Training Pack. Key Performance Indicators - KPI s

Transcription

1 Training Pack Key Indicators - KPI s

2 Aims & Objectives Target Audience : Site Management to Team Leaders Purpose of Module :To ensure employees have the skills to quantify impact, and provide timely direction for an individuals contribution ( at all levels) towards achieving overall business goals Aims & Objectives : How to define & measure our given business goals Why have KPI s How clarity of objectives improves motivation and delivers performance Standardised approaches to KPI s How to translate and cascade KPI s at all levels Explain links to Management

3 Key Indicators 3 Course Outline INTRODUCTION WHAT ARE KEY PERFORMANCE INDICATORS? CHARACTERSITICS OF A GOOD KPI EXAMPLES OF KPI S THE KPI CASCADE PROCESS HOW TO CREATE AND MANAGE KPI S SUMMARY

4 Introductions Name Department Length of service Knowledge of Key Indicators

5 What are KPI s Flip Chart

6 Key Indicators WHAT ARE KPI s FOR? TO COMMUNICATE STATUS - ACTUAL v TARGET PLANT LEVEL BUSINESS LEVEL WORK STATION LEVEL TO DRIVE IMPROVEMENT BY FACT NOT GUESSWORK TO HELP PRIORITISE IMPROVEMENT ACTIVITY A CONTINUAL HEALTH CHECK FOR THE BUSINESS TO CONNECT THE CUSTOMER TO THE PROCESS

7 Key Indicators ESSENTIAL IMPORTANT TO THE VIEWER VITAL - AFFECTS THE BUSINESS CUSTOMER FOCUSED DRIVES IMPROVEMENT

8 Key Indicators USEFUL CURRENT - UP TO DATE EASY TO UNDERSTAND IMPORTANT AND RELEVANT VIEWER CAN CONTRIBUTE HAS A STAKE CAN HAVE AN EFFECT (good and bad)

9 Key Indicators IMMEDIATE URGENCY / OWNERSHIP RESPONSIBILITIES DEFINED DYNAMIC IMPROVEMENT PLAN AUDIT PROCESS - ACTUAL V s PLAN CLEAR OBJECTIVES

10 Key Indicators WHAT ARE KPI s NOT? GROUP OF METRICS NOT EVERYTHING WE MEASURE IS A KPI! STATISTICS THESE CAN HELP DEFINE KPI s WORK MEASUREMENT A TOOL FOR BLAME WALL PAPER

11 Key Indicators CHARACTERISTICS OF GOOD KPI DYNAMIC SIMPLE WELL MANAGED - ROTATE VITAL FEW OWNED AND OPERATED BY LOCAL TEAM EASY TO UPDATE - MANUAL VISUAL LOCATED WHERE EASY TO SEE CHANGES JUMP OUT AT VIEWER ENGAGING RELEVANT - CREATES TALKING POINT STANDARD FORMAT EASY FOR OUTSIDER TO UNDERSTAND FEEDBACK RECORDED AND ACTED UPON

12 Key Indicators Business KPI s Safety Quality Cost Delivery People

13 Examples Actual Plotted Against Target Defects Per Assembly Unambiguous Title Visual Indicator of Trend Legend Easy To understand Jul Sept Nov Jan Mar May Jul Sep Target Improvement Nov Machining Sub Assy Assembly Test 2001 Target

14 Examples RAG Colour Coding RED Outside of target with no improvement or deteriorating trend. AMBER Inside of target but with deteriorating trend. Outside of target but with improving trend. GREEN Inside of target with improving or level trend.

15 Examples Scrap Cost YTD Scrap Cost: 34.0k No. Of Items JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Scrap Cost Scrapped Items Budget 0

16 Examples 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% How are we doing against the plan? Are we on target? Schedule Stage 1 Stage 2 Stage 3

17 Examples External Supply Schedule Adherence What are we aiming for? 100% 80% 60% 40% 20% 0% Supplier 1 Supplier 3 Supplier 5 Supplier 2 Supplier 4

18 Examples WIP ' Stock Turns 0 Nov 99 Jun 00 Sep 00 Oct 00 Nov WIP Value Product A WIP Budget WIP Value Product B Stock Turns

19 130 Examples % TAKT ADHERENCE Hrs Achieved / Hrs Planned x DAY DATE SHIFT

20 Examples

21 & Management Cascade Step 1 - Team Leaders manage the Key Drivers of performance Are wefully manned to complete the workpackages? Isovertime under control? Stage 1 Jig Board Are we hitting targets (Minutes to complete Operations)? Minutes to complete Op 1 Step 2 - Manager holds daily Team Leader review by Minutes to work package complete Op 2 Actions timely and focused Support given when needed Step 3 - Assembly Managers review Weekly withmanagers. Cost accountability introduced. Focus on shift by shift performance. 3,200 Manhours (Shift B) 3,000 2,800 2,600 2,400 2,200 2,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

