Additional Chapter II

KPIs

2006 Prentice Hall, Inc.

Outline
Key Performance Index
Manufacturing KPIs
Productivity
Quality
Cost
Delivery
Safety
Morale

Outline Continued
Uses of KPIs
MOTSAP

Learning Objectives
When you complete this chapter, you
should be able to:
Identify or Define:
Key Performance Index
Manufacturing KPIs
Available time for
production
Operation time
Downtime

Learning Objectives
When you complete this chapter, you
should be able to:
Describe or Explain:
KPIs in Manufacturing
Causes of Downtime
Uses of KPIs

Key Performance Index

Measurable quantity
Indicator that reflect the operation
results
Management tool

Manufacturing KPIs
Indicators used to indicate
manufacturing performance
6 groups of KPIs
Productivity
Quality
Cost
Delivery
Safety
Morale

Production
performance
Quality performance
Cost performance
Delivery performance
Safety and
Environmental
Employee collaboration

Manufacturing KPIs
Customer &
Consumer
Development

Supplier

Planning
Sourcing

Production

Delivery

Manufacturing

Customer & Consumer

Products &
Processes
Development

Productivity KPIs
Total Time
Available Time

Holiday
Unused
Time

Used Time
Planned
Halt Time

Operation Time
Production Time
Effective Time

Unexpected
Stoppage

Performance

Routine
Production
Stoppage

No plan
Planned
maintenance

Set up, stop sequence

Breakdown, part short

Net-utilized time Performance

Idle time, speed loss, defect
losses

Productivity KPIs
Total Materials
Total Produced Product
Product that can be sold
Priority Product
Good Product

By Product
Rework

Waste
Defect

Man-Hours for production

Total Man-Hours
Break,
Meeting

Total Assigned Man-Hours

Net Working Man-Hours
Efficient Man-Hours
Valued Man-Hours

Monitoring,
Adjustment

Unbalanced line,
Lack of automation

Idle time,
Motion

Productivity KPIs
1
Actual Cycle Time =
Actual Production Speed

Labor Productivity =

AM Ratio =

Production Volume
Man-hour

Number of Self-Fixing
Number of Breakdown

Productivity KPIs
Actual Output - Defect x 100
%Quality Rate =
Actual Output

%Rework =

%Waste =

Rework

x 100

Actual Output
Waste

Actual Output

x 100

Productivity KPIs
%Performance Rate =
Theoretical Cycle Time x Actual Output x 100
Operation Time
%Availability Rate =
Operation Time - Downtime x 100
Operation Time

Productivity KPIs
%OEE (Overall Equipment Efficiency =
%Availability x %Performance x %Quality Rate
10,000

OEE

%Availability x %Performance x %Quality/10,000

%Availability =

%Performance =

%Quality =

OEE
%Availability Rate =
Operation Time - Downtime x 100
Operation Time
%Performance Rate =
Theoretical Cycle Time x Actual Output x 100
Operation Time
Actual Output - Defect x 100
%Quality Rate =
Actual Output

OEE ( )

500 1

480
30
500 9

0.8 /

OEE
%Availability = (480 30)/480 = 94%
%Performance = (0.8 x 500)/450 =
89%
%Quality = (500 9)/500 = 98%
%OEE = (94 x 89 x 98)/10,000
= 82%

Productivity KPIs
%Breakdown =

Breakdown Time
Operation Time

x 100

Breakdown Times = Number of Breakdown

Number of Stoppage
Number of Minor = Below 10 min. and no
Stoppage
Change of Spare Part

MTTR, MTBF
MTTR = Mean Time To Repair

MTBF = Mean Time Between Failure

Weekly plan

Sun Mon Tue

M/C
A
M/C
B
Production

Wed Thu

1500

Fri

4000
20 hrs

Sat
3000

2000

2500

4
Planned Maintenance

Repair Time

No Plan

Example
Sun Mon Tue

Wed Thu

Fri

Sat

4.25-4.35
10
3.30-3.50
20
22.25-23.00

21.50-22.20

35

30
3.20-4.20
60
610
22.00-8.10

Productivity KPIs
Available Time x 100
%Machine Availability =
Total Time
Used Time x 100
%Machine Utilization =
Total Time
Effective Time x 100
%Operation Efficiency =
Operation Time

Quality KPIs
Average Rejection Case by Customer
Average Rejection Case by QA
Capability Index =

USL - LSL
6SD

USL = Upper Specification Limit

LSL = Lower Specification Limit
SD = Standard Deviation
Uncontrollable

Controllable

1.00

Good Control

1.33

Quality KPIs
Number of Quality Kaizen
Total Rejection x 100
%Rejection =
Actual Output

Cost KPIs
Conversion Cost = Cost used for conversion
of Raw material to Product
1. Production direct, indirect and service cost.
2. Purchasing, Planning and Supply support cost

* Usually showed in unit cost

Cost of Waste Disposal
Cost of Quality = Cost of Poor Quality
+ QA Conversion

Cost KPIs
Inventory of Spare Part = Cost of Spare Part
Inventory
Inventory of Material = Cost of Raw Material
and Finished Goods
Inventory
Inventory of WIP = Cost of Work-InProcess Inventory
* Usually showed in % of Produced Product

Cost KPIs
Production Direct Cost =
Direct Labor + Depreciation + Other Direct
Product Volume
Production Indirect Cost =
Indirect + Other Indirect
Product Volume
Repair & Maintenance Cost

Delivery KPIs
Actual Output x 100
%Output Reliability =
Planned Output
Number of Target Hit x 100
%Plan Attainment =
Number of Production Run

Safety KPIs
%Accident Frequency Rate =
Lost Working Time + Restricted Working Time
Total Working Time
Number of Safety Suggestion
Number of Unsafe Correction
Number of Incident
Number of Accident

Morale KPIs
Absent Employee x 100
%Absent =
Total Employee

Kaizen Rate =

Training Rate =

Number of Kaizen
Total Employee
Total Training Hour
Trained Employee

Using of KPIs
5W-1H
What data should be collected
Where location of machine/working place
Who take action to report KPI
When timing and frequency of report
Why meaning of KPI
How to collect data

Using of KPIs
MOTSAP

To produce the best quality product in

Thailand with lowest cost
1.
2.
3.
4.

Reduce customer rejection

Reduce defect
Increase productivity
Reduce labor cost

Strategy

1.
2.
3.
4.
5.

%Rejection = 0
Reduce %Defect 50%
Increase %OEE 5%
Increase labor productivity 30%
Reduce downtime 50%

Action

Quality kaizen, TPM, Inspection

Policy
Mission
Objective
Target

Plan

Establish projects
Establish plans