Post on 01-Apr-2015
PERFORMANCE MANAGEMENT
Performance Measurement• Participative goal setting• Benchmarking• Balanced scorecard• Basis for continuous improvements
Structure and Deployment• The process review• Metrics philosophy• Metrics Selection and Design• Commitment and reward
3-2
WHY PERFORMANCE MEASUREMENT
Management By Facts
SELECT PROBLEM
ANALIZE PROBLEM
ID ROOT CAUSE
PLAN & X ACTIONS
CONFIRM RESULTS
FINE TUNE
PARETO DIAGRAM HISTORGRAM
SCRAP REWORK
C & E DIAGRAMDATA COLLECTION
GRAPH
CONTROL CHARTS
CHECK SHEET
SCATTER DIAGRAM
“Without data, you're just another opinion.”
TIME
AFTERBEFORE
ACTION 1 ACTION 2
3-3
WHY PERFORMANCE MEASUREMENT
Establish Foundation for Continuous Improvement– Identify and size critical customer complaints– Research and track world class performance– Establish world class benchmarks– Create relevant performance measurements– Establish performance tracking and reporting– Equate customer perception to reality
Equate Customer Perception to Reality– Always use historical data when meeting with customers
3-4
WHY PERFORMANCE MEASUREMENT
A Basis for Achievement Recognition and Reward
Annual Personal Performance Recognition
Quarterly Team Achievement Award
Monthly Individual Achievement Award
Weekly Individual Achievement Award
Best-to-Date Celebration
3- 5
The Where and What of the Balanced Scorecard
TimelyProduct
Development
TimelyMaterials
Availability
On-Time Prod’n andShipments
InventoryEffectiveness
Engineering Documentation
Review
Forecast andMaster Schedule
Review
Linearity and Resource
Review
Receiving and Stock/Issue
Review
Total Customer
Satisfaction
ExcellentInternalQuality
ValidMaterialCosts
TimelyDirect LaborAvailability
Feedback andCorrective
Action Review
Cost of QualityReview
Cost Accounting
Review
Resource andCapacityReview
Yes Yes Yes Yes
YesYesYes
No No No No
NoNoNoNo
3-6
PERORMANCE MANAGEMENT
PERFORMANCE MANAGEMENT
The “Balanced Scorecard” Sales/Service Engineering
1. Build Release Timing 1. ECN Accuracy
2. S.O. Accuracy 2. Engrg Quality
3. SER Response 3. SER Execution
4. Customer Samples 4. Warranty Expense
5. On-site Startup 5. Equip. Reliability
Operations Finance
1. Production Linearity 1. Accounts Receivable
2. On-time Delivery 2. Accounts Payable
3. Product Quality 3. CODs and Checks
4. Supplier Performance 4 Information Integrity
5. ECN Execution 5. Inventory Utilization
3-7 Cascading measurements with aggregate performance roll-up
THE BALANCED SCORECARD
The Ten Period Rolling Method
STOCKROOM - NEGATIVE BALANCES
7
72
4641
3531
3530
26
1822
16
0
10
20
30
40
50
60
70
80
90
100
GOAL FY96 FY97 QTR1 QTR2 QTR3 MAR 4/3 4/10 4/17 4.24
GOAL WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
Annual Personal Performance Recognition
Quarterly Team Achievement Rewards
Weekly Performance Incentives
Best-to-date Celebrations
3-8
THE BALANCED SCORECARD
Six Critical “Must Dos” 1. KISS! Simplicity is important - complete understanding
is necessary - start slow and let it grow
2. Negotiations are required and agreements are crucial
3. The number isn’t important, direction is the best focus
4. Tenacity is everything - good measurements should never die and never fade away
5. Timing is paramount - for example: financial data is too aggregate and way too late
6. Target selections - cascading structure is good, but performance analysis is best
3-9
YOU’RE EITHER WINNING OR
YOU’RE LOSING”
MAINTAINING SYSTEM CREDIBILITY Establishing a Measurement Mindset
“THERE IS NO STATUS QUO!
There is no effective control without measurements!3-10
MAINTAINING SYSTEM CREDIBILITY
Databases, Ownership and Maintenance1. Simple Department Processes- Sales Order Input
- User: process owner
- Database: chalk board, tick chart and hand plot graphs
- Maintenance: process customer
2. Complicated Department Processes - On-time Delivery
- Users: process owner or team
- Database: Excel spreadsheet and computer graphs
- Maintenance: assigned team member
3. Intradepartmental Processes - Cost of Quality
- User: functional manager or self-directed process team
- Databases: computerized business systems down
loaded to Access for additional input forms and graphs
- Maintenance: MIS and/or team data specialist
Remember, “Without data, you're just another opinion.”
