behavior
- Such as building large batches and increasing inventory which ruins flow.
- The Measurements come too late to be useful
- In most companies monthly reports are made and much time is spent explaining variances.
- In some cases reports giving daily information are available but they do little to support the company’s Lean goals.
3. They focus primarily on financial information
- Such as efficiency of people, machine utilization, manpower utilization, overhead absorption etc.
4. The Measurements waste a lot of time gathering data
- Detailed information is collected –manpower utilization per job, machine time per job, materials issued etc.
- As we move to lean manufacturing the burden of data collection becomes worse. Smaller batches lead to more work orders, more tracking, more manpower reporting, more machine time reporting etc.
- Tracking all this through ERP etc. is just automating waste.
Lean Performance measures- Various Domains
- Cell / Process Measures- the purpose of these measures is to provide the cell team members with the information they need to meet the customers needs today-to get done today what needs to be done. These are action oriented measures. If things go wrong these measurements trigger action to correct problems.
- Value Stream Measures- the purpose of these measures is to initiate continuous improvement in the value stream and also as a primary control mechanism of the business. They drive change not merely report outcomes. These changes must lead to increased value, reduced waste, improved flow and higher profitability. The actual numbers reported for each measurement are of less importance then the rate and direction of the change.
Examples of Lean Measures :
- As such unique appropriate measures can only be decided by actual working conditions, processes and industry requirements, some starter examples are given in the following tables.
- Many companies use variants or alternates to the measurements suggested.
- Some supporting measurements- dealing with safety, training etc. are also used. These do not as such track the lean performance but do provide useful information on the state or progress of lean transformation.
Cell performance measures -starter set examples
Value Stream performance measures -starter set examples
Making the Lean measurements work
- The supervisors and Managers must USE the measurements to monitor the progress on the shop floor.
- Eliminate any other measurements.
- The measurements must be easy for people to do.
- Listen to the users and change measurements if required .
- Provide a NO- BLAME workplace.
- It is unhelpful to compare two separate cells or value streams-can prove counter productive.
- The performance measurements must be directly related to the company’s business strategy.
Acknowledgement: Brian Maskell