7 KPIs for Process Efficiency in Lean Manufacturing

pressure-1531526_640Lean manufacturing and its many concepts, like Kaizen and Just-in-Time, are used to drive productivity and improve processes through limited wastes. In order to determine the effectiveness of the strategies, companies need to assess, analyze, and track success in relation to the goals and objectives. Some of these assorted variables for lean are known as Key Performance Indicators, or KPI.

KPIs are set for all aspects of an operation, and include everything from production to quality. In Lean, process efficiency is a major focus. So to help you determine the success of your Lean initiative, here are 7 important KPIs for process efficiency:

  1. Overall Equipment Effectiveness (OEE)– This is the combination of plant availability, performance efficiency, and the quality of a specific plant. (Plant Availability x Quality x Performance Efficiency.) The factors in this equation are determined by these three calculations:
    1. Plant Availability = Operating Time/Net Available Time
    2. First Time Through (Quality) = Total Parts Run – Total Defects/Total Parts Run
    3. Performance Efficiency = Total Parts Run x Ideal Cycle Time/Operating Time
  1. Customer/Total Lead Time – This is the actual time it takes from when your customer orders your product to when he or she receives it. The three factors that determine this are order processing time, production lead time, and delivery lead time.

First Time Through Yield – This is also known and FTT, or the Quality measure listed in OEE. While it is included in another KPI, it stands on its own.

  1. Production Target – This is the amount of production volume for your plant or process that you want completed in a specific timeframe.
  1. Downtime – This is the period when a plant is not producing products or adding value, like maintenance or a breakdown
  1. Uptime – Quite obviously, this is the opposite of downtime, and determines the available time to run. A couple equations to use, depending on the situation:
  1. Plant Uptime = Plant Run Time (Production) / Total Available Time to Run or Produce
  2. Plant Run Time = Total Available Time to Run – Scheduled and Unscheduled Downtime/Stoppages
  1. Productivity – This measures how each unit of labor is used to make a unit of output. A simple formula for this is Labor Productivity = Units of Output (or production costs)/ Units of Labor (or labor costs)

Tracking your process efficiency is an important step in measuring the success of your Lean initiative. If you’re not scoring as well as you feel you should, ask yourself a few questions:

  1. Am I using SMART goals? (Specific, Measurable, Achievable, Realistic, and Timely)
  2. Is everyone implementing the Lean strategy as they should?
  3. Are there other tools and/or equipment necessary to improve the Lean process?

The right tools and equipment can catapult your Lean efforts. Using multi-functional equipment that’s meant to improve safety and productivity will enhance efficiencies. Battery-powered tugs are a great example of equipment very commonly used in Lean objectives, with or without a true Lean concept.

If you’re not optimizing the flow of materials in your facility, talk to Load Mover Inc. about whether a power tug would make a significant improvement to your process. We can help you determine not only if this equipment would help you, but also how to use it for the greatest ROI. Contact us: 952-767-1720 or info@loadmoverinc.com.