Archive for delivery performance improvement

Meaningful Manufacturing Metrics

Posted in Manufacturing Improvement with tags , , , , on June 29, 2014 by manufacturingtraining

I question I frequently hear from clients is this:

     What metrics should I use for managing manufacturing?

The answer depends on the nature of your business.   Whatever you do, though, your metrics should meet these paramount requirements:

  • Your metrics should convey an honest sense of how the business is doing at a level that can be influenced by those who see the metric.
  • Your metrics should be posted where the performance is being measured.
  • The meaning of your metrics should be clear (simple is better).
  • Your metrics should be prepared by the folks doing the work.

What I usually see in client facilities are artfully-crafted Excel or PowerPoint plots that purport to show company performance.   It’s always at the company level, and the chartsmanship is always impressive.   Not the contents or the information contained in the charts, mind you, but the charts are beautiful   There must be an army of folks out there earning good livings churning out charts using everything MSOffice has to offer.   No kidding…the charts are awesome.  There are usually lots of charts in a central location (it seems like there are always more than a dozen, sometimes many more than that).   Like I said, they’re beautiful…a true testament to the capabilities of Excel and PowerPoint.

Usually, I’m the only one examining the MSOffice artistry…I never see anyone else examining them.   If you’re smiling while visualizing this image and my comments, consider this:   I often stop the next person who walks by (it doesn’t matter if it’s the CEO or a machine operator) and I ask this question:   What do the charts mean?   If it’s a productivity chart, I ask how it’s calculated.   If it’s on time delivery performance, I’ll ask how they measure it.  I can pick any chart on the wall, and after an embarrassed silence, the response is always the same:   I’m not sure.

I’m going to suggest just three metrics that I know will make a difference in your organization’s profitability and on time delivery performance:

  • Shipments Against Plan
  • Percent of Work Orders Completed On Time
  • MRB Aging

Let’s consider each of these.Shipments Against Plan

The first one, shipments against plan, is a monthly x-y plot that shows a cumulative shipping plan (in dollars) for the month, with another line showing actual shipments (again, in dollars).   Here’s what it looks like:

PlanVsActuals

The beauty of the above metric lies in several areas:

  • If the product area manager prepares it (and I’ve always made that be the case in any manufacturing organization I’ve ever managed), they know every day where the shipments are with respect to the contact due date.  They don’t have to wait until the end of the month to find out where they are.
  • If you base the dollars on the product values and their contract due dates, you get a true plan of what the shipments (both planned and actual) should look like.  I often hear manufacturers claim they have to plan by revenue rather that the product due dates, but that’s a mistake from several perspectives (and it will the subject of a future blog entry).  A bit of a prelude on that one:  If you start pulling in anything you can to make the monthly sales figure (i.e., ship product earlier because it’s closer to being ready to ship than what is actually due), you’re doing serious damage to next month’s shipping schedule.  Like I said, more on this topic later.
  • If you put this metric in the factory in the final assembly area (and especially if the product manufacturing manager is located in this area), everyone sees exactly where the company is.
  • It avoids the typical “hockey stick” shipping profile, where little goes out of the factory during the first three weeks of the month, and there’s a mad dash to ship everything during the last week of the month.

Percent Of Work Orders Completed On Time

This is another simple chart, and it’s one that should be prepared for and prominently displayed in every work center in your factory.  It looks like this:

PercentOnTime

The premise here is that something or someone assigns work orders to each work center, and that the assignment includes a required completion date.   In companies with an MRP or ERP system, it’s usually called the “dispatch report” or the “to do” list.  It almost goes without saying, but I’ll say it anyway:  If the company is to deliver its products on time, each work center must strive to complete its dispatch-report-assigned work orders on time.

The metric here is simple:  It just shows the percent of work orders the work center completes on schedule each day.    The work center supervisor should prepare it at the end of the day, and post it in a prominent location so the folks assigned to each work center know how they’re doing.   It used to take me no more than 5 minutes to do this.  It was the essence of what I was being paid to do (manage the work center).

The beauty of this metric is that it is simple (everyone in the work center will understand it), it only takes a few minutes each day to prepare, and it naturally encourages the work center to improve performance.   Hitting that 100% on time in the work center is manageable and achievable.

Sometimes I hear folks tell me this:  We can’t do this because everything in the work center is late, so there’s no way we can hit 100%.  If that’s the case in any of your work centers, you need to replan the work.   That’s important for several reasons, the most significant of which is that the master production schedule should define who needs to do what and by when.  If your master production schedule doesn’t assign the work order completion dates and everything (or nearly everything) in the work center is late, the folks in the work center will decide which jobs they work.   That’s not a formula for success.

MRB Aging

The exhortations about 6 Sigma and other management fads du jour notwithstanding, anyone who’s ever worked in a manufacturing company knows that nonconformances occur.   Yes, we want robust processes and we’d like to have zero defects, but I’ve never been a factory that doesn’t experience rejections (and I’ve been in a lot of factories).  What governs our success is how we respond to them.

When items are rejected, they enter a material review process that determines nonconformance disposition:  Should the nonconforming item be scrapped, reworked, repaired, or used as is?

The above is interesting and you could write a book about the nuances associated with managing nonconforming material (I know because I actually did write a book that addresses this topic).   In my experience, strong root cause corrective action is essential for the obvious reasons (please see our Root Cause Failure Analysis training program), and so is rapid nonconformance disposition for a less obvious reason I’ll get to in a second.   Root cause failure analysis means finding out why the nonconformance occurred and taking steps to preclude recurrence.

