Metrics, KPIs, and Process Insights – Implementing High Performance Manufacturing Intelligence
- 1. Metrics, KPIs, and Process Insights – Implementing High Performance MI A Conversation with John Jackiw MESA Metrics Committee Team Leader Alta Via Consulting
- 2. 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
- 3. Three Layered Model Corporate Financials 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… Increasingaggregation External Financial Accounting/ Reporting Conventions Internal Management Accounting
- 4. 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
- 5. What is RCA?? Action Relies on Resource Consumption Accounting
- 6. 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
- 7. 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
- 8. The Storyboard For Illustration ONLY
- 9. “Progressive Insights” Drive Needed Changes © 2011 Atos Origin. All Rights Reserved.
- 10. Questions? A Conversation with John Jackiw Alta Via Consulting Link to Recorded Webinar
- 11. John Jackiw Team Leader, MESA Metrics Committee Business Development Manager Alta Via Consulting Tel: (708) 638-5206 Email : JJackiw@altavia.com