Lean Production Performance Metrics Exercises
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1 Lean Production Performance Metrics Exercises Course in Operations Management Prof. Sergio Cavalieri Adapted from the material provided by Mr. Giovanni Ferrari and Mr. Luca Manzoni Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 1 Calculation of the following indicators Given all the necessary information on the production of a machining plant, calculating for a week of production: - PRODUCTIVITY - PRODUCTION YIELD - OVERALL YIELD - TECHNOLOGICAL RATE - SET-UP TIME - PARTS PER MILLION Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 2 1
2 Data Shift: 8x5x3 Lunch Break: 30 min/shift Physiological breaks : 2 x 10 min/shift End shift meeting: 5 min/shift End shift cleaning activity: 10 min / shift First level maintenance: 5 min/shift Production Item A Item B Base Time 100s 80s Good items per shift Weekly Scraps Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 3 Data Sources of plant stoppage: Preventive Maintenance: 1 hour/ week* Plant Breakdown: 10 hour/ week* Lack of Raw material: 2 hour/ week* Average set-up time: 1 hour Average number of set-ups: 1 per shift Assumptions: Performance Rate 1 Production rate and % scraps uniformously distributed *During the maintenance and stoppage due to lack of materials, the operators are moved to other plants. Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 4 2
3 PRODUCTION YIELD GOOD ITEMS * CYCLE TIME WORKING HOURS PLANNED BREAKS PRESENCE OF OPERATORS IN THE PLANT: 8 h/d hours when they are moved to other plants (13 h/week) PLANNED BREAKS: LUNCH BREAKS: 30min/shift PHYSIOLOGICAL BREAKS: 20min/shift END SHIFT MEETING: 5min/shift END SHIFT CLEANING: 10min/shift TOTAL PLANNED BREAKS: 2h 10min per shift FIRST LEVEL MAINTENANCE: 5min/shift SET UP: 1 hour/shift Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 5 PRODUCTION YIELD GOOD ITEMS * CYCLE TIME WORKING HOURS PLANNED BREAKS (84 x 100s x 80s) / 3600 x 3 shifts x 5 days (8h x 3 shifts x 5 days 13h) (2h 10min x 3 shifts x 5 days) 72,3 hours 74,5 hours 97,1% Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 6 3
4 DIRECT PRODUCTIVITY GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT PERSONNEL (84 x 100s x 80s) / 3600 x 3 shifts x 5 days 8h x 3 shifts x 5 days 13h 72,3 hours 107 hours 67,6% Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 7 OVERALL YIELD 24 HOURS GOOD ITEMS * CYCLE TIME 24 HOURS (84 x 100s x 80s) / 3600 x 3 shifts x 5 days 24h x 7 days 72,3 hours 168 hours 43,1% Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 8 4
5 MAIN SOURCES OF MISSED YIELD: for one production week 1. MISSED PLANNING 0 hours 2. WEEKLY SUSPENSION 48 hours In the shifts 3 x 8 x 5 Saturday and Sunday are weekly suspension: 24 hours x 2 days 48 hours 3. NATIONAL HOLIDAYS AND/OR COMPANY S CLOSURE 0 hours 4. PLANNED MAINTENANCE 1 hours 5. PLANNED PRODUCTION STOPS 17,5 hours 70 min of planned production stops x 3 shifts x 5 days 17,5 hours Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 9 MAIN SOURCES OF MISSED YIELD: for one production week 6. SET UPS 15 hours 1 SET UP PER SHIFT 1 hour x 3 shifts x 5 days 15 hours 7. BREAKDOWNS 10 hours 8. PRODUCTION INEFFICIENCIES 2,1 hours NON QUALITY: (38 x 100s + 47 x 80s) / ,1 hours 9. MISSING OPERATOR 0 hours 10. MISSING MATERIAL 2 hours 11. OTHERS 0 hours Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 10 5
6 % SOURCES OF MISSED YIELD: 1. MISSED PLANNING 2. WEEKLY SUSPENSION 3. NATIONAL HOLIDAYS AND/OR COMPANY S CLOSURE 4. PLANNED MAINTENANCE 5. PLANNED STOPS 6. SET UPS 7. BREAKDOWNS 8. PRODUCTION INEFFICIENCIES 9. MISSING OPERATOR 10.MISSING MATERIAL 11.OTHERS 0% 28,6% 0% 0,6% 10,4% 8,9% 6% 1,2% 0% 1,2% 0% Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 11 Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 12 6
7 OVERALL YIELD PLANNED HOURS GOOD ITEMS X CYCLE TIME OVERALL PLANNED HOURS OVERALL PLANNED HOURS OPENING HOURS WEEKLY SUSPENSION NATIONAL HOLIDAYS AND/OR COMPANY S CLOSURE MISSED PLANNING PLANNED MAINTENANCE hours Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 13 OVERALL YIELD PLANNED HOURS GOOD ITEMS X CYCLE TIME OVERALL PLANNED HOURS (84 x 100s x 80s) / 3600 x 3 shifts x 5 days 119 hours 72,3 hours 119 hours 60,8% Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 14 7
8 % SOURCES OF MISSED PLANNED YIELD: 1. PLANNED STOPS 14,7% 2. SET UP 12,6% 3. BREAKDOWN 8,4% 4. PRODUCTION INEFFICIENCY 1,7% 5. MISSED OPERATOR 0% 6. MISSED MATERIAL 1,7% 7. OTHERS 0% Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 15 Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 16 8
9 PPM SCRAPPED ITEMS X MILLION PRODUCED ITEMS ( ) x ( ) x 3 shift x 5 days + ( ) PPM Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 17 TECHNOLOGICAL RATE MACHINE GOOD ITEMS X BASE TIME 1 GOOD ITEMS X CYCLE TIME IMPACT OF BREAKDOWNS HOURS FAILURES HOURS (CYCLE TIME) 10 72,3 13,8% Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 18 9
