Performance Measures

Question 1

7 Performance Measures for Quality, Cost and Delivery

Answer 1

Measures:

• Not right first time
• People Productivity
• Stock Turn
• Delivery Schedule Achievement
• Overall Equipment Effectiveness
• Value Added Per Person
• Floor Space Utilisation

Question 2

What makes a good performance measure?

Answer 2

Clarity - measure can highlight priorities for improvement in production management with focus
Simplicity - measure simplifies even complex manufacturing processes and identifies straightforward routes to performance improvements
Feedback - all seven QCD measures can be used to quantify the results of any changes to the process
Bench-marking - QCD provides the basis for objective comparison with the bench-marked processes or performance. This will highlight processes that offer better methods.
Bottom line- Business survival is dependant on profit generated from satisfying customers. QCD is a robust production tool that has a measurable effect on manufacturing efficiency, which can improve competitiveness, develop business and increase profit

Question 3

People Productivity (PP)

Answer 3

Measure of ratio between number of units made and the number of direct operator hours associated with manufacture of those units.

=Number of units made/Number of direct operator hours

Question 4

Stock Turns (ST)

Answer 4

Measure of how frequently stock,raw material, wip, and finished goods are turned over in relation to the sales revenue of a product

=Sales turnover of product/Value of raw material + WIP + finished goods

Question 5

Delivery Schedule Achievement (DSA)

Answer 5

Measure of how well a supplier matches the planned delivery requirement of a customer

=No. of planned deliveries - (No of late deliveries + No of part deliveries)*100%

Expressed as a percentage as late deliveries are deliveries of the correct quantity but are not on time. Part deliveries are of incorrect quantity which are on time

Question 6

Overall Equipment Effectiveness (OEE)

Answer 6

Total measure of performance that relates the availability of the process to the productivity and quality.
=Availability % x Productivity % x Quality %

Availability is up time of process as a percentage of total available time
Productivity is the real production rate compared with the optimal rate
Quality is the ratio of good parts to the total number of parts produced

Question 7

Value Added Per Person (VAPP)

Answer 7

Financial measure that relates to the number of direct people involved in the conversion process to add value to the product

=(Output value - Input Value)/No of employees

Output value is value of unit after production
Input value is defined as the value of the raw material unit before production
Employees are those with which without the production process cannot operate

Question 8

Floor Space Utilisation (FSU)

Answer 8

Measure of sales revenue generated per square meter of factory floor space
= Turnover of model area/Square meters of model area
measured in £ per m^2