22 Management Cascade & Step 4 - Head of Business reviews Weekly Good informed Stg 01 Cost Per Set 90 debate 85 Stg 01 Hours per Set 80 resulting from Stg 01 Build 1. 0 upward cascade of Team Leaders performance Countermeasure plans if targets not being met ,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Jan Feb M ar A pr M ay Jun Jul (0.6) Aug Sep Oct Nov Dec (0.8) Period Direct Indirect (1.2) NPO Disruptio YTD Week Var iance Added to Value 32.1 Out Of Week Ji g Var iance to 32.1 esh T r ai ning Ref r Week Week Cumul ative Disr Actual uption - Exter nal Di sr uption Cumul - ati Inter ve nal Budget 32.1 Budget For ecast 32.1 For ecast Ref r esh (Lean) 0.0 (0.2) (0.4) (1.0) Step 5 Senior Management Team reviews Monthly performance Production Volume Senior level escalation plans. 6,500 6, Cost Per Set 5, , , , Hours per Set , , ,500 Jan Feb Mar Apr M ay Jun Jul Aug Sep Oct Nov Dec 2,000 Period Variance (32.1) Cumulative Actual Actual Disruption Stage 1 Stage 2 Budget (32.1) Stage 3Forecast FAL Di ti OBP Jan Feb Mar Apr M ay Jun Jul Aug Sep Oct Nov Dec Jan Feb M ar Apr May Jun Jul Aug Sep Oct Nov Dec Period V ar Cumulative

23 Management Cascade & Step 6 - Site Cost consolidated. Manufacturing Director reviews Factory Manager. Forecasts of cost performance compiled to ensure corrective actions taken to achieve Budget. Risks & Opportunities monitoring and control. 200,000, ,000, ,000, ,000, ,000, ,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 Summary - All Categories 1,500,000 1,000, , ,000-1,000,000-1,500,000 M ont hly +/ 1 Forecast +/- to budget Cumulative actual Cumulative budget Cumulative forecast

24 What KPI s do you think would be applicable to your area Flip Chart

25 How to Create and Manage KPI s Monitor Progress To Plan And Take Corrective Action Identify Customers and Suppliers Determine Drivers1 Form Improvement Teams Form Team ACT PLAN Create Improvement Plan Continuous Improvement Cycle Define Local Indicators Collect Data CHECK DO Score & Prioritise KEY Indicators Train Users Develop Format And Review Process Identify owners and users

26 How to Create and Manage KPI s Identify Customers and Suppliers Determine Drivers Form Team Define Local Indicators Score & Prioritise KEY Indicators

27 & How to Create and Manage KPI s Ease of recording data Impact on business Frequency of occurrence Define Local Indicators Score & Prioritise KEY Indicators

28 How to Create and Manage KPI s Identify Customers and Suppliers Determine Drivers Form Team Define Local Indicators Score & Prioritise KEY Indicators Develop Format And Review Process Identify Owners and Users

29 Example & KPI : Key Indicator LOST HOURS (UNPLANNED WORK) PRE & POST L H G B A Days Week 3 Logistics Maintenance Engineering Handling OSS Internal MSE Shop Support A B C D E F Supplier Quality Tooling Lean Unplanned Absence MCC Trefn TAC G H I J K L M Owner: 2 Blue Shift = TW Red Shift = DJ Location: X:\Broughton\A \Lean Manufacturing\Stage 00\Std Documents\Lost Hours KPI

30 How to Create and Manage KPI s Identify Customers and Suppliers Determine Drivers Form Team Define Local Indicators Score & Prioritise KEY Indicators Train Users Develop Format And Review Process Identify Owners and Users

31 How to Create and Manage KPI s Identify Customers and Suppliers Determine Drivers Form Team Create Improvement Plan Define Local Indicators Collect Data Score & Prioritise KEY Indicators Train Users Develop Format And Review Process Identify Owners and Users

32 How to Create and Manage KPI s Monitor Progress To Plan And Take Corrective Action Identify Customers and Suppliers Determine Drivers Form Improvement Teams Form Team Create Improvement Plan Define Local Indicators Collect Data Score & Prioritise KEY Indicators Train Users Develop Format And Review Process Identify Owners and users

33 Typical KPI s KPI - examples Quality Defects (Defects per unit) Errors (errors per unit) Delivery Schedule adherence (Hours delta to plan) Cycle Time (Hours per Unit) Cost Manning (man hours per set) (Cost per unit) People Skill Level Training Hours Target 1 Defects per unit 2 errors per unit 0 delta (nil Hours behind or ahead of plan) To be agreed 270 hours per unit 5,000 per unit 75% people trained to Practitioner Level 40 hrs per man per year Key performance indicators need to be simple and focused

34 KPI s SUMMARY Direct relationship to business plan Communicates progress against plan Drives continuous improvement Visual - provokes a response Effective - simple and easy to understand Ownership - relates to everyone Up to date - dynamic management