3-11
MAINTAINING SYSTEM CREDIBILITY
Some Requisites for Success– Management acceptance and support– A few good champions– Trust and understanding– Valid, timely and consistent measurements– Need to review and adjust range of metrics– Demonstrated benefits from use of system– A “want to succeed” business culture– A true sense of accomplishment
3-12
BENCHMARKING
Internal - A Good Starting Place – Define critical company success factors– Identify relevant work processes and prioritize by
importance– Identify process owners and internal customers– Agree on current performance levels and establish data
measurements– Negotiate improvement goals - celebrate the goal
achievements and reset the marks
3-13
BENCHMARKING
External - Some of the Options– Customers– Non-Competitive Businesses– Competitors– American Electronics Association– American Production & Inventory Society– Society of Manufacturing Engineers– Purchasing Management Association– American Management Association– Institute of Quality and Productivity -SDSU
– Your Best Option: Industry Week - Benchmarking Tool Kit - www.industryweek.com
3-14
Engines on the Floor
100
BENCHMARKING Internal - The Line on the Wall Story
3-15
Engines on the Floor
100
BENCHMARKING Internal - The Line on the Wall Story
3-16
INFORMATION INTEGRITY
Objectives • Accuracy• Timely availability• Ready accessibility• Ease of understanding
Targets• Engineering Documentation• Systems Data• Work Instructions• Work Standards
1-2
INFOTEGRITY
EXECUTIVES
SUPERVISORS & MANAGERS
BUYER/PLANNERS
SCHEDULERS, EXPEDITERS,PROD’N PLANNERS
CRITICAL RESOURCES COMSUMPTION CURVE
20%
35%
52%
67%
90% 80% 70% 60%100%
PercentConsumed
“INFOTEGRITY” - (ACCURACY AND TIMING)
1-3
SALES FORECAST
Up/Down Cycle, Product Management
0
10
20
30
40
50
60
70
A B C D E F G
Up Cycle Down Cycle
PURGING THE DEADBEATS
Target GPM
1-4
SALES FORECAST
Field Sales Data - Credibility Reviews
Field Sales Management Review
Inside Sales Review
Production Planning Team Review
The Annual Forecast - SWAG
The Quarterly Forecast SBs and WTs
Funnel Report
Build Plan
1-5
Forecast-Master Schedule Decision Process
SALES FORECAST
681012
25%
50%
75%
100%
DROP FENCE MANAGEMENT – MASTER SCHEDULE
COST EXPENDITURE CURVE
Weeks Remaining to Ship Date
FORECASTED CUST. ID 90% CONF
DOLLARS
EXE HOLD ORDER
1-6
ENGINEERING DOCUMENTATION
100 PRODUCT DEVELOPMENT COSTS AND SPEED CURVES
5000
60% 70% 80% 90%50%
Dollars($x000)
NFOTEGRITY” - “DOCUMENTATION” - (ACCURACY AND TIMING)
4500
500
1000
1500
2000
3500
4000
3000
2500
36
Time inMonths
30
24
18
12
Cost and Speed of Product Development
1-7
ENGINEERING DOCUMENTATION
Timely Availability
0
25
50
75
100
% Availability
TIME
DETAILED PARTS DRAWINGS
0
25
50
75
100
"As Is" "Should Be"
0
25
50
75
100
"As Is" "Should Be"
0
25
50
75
100
DESIGN PROD’NPROTO
TIME
ASSY DRAWINGS% Availability
PROD’N
PROD’NPROD’N
PROTO
PROTO PROTO
DESIGN
DESIGN DESIGN
WORK INSTRUCTIONS TEST SPECIFICATIONS
1-8
ENGINEERING DOCUMENTATION
Release and Change Control Process– Engineering has design ownership– Manufacturing has implementation ownership– Block change concept– The obsolete ECR-CCB-ECO process– The “World Class Design Team”
* Concurrent engineering concept* Conceptual design buy-off gate* Project management and design reviews* Design focus - do it right the first time* Prototype and Beta design buy-off gates* Up front design for manufacturing
1-9
Cancel Reorder
Reschedule
MASTER SCHEDULE
BILLS OF MATERIAL
LEADTIMES
LOT SIZES
INVENTORY
PURCHASEORDERS
WORK-IN-PROCESS
MRP – MATERIAL REQUIREMENTS PLANNING
SYSTEMS EFFECTIVENESS
Infotegrity Controls
1-10
SYSTEMS EFFECTIVENESS
THE MRPII CRUSADE – What went wrong, Olie?
