Download presentation
Presentation is loading. Please wait.
1
Key Performance Indicators - KPI’s
Training Pack Training Pack Airbus Production System Key Performance Indicators - KPI’s Module: Workplace Management Element: KPI’s © Copyright Airbus UK Ltd 2002 All rights reserved. No part of this presentation may be reproduced in any form or by any means without the written permission of the copyright holder.
2
Aims & Objectives Target Audience : Site Management to Team Leaders
Purpose of Module :To ensure employees have the skills to quantify impact, and provide timely direction for an individuals contribution ( at all levels) towards achieving overall business goals Aims & Objectives : How to define & measure our given business goals Why have KPI’s How clarity of objectives improves motivation and delivers performance Standardised approaches to KPI’s How to translate and cascade KPI’s at all levels Explain links to Performance Management
3
Key Performance Indicators
Course Outline INTRODUCTION WHAT ARE KEY PERFORMANCE INDICATORS? CHARACTERSITICS OF A GOOD KPI EXAMPLES OF KPI’S THE KPI CASCADE PROCESS HOW TO CREATE AND MANAGE KPI’S SUMMARY Objectives:- To understand what a KPI is for To be able to interpret and ask questions using KPI’s To be able to get involved in creating and managing KPI’s 3
4
Key Performance Indicators
Introductions Name Department Length of service Knowledge of Key Performance Indicators Start with the presenters then round the training room asking each delegate their name location and any knowledge of Lean they have. Presenters to give name, position and where they learnt about Lean, which company, which customers, what products. Emphasis that the Lean tools are aimed at the waste in any system. This ice breaker helps settle the group and get more participation latter.
5
What are KPI’s Flip Chart Ask the group for their thoughts onKPI’s
Use flip chart to capture the ideas the group has on KPI’s
6
Key Performance Indicators
WHAT ARE KPI’s FOR? TO COMMUNICATE STATUS - ACTUAL v TARGET PLANT LEVEL BUSINESS LEVEL WORK STATION LEVEL TO DRIVE IMPROVEMENT BY FACT NOT GUESSWORK TO HELP PRIORITISE IMPROVEMENT ACTIVITY A CONTINUAL HEALTH CHECK FOR THE BUSINESS TO CONNECT THE CUSTOMER TO THE PROCESS Using flip chart What should KPI’s do for us? Are there different types of KPI? Who are they for?
7
Key Performance Indicators
ESSENTIAL IMPORTANT TO THE VIEWER VITAL - AFFECTS THE BUSINESS CUSTOMER FOCUSED DRIVES IMPROVEMENT
8
Key Performance Indicators
USEFUL CURRENT - UP TO DATE EASY TO UNDERSTAND IMPORTANT AND RELEVANT VIEWER CAN CONTRIBUTE HAS A STAKE CAN HAVE AN EFFECT (good and bad)
9
Key Performance Indicators
IMMEDIATE URGENCY / OWNERSHIP RESPONSIBILITIES DEFINED DYNAMIC IMPROVEMENT PLAN AUDIT PROCESS - ACTUAL V’s PLAN CLEAR OBJECTIVES
10
Key Performance Indicators
WHAT ARE KPI’s NOT? GROUP OF METRICS NOT EVERYTHING WE MEASURE IS A KPI ! STATISTICS THESE CAN HELP DEFINE KPI’s WORK MEASUREMENT A TOOL FOR BLAME WALL PAPER Using flip chart What are bad examples of KPI’s? Used for the wrong reasons. Not easy to understand. Not managed - out of date. Key point A bad or mis-managed KPI is worse than no KPI.
11
Key Performance Indicators
CHARACTERISTICS OF GOOD KPI DYNAMIC WELL MANAGED - ROTATE VITAL FEW OWNED AND OPERATED BY LOCAL TEAM SIMPLE EASY TO UPDATE - MANUAL VISUAL LOCATED WHERE EASY TO SEE CHANGES JUMP OUT AT VIEWER ENGAGING RELEVANT - CREATES TALKING POINT STANDARD FORMAT EASY FOR OUTSIDER TO UNDERSTAND FEEDBACK RECORDED AND ACTED UPON Using flip chart What would make a good KPI? Any examples they have seen. What would they like to see?
12
Key Performance Indicators
Business KPI’s Safety Performance Quality Performance Cost Performance Delivery Performance People Performance Any others? Refer to original list on flip chart EG. Safety Non Right 1st Time Productivity OEE Cost of Quality etc…..