Nonconformance disposition means what we do with the nonconforming item, and whatever we do, it’s important that we do it quickly.   Very quickly, in fact.  From a delivery performance perspective here’s a little known fact with a huge impact:   Stuff in MRB is invisible to MRP.   The MRP system thinks the rejected items in MRB are still available.   What that means to us is this:   When rejected items languish in MRB, they interfere with on time deliveries.   Items in MRB need to be rejected rapidly.   In the plants I’ve managed, I’ve put that limit at 1 day.   I’ve scrapped stuff that was hanging around too long even it could be reworked.   My reasoning was that I was in a better position letting MRP know the material was gone so we could get on with fabricating replacement material.   It drove the Materials folks nuts, but I only had to do it a couple of times before they became world-class proponents of dispositioning rejected material in less than a day.

This brings us to the third metric, and that’s a simple list of what’s in MRB, with a requirement that anything in there for more than 24 hours was highlighted in red.   You can set up an Excel spreadsheet with conditional formatting to check the time something entered MRB to the current time, and highlight it automatically if it goes over 1 day.   I posted that list outside the MRB bond area so that anyone walking by the area (which always included me at least once daily) could immediately see if things were growing whiskers in there.   It worked well.

MRP Aging

If your company is not delivering on schedule, the above metrics will have a rapid impact on highlighting where it hurts and where the improvement opportunities lie.   It’s a great start at putting control of the factory in the hands of the folks who can make a difference in how your plant performs.   There’s much more to getting on schedule and staying there, of course, but the above is a good start.

If you’d like to learn more about on time delivery performance, please pick up a copy of Manufacturing Delivery Performance Improvement, available from Amazon.

Manufacturing-Delivery-Performance-Improvement

If you have any questions or suggestions, please give us a call at 909 204 9984; we’d love to hear from you.

 

 

Advertisements

Manufacturing Delivery Performance Improvement

Posted in Manufacturing Improvement with tags , , , on July 5, 2012 by manufacturingtraining

Our newest book, Manufacturing Delivery Performance Improvement, is now available from Amazon.com!

If your company has ever struggled with shipping products on schedule, this book cuts through all the theory and software mysticism the MRP and ERP companies push…it’s what you need to know if you want to eliminate your delinquencies and stay on schedule.  It’s also the book we’ll be using in the University of Kansas online Manufacturing Performance course series, and you can learn more about the KU program right here.

Posted in Manufacturing Improvement with tags , , on April 1, 2012 by manufacturingtraining

If you work in manufacturing, I know you have been inundated with cute titles for quality and productivity improvement programs for decades:

  • Zero defects (that one made a few guys in Winter Haven wealthy)
  • TQM (does anyone use that term any more?)
  • 6σ (we are fascinated by Greek letters and martial arts belts)
  • 5 Whys (hey, why not?)
  • 5S (in both English and Japanese, no less!)
  • Lean (perhaps picking up on our anti-obesity predilection?)

And many, many more. You get the idea.

Over the last three or four decades I’ve watched all of the above with some detachment and great amusement.  Much of what’s included in these programs is the same; the titles are simply new wrappings around old ideas.  But the old ideas still make sense.  Process improvement.  Scrap reduction. Clean workplaces.  Reduced setup times.  Straight-line manufacturing.  The list goes on.  My challenge to you is this: Find something in any of the above programs that didn’t originate in basic manufacturing/industrial management concepts…concepts that go all the way back to the Industrial Revolution and Frederick Taylor.  I’d be interested in hearing your comments.

The above notwithstanding, I’d like to weigh in with a program of my own.  I’ve thought about this a lot. It’s got to be simple.  It needs a Greek letter to lend an air of the esoteric and perhaps make it sound needlessly scientific (although I promise you, it won’t be either).  It needs to offer a catchy way to package Mr. Taylor’s key concepts.  It needs to be marketable.  And it needs to be focused on improving manufacturing, quality, and profitability.

Here we go:  7 Pi.

Yep. I originally started out with 6P, but then I realized I was leaving out an important P, and P didn’t sound as cool as Pi, or ππ, as you know, is the Greek letter for P.

About now, as you’re reading this, you’re probably wondering what this is all about.  The focus here is delivery performance improvement, or getting and staying on schedule as a manufacturer.  If you’ve ever run a plant that was behind schedule, you know how tough life can be.  And if your plant is on schedule, you know that quality and profitability are going to be okay (trust me on this, I’ve seen it happen in the plants I’ve run and in the ones I’ve advised).  Staying on schedule is critical.  If you can do that, everything else falls into place.  And if you do everything you need to do to be on schedule, everything is in place.

So, here we go…the 7 Pi’s for delivery performance improvement:

  • People
  • Product
  • Process
  • Procurement
  • Productivity
  • Production Control
  • caPacity

I know, I fudged it a little on that last one, but that’s the only bit of artistic license I’ll take here.  Watch the ManufacturingTraining blog, folks, because we’re going to explore each of our 7π’s in the coming weeks!

KU Online Courses Scheduled for 2012-2013

Posted in Manufacturing Improvement with tags , , , , , on March 21, 2012 by manufacturingtraining

ManufacturingTraining and the University of Kansas have finalized the course schedule for our next series of six online Manufacturing Optimization courses:

  • Delivery Performance Improvement:  21 August 2012
  • Cost Estimation:  16 October 2012
  • Industrial Statistics:  8 January 2013
  • Quality Management:  5 March 2013
  • Root Cause Failure Analysis:  30 April 2013
  • Cost Reduction and Optimization:  25 June 2013

Each course is 3 weeks long and the University of Kansas will grant Continuing Education credit.  We’ll meet for online lectures twice each week, with interactive assignments and discussion board activities following the lectures.  We’ll be posting more information here and on the ManufacturingTraining.com website in the near future, so stay tuned for more information on this exciting new professional education opportunity!  In the meantime, if you want advance information on pre-enrolling, you can do by shooting an email to info@ManufacturingTraining.com.