COMPUTERGENERATED
MASTERSCHEDULE
COMPUTERGENERATEDMRP TAKE-ACTIONS
Master ScheduleSales Forecast
Production BOM
Order Entry
Sales Configurator
Prod’n Inventory
Shop Orders
Purchase Orders
FG Inventory
Product Design
82.1%MASTER SCHEDULE
“INFOTEGRITY” 68.2%ORDER-LAUNCH“INFOTEGRITY”
92%98%
100%
92%
99%
99%
82.1%
93%
96%
94%
1-11
SYSTEMS EFFECTIVENESS
Visual Management– Sequential production– Point of use logistics– Everything has a place and is in its place– The “constraints” board– Trouble lights– Kanbans– Time phased schedules– Cycle time and GPM displays– The daily walk around
1-12
INFOTEGRITY CONTROLS
“TAKEACTION”
REVIEWS
SYSTEMS PARAMETER
MAINTENANCE
PRODUCTDOCUMENTATION
AUDITS
BUSINESS PROCESS REVIEWS
“INFOTEGRITY” EFFECTIVENESS CURVE
60%
70%
80%
90%
PercentEffectiveness
Reviews - Audits - MBWA - SPC
The Effectiveness Curve
1-13
INFOTEGRITY CONTROLS
Audits, Tracking and Corrective ActionsSTOCKROOM - NEGATIVE BALANCES
31
87
72
6256
43 45
3530
26
18
28
16
0
10
20
30
40
50
60
70
80
90
100
GOAL Year 3 Year 2 Year 1 QTR1 QTR2 QTR3 MAR 4/3 4/10 4/17 4.24
FY98 GOAL WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
INVENTORY RECORD ACCURACY
1. TOP 20
2. Negative Balances
3. 100%ers
4. Average Count
5. Average Net $
6. Average Absolute $
7. Location
INVENTORY PROBLEMS AND CORRECTIVE ACTIONS
PROBLEM CORRECTIVE ACTIONS WhoREOCCURRENCES
WK56WK55WK54WK53No.WK
“Four blanks and you’re Off”1-14
INFOTEGRITY CONTROLS
The “Where, What, and Why of Controls
TimelyProduct
Development
TimelyMaterials
Availability
On-Time Prod’n andShipments
InventoryEffectiveness
Engineering Documentation
Controls
Forecast andMaster Schedule
Controls
Linearity and ResourceControls
Receiving and Stock/Issue
Controls
Total Customer
Satisfaction
ExcellentInternalQuality
ValidMaterialCosts
TimelyDirect LaborAvailability
Feedback andCorrective
Action Controls
Cost of QualityControls
Cost Accounting
Controls
Resource andCapacityControls
Yes Yes Yes Yes
YesYesYes
No No No No
NoNoNoNo
1-15
• Sales Forecasts– Up/down cycle, product management – Field sales data - input credibility reviews– Forecast-Master Schedule decision process
• Engineering Documentation– Cost and speed of product development– Timely availability– Release and change control process
• Systems Effectiveness– KISS– Management controls– Visual management
• Infotegrity Controls– The effectiveness curve– Audits, tracking and corrective actions– The where, what and why of controls
ACCURACY AND TIMING
1-16
The Methodology• The process review• Metrics philosophy• Metrics Selection and Design• Commitment and reward
Benefits• A focus on critical success targets• Establishes process ownership• Relevant innovation and learning • Bottom Line Results
STRUCTURE AND DEPLOYMENT
6 -2
The Business Survey
CredibleSales
Forecasting
On-Time Prod’n andShipments
As ReceivedQuality
Engineering DocumentationProcess Review
Forecast andMaster ScheduleProcess Review
Materials and Scheduling
Process Review
Mini-ISO-9000Quality
Process Review
StrategicPlanning
Total Customer
Satisfaction
InventoryEffectiveness
ProfitMargins
StrategicPlan
Review
Feedback andProactive
Process Review
Days of Supply Process Review
Cost of Qualityand Kaizen
Process Review
Yes Yes Yes Yes
YesYesYes
No No No No
NoNoNo
TimelyProduct
Development
THE PROCESS REVIEW
6 -3
CredibleSales
Forecasting
No
In Search of Constraints/Opportunities
Sales Forecast &Master ScheduleProcess Review
THE PROCESS REVIEW
6 -4
Constraints/Opportunities
1. Untimely forecast updating
2. Sandbagging and SWAGing
3. Lack of credibility analysis
4. No formal forecasting process