10 Improvement Activities Total Productive Maintenance : Breakdown Reduction 50% Scrap Reduction 25% SMED: Set-up Reduction 50% HOSHIN: Cycle Time Reduction 15% for item A and 10% for item B Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 19 Initial Data ITEM A Production BEFORE THEN Base Time 100s 100s Cycle Time 100s 85s Good items per shift Weekly Scraps CODICE B Production BEFORE THEN Base Time 80s 80s Cycle Time 80s 72s Good items per shift Weekly Scraps Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 20 10
11 PRODUCTION YIELD GOOD ITEMS * CYCLE TIME WORKING HOURS PLANNED BREAKS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 21 DIRECT PRODUCTIVITY GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT PERSONNEL Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 22 11
12 OVERALL YIELD 24 HOURS GOOD ITEMS * CYCLE TIME 24 HOURS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 23 % SOURCES OF MISSED YIELD: 1. MISSED PLANNING 2. WEEKLY SUSPENSION 3. NATIONAL HOLIDAYS AND/OR COMPANY S CLOSURE 4. PLANNED MAINTENANCE 5. PLANNED STOPS 6. SET UPS 7. BREAKDOWNS 8. PRODUCTION INEFFICIENCIES 9. MISSING OPERATOR 10.MISSING MATERIAL 11.OTHERS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 24 12
13 Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 25 OVERALL YIELD PLANNED HOURS GOOD ITEMS X CYCLE TIME OVERALL PLANNED HOURS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 26 13
14 SOURCES OF MISSED PLANNED YIELD: 1. PLANNED STOPS 2. SET UP 3. BREAKDOWN 4. PRODUCTION INEFFICIENCY 5. MISSED OPERATOR 6. MISSED MATERIAL 7. OTHERS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 27 Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 28 14
15 PPM SCRAPPED ITEMS X MILLION PRODUCED ITEMS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 29 TECHNOLOGICAL RATE MACHINE GOOD ITEMS X BASE TIME GOOD ITEMS X CYCLE TIME IMPACT OF BREAKDOWNS HOURS FAILURES HOURS (CYCLE TIME) Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 30 15
16 INDICATOR BEFORE THEN DELTA % PRODUCTION YIELD DIRECT PRODUCTIVITY OVERALL 24 H YIELD OVERALL PLANNED YIELD PPM TECHNOLOGICAL RATE IMPACT OF BREAKDOWNS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 31 Gains achieved Calculate: Gained equivalent machine hours Average yearly financial gains Return on Investment Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 32 16
17 Initial Data Costs for technical modifications HOSHIN: 5000 SMED: TPM: TOTAL COSTS: (una tantum) Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 33 Initial Data VALUE OF ONE MACHINE HOUR 100 / hour Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 34 17
18 Gained equivalent machine hours Through optimisation of the production process (BASE TIME CYCLE TIME) x GOOD PRODUCED ITEMS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 35 Gained equivalent machine hours Through TPM Missed Overall Planned Yield from. to Δ missed Overall Planned Yield x Planned opening hours Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 36 18
19 Gained equivalent machine hours THROUGH SMED Missed Overall Planned Yield from. to Δ missed Overall Planned Yield x Planned opening hours Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 37 Gained equivalent machine hours THROUGH SCRAP REDUCTION Missed Overall Planned Yield from. to Δ missed Overall Planned Yield x Planned opening hours Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 38 19
20 Gained equivalent machine hours HOSHIN: TPM: SMED: SCRAP REDUCTION: TOTAL GAINED HOURS: Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 39 Annual Total Gain HOSHIN TPM SMED GAINS TOTAL MONTH TOTALE CUMULATIVE GEN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 40 20
21 Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 41 Productivity Production plant with a department made by 40 similar machines. Department Direct Personnel Machines 120 Department Indirect Personnel Responsible 1 Assistant 1 Shift Responsible 3 Tool Room 4 Handlers 6 Preparators 12 Plant indirects Warehouse 14 Maintenance 12 Quality 8 Pre-production 3 Other 2 Offices Logistics 8 Optimisation 2 Technologies 9 Executive Officers 2 Quality 4 Admnistration 4 TOTAL 215 Università degli Studi di Bergamo Prof. Riproduzione Sergio Cavalieri riservata 42 21
22 DIRECT PRODUCTIVITY GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT PERSONNEL Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 43 DEPARTMENTAL PRODUCTIVITY GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT + INDIRECT PERSONNEL Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 44 22
23 TOTAL PLANT PRODUCTIVITY GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT + INDIRECT DEPARTMENTAL PERSONNEL + INDIRECT PLANT PERSONNEL Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 45 GLOBAL PRODUCTIVTY GOOD ITEMS * BASE TIME WORKING HOURS OF DIRECT + INDIRECT DEPARTMENTAL PERSONNEL + INDIRECT PLANT PERSONNEL + WHITE COLLARS Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 46 23
24 MAIN SOURCES OF LACK OF GLOBAL PRODUCTIVITY LACK OF DIRECT PRODUCTIVITY IMPACT OF INDIRECT PERSONNEL OPERATING IN THE PRODUCTION DEPARTMENTS IMPACT OF WHITE COLLARS IMPACT OF MAINTENANCE PERSONNEL IMPACT OF QUALITY PERSONNEL IMPACT OF WAREHOUSE AND MATERIAL HANDLING PERSONNEL OTHERS (SECURITY, CLEANING STAFF, ETC..) Università degli Studi di Bergamo 2011 Prof. Sergio Cavalieri 47 24
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