Continuous improvement metrics

Continuous measurement is the key to gauging the success of continuous improvement initiatives.

Six Sigma is a continuous process improvement methodology that helps companies reduce expenses and increase profits by streamlining operations, improving quality, and eliminating defects. The main goal of continuous improvement is to adopt new activities and eliminate those activities which are found to add little or no value. This methodology helps reduce inefficiencies, frustrations, and waste (including the amount of rework and rejected units, operating time, working materials, etc). The Japanese term for Continuous Improvement is Kaizen, which is taken from the words "Kai" (change) and "zen" (good). The term Kaizen was originally used to describe a key element of the Toyota Production System. In use, Kaizen describes an environment where companies and individuals proactively work to improve the manufacturing process.

A critical component of Kaizen is an unbiased view of the current state. Particularly when companies are profitable and customers are generally satisfied, changes to any process can seem both a waste and a risk. Once the current state is understood and documented and the future state defined the organization is then ready to create and implement the improvement process. It should be noted that the most successful improvements involve all employees who are part of the process that is being changed.

All unprofitable activities in each process within an organization are categorized by the following Seven Wastes: Defects, Overproduction, Transportation, Waiting, Inventory, Motion, and Processing ("DOTWIMP"). Overproduction is considered the worst of all the Seven Wastes because it includes in essence all the other issues.

To measure the Overall Equipment Effectiveness (OEE) in the working process, the organization may use a number of OEE metrics: Equipment Availability (The Operating Time divided by the Planned Production Time multiplied by 100), Equipment Performance (The Total Number of Units divided by the Operating Time divided by the Design Run Rate), and Equipment Quality (The Number of Good Units divided by the Total Number of Units, multiplied by 100). The general OEE metric is typically calculated as the product of its three contributing factors.

The most common causes of Overall Equipment Efficiency loss in manufacturing is summed up in the Six Big Losses. These six types of problems are as follows: Breakdowns (Tooling Failures, Unplanned Maintenance, General Breakdowns, Equipment Failure), Setup and Adjustments (Setup/Changeover, Material Shortages, Operator Shortages, Major Adjustments, Warm-Up Time), Small Stops (Obstructed Product Flow, Component Jams, Misfeeds, Sensor Blocked, Delivery Blocked, Cleaning/Checking), Reduced Speed (Rough Running, Under Nameplate Capacity, Under Design Capacity, Equipment Wear, Operator Inefficiency), Startup Rejects (Scrap, Rework, In-Process Damage, In-Process Expiration, Incorrect Assembly), Production Rejects (same as Startup Rejects).

Implementation of Continuous Improvement initiatives allows the organizational management to achieve the following goals: proactively improving production quality, reducing manufacturing waste, increasing employee involvement, and finally, increasing customer satisfaction.

Organizations that work toward a state of constant improvement understand that Kaizen methodology is a tool that allows them to focus resources and employees on process improvements. By understanding the current process and the future state goals the organizations can create a corporate culture of continuous improvement in order to adapt to a changing marketplace and exceed customer expectations.

How does KPI library work?

1. Find KPIs that you need - use search or browse appropriate categories.

2. Read description carefully to find out if these KPIs are what you need.

3. Download trial version for free to get an idea about what is inside.

4. Buy the full version to have KPIs in Excel with formulas and BSC file.

Ideas about KPIs

Subscribe to Balanced Scorecard ideas newsletter provided for free by authors of Strategy2Act. You will have 1-2 emails every week with balanced scorecard ideas and tips.

Email:

Software that will help you to manager your KPIS

Balanced Scorecard Designer (BSC Designer) is a tool that supports building a Balanced Scorecard system for a company, department or for a sole person. This program helps to build a Balanced Score Card system and provide business alignment.

BSC Designer helps to measure and control business performance using Scorecard and KPI tools.

Copyright 2000-2017 AKS-Labs. All rights reserved.