TimelyProduct
Development
No
Engineering DocumentationProcess Review
In Search of Constraints/Opportunities
THE PROCESS REVIEW
6 -5
Constraints/Opportunities
1. Bill of material errors
2. Late drawing releases
3. Excessive engineering changes
4. Ineffective product design process
On-Time Production and
Shipments
No
Materials and Scheduling
Process Review
In Search of Constraints/Opportunities
THE PROCESS REVIEW
6 -6
Constraints/Opportunities
1. Poor supply chain performance
2. Ineffective MRP system
3. Excessive inside-of-lead-time orders
4. Worker inflexibility
As ReceivedQuality
No
Mini-ISO-9000Quality
Process Review
In Search of Constraints/Opportunities
THE PROCESS REVIEW
6 -7
Constraints/Opportunities
1. Lack of worker training
2. Poor supply chain performance
3. Inadequate work instructions
4. Poor general quality attitude
ProductProfit
Margins
No
Financial and Cost of QualityProcess Review
In Search of Constraints/Opportunities
THE PROCESS REVIEW
6 -8
Constraints/Opportunities
1. Excessive scrap and rework
2. Poor supply chain performance
3. No continuous improvement program
4. Too much overtime
InventoryEffectiveness
No
Days of Supply Process Review
In Search of Constraints/Opportunities
THE PROCESS REVIEW
6 -9
Constraints/Opportunities
1. Little line item accountability
2. Excessive work-in-process
3. No inventory parameter maintenance
4. Poor record accuracy
Total Customer
Satisfaction
No
Feedback andProactive
Process Review
In Search of Constraints/Opportunities
THE PROCESS REVIEW
6 -10
Constraints/Opportunities
1. Lack of sales/service feedback
2. Limited customer communication
3. Untimely inquiry response times
4. No corrective action logs/history
StrategicPlanning
No
CompanyPerformance
Review
In Search of Constraints/Opportunities
THE PROCESS REVIEW
6 -11
Constraints/Opportunities
1. Too little down the chain communication
2. Little low level commitment
3. Ineffective benchmarking
4. No relevant tactical plan or execution
Selection of a Few Relevant Metrics
Company
1. Gross profit margin
2. Customer satisfaction index
3. Sales revenue
4 New product introduction cycle
5. Productivity (Sales per employee)
THE PROCESS REVIEW
6 -12Top Level measurements
Selection of a Few Relevant Metrics
Sales
1. Missed sales opportunities
2. Inside of lead-time bookings
3. Sales order entry errors
4. Open customer complaints
5. Customer order cycle time
Cascading measurements with aggregate performance roll-up
THE PROCESS REVIEW
6 -13
Selection of a Few Relevant Metrics
Customer Service
1. Past due delivery dates
2. Open corrective action items
3. On-site equipment MTBF
4. Open “Request for Quotations”
5. Warrantee Expenses
Cascading measurements with aggregate performance roll-up
THE PROCESS REVIEW
6 -14
Selection of a Few Relevant Metrics
Engineering
1. Bill of material errors
2. Late engineering releases
3. Routing and planning errors
4 Product design cycle times
5. Sales information cycle times
Cascading measurements with aggregate performance roll-up
THE PROCESS REVIEW
6 -15
Selection of a Few Relevant Metrics
Operations
1. Non-Linear carry-overs
2. Build cycle times
3. As delivered quality problems
4. Supplier line rejects
5. Product cost-of-sales
Cascading measurements with aggregate performance roll-up
THE PROCESS REVIEW
6 -16
METRIC PHILOSOPHY
A Focus on Improvement
Example #1:STOCKROOM - NEGATIVE BALANCES
25
80
6963
5862
6561
5852
61
52
0
10
20
30
40
50
60
70
80
90
100
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
Process 5-03: Number of inventory, on-hand balances reported as negative.
