The 5 Most Important Performance Metrics to Track Lean Manufacturing Operational SuccessDecember 10, 2015
Lean manufacturing hopes to achieve a highly-efficient, waste-free operation by more effectively managing materials, manpower and energy. Because this process is crucial for any company looking to increase profitability and efficiency, it’s essential that appropriate managers review the right data and analytics to ensure success.
One of the biggest problems we’ve seen with companies looking to move to lean manufacturing is that they’re tracking KPIs that won’t give them the important information they need. Most companies measure asset and lean manufacturing performance by looking at traditional accounting principals, such as standard labor costs or machine drivers, which provides traditional – not lean – results.
For lean manufacturing, you need to review lean-focused KPIs.
Here are the 5 most important performance metrics lean manufacturers need to watch to ensure operational success.
1. Total Cost
Review monetary spend in terms of what you’ve spent on manufacturing this period against what you spent last period – not in comparison to your operating budget. If you’re looking at lean manufacturing progress, how much you spend compared to your budget doesn’t matter. What matters is that you’re spending less and receiving better output as time goes on.
2. Total Cycle Time (TCT)
Calculate total cycle time by reviewing metrics that assess how long it takes to do one repetition of any particular task. This is commonly referred to as “Start to Start,” which measures the stating point of one product’s processing in a operation or machine until the start of the next product’s processing in the same machine or process.
Analyzing TCT will provide a measure of manufacturing performance rather than financial inventory.
3. Delivery Performance
Measure customer request date of a product against the original schedule date and do not factor in shipping promises. If you’re adjusting this metric to accommodate shipping promises or policies, you won’t be measuring the correct KPI. The delivery performance is purely a metric of your operation’s ability to meet customer requirements.
As a manufacturer, there are numerous ways to take quality into account; however, to ensure lean manufacturing success, you should look at quality in the eyes of the customer. A good way to measure this is to look at customer returns or warranty claims.
You can use traditional metrics of incident/accident frequency and severity for this KPI. When you move to a lean operation, your process becomes improved and unnecessary waste is removed, saving time, money and resources by reducing the number of injuries on your floor.
Overall, your manufacturing efforts must be aimed at improving one or more of these measurements without degrading the performance of the others. If this occurs, your manufacturing process is on its way to being lean.
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