Essay 4: Performance management
Workers main task (Objectives) vs current KPIs are shown in the following image.
Volume according to plan: Although it measures whether the cell has achieved the production plan,
it is not good measurement for disturbances. There should be new KPIs like machine idle time or
machine uptime (Machine availability)
Loss time injury: Although this is related to the disturbance, this is just measuring the number of
accidents but not a KPI of disturbance. This can be modified as loss time due injuries. But if an injury
has caused for more than pre-identified time loss then a replacing head should be introduced.
Customer complaints: This is for finished product and not for specific cell. After complete a full root
cause analysis and if the defect occurred at cell, then that is relevant. New KPI can be DPPM level,
Scrap rate of the cell
Quality yield: This is good. Better to have First Time Yield. Then it is a motivation for operators to
complete task right first time. Further that is a measurement for disturbance (Rejects/ reworks) also.
Workshop audit: Workshop audits are to check whether team has followed the quality & process
guidelines and quality awareness. Just conducting an audit is not good indicator for “How well that
cell followed the quality”. Audits are to highlight quality deviation or quality improvement
opportunities. Hence better to introduce new KPIs like Number of findings, Number of actions closed
within the month.
Delivery precision: This is not directly relevant to the objective “timely product delivered to the next
process”. If shipment delay is caused by delay in the cell only, it matters for KPI of the cell. Better to
introduce new KPI like cycle time.
Productivity: Although this is a good measurement about productivity of the labour, current
objectives of the cell are not match with this measurement. Further this measurement is for total
production process as the way it defined. Hence company must re-introduce this with some
modification. This is indirectly link with disturbance and product delivery to next process. But there
are many other reasons that can be reduced the productivity as it defined. Since productivity is 50%
of the incentive, it is better further analysing the process and introduce new objectives to achieve
expected productivity KPI.
Cost savings: This is not a production cell KPI. This is a measure for company finance team to
understand the profit margin.
Overall Equipment Effectiveness (OEE) can be introduced as common KPI for all 3 objectives. Further
it can be used to compare cells and for incentive system.
Incentive system: Productivity, product delivered to the next process as planned and Volume
according to plan are interconnected KPIs. Just productivity is enough for consideration but way of
calculation needs to modify. Further there should be an importance for First time yield in the
incentive system.