ITEMS
6 -17
METRIC PHILOSOPHY
A Focus on Accomplishment
Example #2: PROFIT MARGINS
55
38
4142
48 4847
5152 52
49
52
35
37
39
41
43
45
47
49
51
53
55
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
Results02: Aggregate product profit margins
PERCENT (%)
6 -18
Keep It Simple Stupid (KISS) Easily understood Controllable by team actions Reliable and true Traceable to a source
Make Sure it Provides A number that you can quantify and graph Useful feedback An aggressive target A team’s ability to influence the outcome A relationship to critical success targets
METRICS PHILOSOPHY
6 -19
Scorecard Template Design
STOCKROOM - NEGATIVE BALANCES
40
8185
76 77
6972 73
6568 6665
0
10
20
30
40
50
60
70
80
90
100
G B 1/6 1/13 1/20 1/27 2/3 2/10 2/17 2/24 3/3 3/10
GOAL WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -20
Ten Periods Cascading
STOCKROOM - NEGATIVE BALANCES
40
80
6972 73
6568
65
0
10
20
30
40
50
60
70
80
90
100
G B JAN 2/3 2/10 2/17 2/24 3/3 3/10 3/17 3/24 4/7
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -21
Ten Periods Cascading
STOCKROOM - NEGATIVE BALANCES
40
80
6972 73
6568 66
6255
5855
0
10
20
30
40
50
60
70
80
90
100
G B JAN 2/3 2/10 2/17 2/24 3/3 3/10 3/17 3/24 4/7
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -22
Ten Periods Cascading
STOCKROOM - NEGATIVE BALANCES
40
80
69 68 6662
5558
55
0
10
20
30
40
50
60
70
80
90
100
G B JAN FEB 3/3 3/10 3/17 3/24 4/7 4/14 4/21 4/28 5/5
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -23
Ten Periods Cascading
STOCKROOM - NEGATIVE BALANCES
40
80
69 68 6662
5558
6265
6158
55
0
10
20
30
40
50
60
70
80
90
100
G B JAN FEB 3/3 3/10 3/17 3/24 4/7 4/14 4/21 4/28 5/5
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -24
Ten Periods Cascading
STOCKROOM - NEGATIVE BALANCES
40
80
6963
5862
6561
5855
0
10
20
30
40
50
60
70
80
90
100
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -25
Ten Periods Cascading
STOCKROOM - NEGATIVE BALANCES
40
80
6963
5862
6561
5852
61
52
0
10
20
30
40
50
60
70
80
90
100
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -26
Ten Periods Cascading
STOCKROOM - NEGATIVE BALANCES
40
71
6258
52
61
52
0
10
20
30
40
50
60
70
80
90
100
G B QTR-1 APRIL 5/5 5/12 5/19 5/26 6/2 6/9 6/16 6/23
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -27
Ten Periods Cascading
STOCKROOM - NEGATIVE BALANCES
18
71
6258
52
4236
0
10
20
30
40
50
60
70
80
90
100
G B QTR-1 QTR-2 QTR-3 OCT NOV 12/1 12/8 12/15 12/22 12/29
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -28
Establishing Historical Performance
STOCKROOM - NEGATIVE BALANCES
11
44
23
13
0
10
20
30
40
50
60
70
80
90
100
G B 2000 2001 1/5 1/12 1/19 1/26 12/8 12/15 12/22 12/29
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
METRICS RECORDING
6 -29
SCPM Cycle (Survey-Constraint-Plan-Metric)
INSIDE OF LEAD-TIME CHANGES
INSIDE OF LEAD TIME CHANGES
5
15
1213
910
11
87
98
7
0
5
10
15
20
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Description of the metric measurement
ITEMS
6 -30
METRICS RECORDING
TACTICAL CORRECTIVE
PLAN
Sales Forecast &Master ScheduleProcess Review
Example #1
SCPM Cycle (Survey-Constraint-Plan-Metric)
BILL OF MATERIALERRORS
6 -31
METRICS RECORDING
TACTICAL CORRECTIVE
PLAN
Engineering DocumentationProcess Review
BILLS OF MATERIAL ERRORS
12
28
24
21
26
21
18
22
1618
1616
0
5
10
15
20
25
30
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Description of the metric measurement
ITEMS
Example #2
SCPM Cycle (Survey- Constraint -Plan-Metric)
LATE ORDERSAND
SHIPMENTS
6 -32
METRICS RECORDING
TACTICAL CORRECTIVE
PLAN
Materials and Scheduling
Process Review
Late Orders/Shipments
9
42
3537
32
2831
26
22 23
1818
0
5
10
15
20
25
30
35