13
Plotted Against Target
Examples Actual Performance Plotted Against Target Defects Per Assembly Unambiguous Title Visual Indicator of Performance Trend 600 500 400 300 200 Legend Easy To understand 100 Target Improvement Good example Jul Jan Jul Sept Nov Mar May Sep Nov Machining Sub Assy Assembly Test 2001 Target
14
Examples RAG Colour Coding RED Outside of target with no improvement
or deteriorating trend. AMBER Inside of target but with deteriorating trend. Outside of target but with improving trend. GREEN Inside of target with improving or level trend. Not easy - think of examples where it does not work Needs Involvement Needs Ownership Needs Feedback Needs to drive improvement
15
Examples Scrap Cost 2004 No. Of Items £ 16000 80 14000 70 12000 60
YTD Scrap Cost: £34.0k 14000 70 12000 60 10000 50 No. Of Items 8000 40 6000 30 Other examples 4000 20 2000 10 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Scrap Cost Scrapped Items Budget
16
Examples Schedule 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
How are we doing against the plan? Are we on target? Schedule 100% 90% 80% 70% 60% 50% 40% 30% 20% Other examples 10% 0% Stage 1 Stage 2 Stage 3
17
External Supply Schedule Adherence
Examples What are we aiming for? External Supply Schedule Adherence 100% 80% 60% 40% Other examples 20% 0% 23 24 25 26 27 28 29 30 31 32 33 Supplier 1 Supplier 3 Supplier 5 Supplier 2 Supplier 4
18
Examples WIP WIP Value Product A WIP Value Product B WIP Budget
9000 3.5 8000 3 7000 2.5 6000 2 5000 £ '000 Stock Turns 4000 1.5 3000 1 2000 Other examples 0.5 1000 Nov 99 Jun 00 Sep 00 Oct 00 Nov 00 36951 37043 WIP Value Product A WIP Value Product B WIP Budget Stock Turns
19
Examples Other examples
20
Examples Other examples
21
Performance Management Cascade
Step 1 - Team Leaders manage the Key Drivers of performance Are we fully manned to complete the workpackages? Is overtime under control? Are we hitting targets (Minutes to complete Operations)? Step 2 - Manager holds daily Team Leader review by work package Actions timely and focused Support given when needed Stage 1 Jig Board Minutes to complete Op 1 Minutes to complete Op 2 Step 3 - Assembly Managers review Weekly Performance withManagers. Cost accountability introduced. Focus on shift by shift performance. The KPI’s are useless unless they are managed through a Performance Management Process Go through the 6 steps Step 1 Team leader data collection Step 2 Manager reviews data at daily meeting Step 3 Ops Manager review &
22
Performance Management Cascade
Step 4 - Head of Business reviews Weekly Performance Good informed debate resulting from upward cascade of Team Leaders’ performance Countermeasure plans if targets not being met Step 5 – Senior Management Team reviews Monthly performance Senior level escalation plans. Step 4 Head of Business weekly review of performance Step 5 Manufacturing management team monthly review &
23
Performance Management Cascade
Step 6 - Site Cost Performance consolidated. Manufacturing Director reviews Factory Manager Performance. Forecasts of cost performance compiled to ensure corrective actions taken to achieve “Budget”. Risks & Opportunities monitoring and control. Step 6 Site wide performance reviewed with partners &
24
What KPI’s do you think would be applicable to your area
Flip Chart Ask the group for their thoughts Use flip chart to capture the ideas the group has on KPI’s for their area Eg’s Waste elimination Delivery Schedule adherence Takt adherence Overtime Right first time Efficiency / Profit Timely Customer Orientated Continuous Improvement Reducing man hours
25
How to Create and Manage KPI’s
Identify Customers and Suppliers Monitor Progress To Plan And Take Corrective Action Determine Performance Drivers1 Form Improvement Teams Form Team PLAN Continuous Improvement Cycle DO CHECK ACT Create Improvement Plan Define Local Performance Indicators Collect Data Score & Prioritise KEY Performance Indicators This is the 12 step process to create KPI’s Talk through each one Train Users Identify owners and users Develop Format And Review Process
26
How to Create and Manage KPI’s
Identify Customers and Suppliers Determine Performance Drivers Form Team Define Local Performance Indicators Score & Prioritise KEY Performance Indicators
27
How to Create and Manage KPI’s
Ease of recording data Impact on business Frequency of occurrence This shows Define and Prioritise stage. Define Local Performance Indicators & Score & Prioritise KEY Performance Indicators
28
How to Create and Manage KPI’s
Identify Customers and Suppliers Determine Performance Drivers Form Team Define Local Performance Indicators Score & Prioritise KEY Performance Indicators Identify the owners and develop a review process WHO WHAT WHERE WHEN HOW Identify Owners and Users Develop Format And Review Process
29
Example Data collecting sheet to feed into the performance indicators
&
30
How to Create and Manage KPI’s
Identify Customers and Suppliers Determine Performance Drivers Form Team Define Local Performance Indicators Score & Prioritise KEY Performance Indicators Train people to use the indicators…..This is critical as they must all be trained exactly the same way,to ensure repeatability and reproducibility (Gauge R & R). Train Users Identify Owners and Users Develop Format And Review Process
31
How to Create and Manage KPI’s
Identify Customers and Suppliers Determine Performance Drivers Form Team Create Improvement Plan Define Local Performance Indicators Collect Data Score & Prioritise KEY Performance Indicators Collect the data and create an improvement plan. This is done by agreeing targets for improvement based on the site targets and following the initial data collection you will have a much better understanding of what you are capable of. Train Users Identify Owners and Users Develop Format And Review Process
32
How to Create and Manage KPI’s
Identify Customers and Suppliers Monitor Progress To Plan And Take Corrective Action Determine Performance Drivers Form Improvement Teams Form Team Create Improvement Plan Define Local Performance Indicators Collect Data Score & Prioritise KEY Performance Indicators Once you have created your KPI’s you should monitor the relevant of them regularly, by going through the process again. Always ask your customer if they want anything different than you are providing them. Train Users Identify Owners and users Develop Format And Review Process
33
Key performance indicators need to be simple and focused
Typical KPI’s KPI - examples Target Quality Defects (Defects per unit) Errors (errors per unit) Delivery Schedule adherence (Hours delta to plan) Cycle Time (Hours per Unit) Cost Manning (man hours per set) (Cost per unit) People Skill Level Training Hours 1 Defects per unit 2 errors per unit 0 delta (nil Hours behind or ahead of plan) To be agreed 270 hours per unit £5,000 per unit 75% people trained to Practitioner Level 40 hrs per man per year Key performance indicators need to be simple and focused
34
KPI’s SUMMARY Direct relationship to business plan
Communicates progress against plan Drives continuous improvement Visual - provokes a response Effective - simple and easy to understand Ownership - relates to everyone Up to date - dynamic management
Similar presentations
