metrics, kpis, and process insights – implementing high performance manufacturing intelligence
DESCRIPTION
John Jackiw discusses the optimal strategies to identify and organize the right metrics and use the right analytics to produce the actionable information needed for best-in-class performance. As recent MESA studies show, the best performing companies most aggressively use manufacturing process metrics to guide decision making. Informed operations and management decisions will push both routine operations and strategic activities to the highest performance levels. High performance management depends upon actionable intelligence based on the right information. Producing that information depends upon selecting the right metrics and identifying the right data sources. The first step is to review the available metrics as process parameters in general and determine which are Key Performance Indicators (KPI) in particular. The second is to determine which data is needed. While the easy choice is to use accessible existing data, a more thorough analysis can direct the company to seek out the data that is really critical to understanding process performance. Our Presenter: John Jackiw is Business Development Manager at Alta Via Consulting. He is an active member of MESA International where he is a founding member of the Global education team, a MESA Authorized Instructor (MAI), and serves on the metrics committee as team leader and project manager of the MESA publication “Metrics Framework and Guidebook 2nd Edition”. Recording - http://bit.ly/1036YlQTRANSCRIPT
Metrics, KPIs, and Process Insights –
Implementing High Performance MI
A Conversation with John Jackiw
MESA Metrics Committee Team Leader
Alta Via Consulting
Increased number if SKU’s or variations produce
What are the business leaders doing?
Do you want lead or Lag in your business
Free Summary Version of “Pursuit of Performance
Excellence” available through MESA https://services.mesa.org/ResourceLibrary/ShowResource/fc2c93d8-
00f9-472c-99cb-15c342ec8b7c
What is Business Doing to Stay Ahead
Three Layered Model
CorporateFinancials
Aggregated Financial& Operations Metrics
Operations-level KPIs &Dynamic Performance Metrics
First-pass yield
Process capability per plant (CpK)
Scrap/rework as percentage of sales
Customer reject rate (PPM)
Warranty costs
Manufacturing cycle time
Overall equipment effectiveness (OEE)
Customer fill rate/on-time delivery
Cash Flow
Net operating profit (value of shipments less material & mfg cost)
Productivity in revenue per employee
Earnings before interest, taxes, depreciation and amortization (EBITDA)
Customer Satisfaction
ROA/RONA
Labor cost per unit
Percentage planned vs. emergency maintenance work orders
Hours of overtime per week
•Average days WIP inventory
•OSHA-reportable incidents/year
•Etc, etc, etc…
In
creasin
g a
gg
reg
ati
on
External
Financial
Accounting/
Reporting
Conventions
Internal
Management
Accounting
Manufacturing companies typically have
disconnected operations and finance. RCA is a
Tool that brings together real-time solution,
together with a quantity-based - cause and
effect methodology.
Unlike MES or ERP packages alone, our solution
leverages both worlds and enables better
decisions for both production and finance.
Solution Summary
What is RCA??
Action Relies on Resource Consumption Accounting
Demand driven planning with capacity
sensitivity
Built with RCA (Resource
Consumption Accounting)
methodology as a foundation
Easily understand the resources
your line/area are consuming.
Empower your managers
with common understanding
Quantity-Based Approach
Corporate Headquarters
MANAGERIAL ACCOUNTING –
MULTI-LEVEL P&L
7
Plant Labor
Direct
Materials
Capacity
240 Hrs.
Capacity
240 Hrs.
Capacity
Unlimited 1 lbs. per unit
4 hrs. per unit
2 hrs. per unit
80 hrs. per month
80 hrs. per month
30 hrs. per month
80 hrs. per month
Plant
Maintenance
Calculated based
on production
$300 $1.25
per unit
$200 $0.83
per unit
$10
per unit
Proportional Cost
Fixed Cost
7
Corporate P&L
Plant P&L
Product P&L
Materials
Proportional Cost
Fixed Cost
xx
xx
xx
Idle Labor
Fixed - Training
xx
xx
Fixed HQ Reporting xx
Revenue xx
Product Margin xx
Plant Margin xx
Corporate Margin xx
RCA Institute All Rights Reserved
Alignment Achieved
The Storyboard
For Illustration ONLY
“Progressive Insights” Drive Needed Changes
© 2011 Atos Origin. All Rights Reserved.
Questions?
A Conversation with
John Jackiw Alta Via Consulting
Link to Recorded Webinar
John Jackiw Team Leader, MESA Metrics Committee
Business Development Manager
Alta Via Consulting
Tel: (708) 638-5206
Email : [email protected]