40
45
50
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Description of the metric measurement
ITEMS
Example #3
SCPM Cycle (Survey-Constraint-Plan-Metric)
INSTALLER AND CUSTOMER
COMPLAINTS
6 -33
METRICS RECORDING
TACTICAL CORRECTIVE
PLAN
Mini-ISO-9000Quality
Process Review
INSTALLER/CUSTOMER COMPLAINTS
0.25
4
5
4
5
3
2
6
1
0.5
2
0.5
0
1
2
3
4
5
6
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Description of the metric measurement
NUMBER
Example #4
SCPM Cycle (Survey-Constraint-Plan-Metric)
HIGH COSTOF
SALES
6 -34
METRICS RECORDING
TACTICAL CORRECTIVE
PLAN
Cost of Qualityand Kaizen
Process Review
COST OF SALES
45
5355
5856 57 58
5254
51 5050
0
10
20
30
40
50
60
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Description of the metric measurement
Percent
Example #5
SCPM Cycle (Survey-Constraint-Plan-Metric)
EXCESSIVEDAYS OF SUPPLY
6 -35
METRICS RECORDING
TACTICAL CORRECTIVE
PLAN
InventoryDays of Supply Process Review
DAYS OF SUPPLY
30
94
66
52 50 48 48 49 49 4948
0
10
20
30
40
50
60
70
80
90
100
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Description of the metric measurement
ITEMS
Example #6
SCPM Cycle (Survey-Constraint-Plan-Metric)
TOO MANY OPENPROBLEM
ISSUES
6 -36
METRICS RECORDING
TACTICAL CORRECTIVE
PLAN
CustomerFeedback and
Proactive Process Review
OPEN PROBLEM ISSUES
2
8
7
6
5
6
7
6 6
5
6
5
0
2
4
6
8
10
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Description of the metric measurement
Points
Example #7
SCPM Cycle (Survey-Constraint-Plan-Metric)
NEGATIVE METRICTRENDS
6 -37
METRICS RECORDING
TACTICAL CORRECTIVE
PLAN
StrategicPlanning
METRICS WITH NEGATIVE TRENDS
12
32 3335
28
32
23
28 29
2325
23
0
5
10
15
20
25
30
35
40
G B JAN FEB MAR 4/7 4/14 4/21 4/28 5/5 5/12 5/19
TARGET WEEKLY AVERAGE BEST-TO-DATE
SR02: Description of the metric measurement
Quantity
Example #8
THE METHODOLOGY
6 -38
Aggregate Performance Index
88
14
60 76
43 22 69 78 86
62 25 121
12 43 23 33 26
122 92
Top Level = Company
2nd Level = Divisions
3rd Level = Departments
4th Level = Teams
5th Level = Metrics
_
_
_
_ _
_
_
_
_
_
_
_
_
_
_
__
_
_
_
80
64
48
32
16
10
20
30
40
50
250 50
125
100
40200
30
75
150
20
50
100
1050
25
HUMAN RESOURCES
SERVICE
ENGINEERINGOPERATIONS
SALES
IN PURSUIT OF THE BOTTOM LINE
METRICS RECORDINGTHE
PERFORMANCE DIAMOND
6 -39
Performance Recognition
STOCKROOM - NEGATIVE BALANCES
7
72
4641
3531
3530
26
1822
16
0
10
20
30
40
50
60
70
80
90
100
GOAL FY96 FY97 QTR1 QTR2 QTR3 MAR 4/3 4/10 4/17 4.24
GOAL WEEKLY AVERAGE BEST-TO-DATE
SR02: Number of inventory, on-hand balances reported as negative.
ITEMS
Annual Personal Performance Recognition
Quarterly Team Achievement Rewards
Weekly Performance Incentives
Best-to-date Celebrations
COMMITMENT AND REWARD
6 -40
The “Make-it-Happen” Forum
COMMITMENT AND REWARD
The Machinists’ Story
6 -41
A Time For Change
COMMITMENT AND REWARD
CHANGE RESULT
Understanding the CEO’s vision Increased self-worth
Employee empowerment Increased morale
Tactical plans alignment No finger pointing
Focused efforts Improved performance
Improved communications Better decision-making
Optimized business processes - only value added activities - reduced operating costs
- reduced inventory
Performance recognition Employee job satisfaction and retention
6 -42
THE METHODOLOGY
• The Process Review– The business survey– Critical success metrics– Typical business metrics
• Metrics Philosophy– A focus on improvement– A focus on accomplishment– KISS
• Metrics Monitoring– Scorecard template design– Ten periods rolling forward– Establishing historical performance
• Commitment and Reward– Performance Recognition – The “Make-it-Happen” Forum– A time for change
6 -43