You shouldnt manage the plant in the dark. If you havent already, its time to develop visible indicators so you can see where youre going. A key performance indicator (KPI) dashboard can help you manage more effectively. These dashboards can indicate capacity, percent quality, uptime and any other relevant, user-defined variables you find necessary. Plant managers, especially, need a KPI dashboard to show them, in clear terms, the current status of every system under their control.
Industrial revolutionary Peter Drucker said, You cant manage something you cant control and you cant control something you cant measure. By indicating key measurements, the dashboard supports the right decision at the right time.
When identified and aligned properly, KPIs can save a plant and a plant managers job and career. If upper management truly understood the power of KPI dashboards, the situation on the plant floor would quickly improve. In fact, without an effective KPI dashboard, youre lost and have little hope of ever escaping the reactive environment.
Think of driving a car with the windshield blacked out. You cant see where youre going, but the rearview mirror gives you a glimpse of where youve been. You dont know if you were successful until its too late or disaster strikes. This lack of management control is a serious problem that annually costs industry billions of dollars.
A ships captain wants to see all the gauges from the ships bridge but expects the crew to ensure the vessel is in control and on course. Similiarly, the plant managers classic KPI dashboard is a distillation of all the plants KPIs. Its easier to interpret colors instead of a bunch of numbers, so key your KPIs as red (bad), amber (headed for trouble) and green (on target). The plant management team should develop the red-amber-green guidelines based on information provided by senior company leadership.
Color-coded outputs should appear on the dashboard for each functional area, such as maintenance, production and engineering. The plant managers dashboard should reflect the worst-case scenario: If an individual maintenance department KPI is red, the plant managers dashboard should show red in the maintenance area.
A plant managers KPI dashboard might include unit cost of production, sales forecast and overall equipment effectiveness (OEE). The latter metric is the number one driver of plant capacity, cost and success. Once a KPI toggles to amber or red, the person responsible for that metric must report to the plant manager within a fixed time frame to first, explain the nature of the problem; second, whats being done to correct it and third, when that KPI will return to green status. If these questions arent answered in the allotted time, the red signal automatically rolls up to the KPI dashboard for the next higher level of management.
OEE should be on every plant managers KPI dashboard. OEE is a function of availability, performance and quality:
Availability is related to how closely the plant maintains a 24/7 production schedule. It identifies the hidden plant. Ive heard of many plant managers scheduling overtime to make up for downtime losses. I know you might find this amazing, but they actually believe this is acceptable behavior. Losing money is never acceptable to me.
Performance rate is either the best rate ever sustained in a production process or the design rate, whichever is greater. If equipment isnt running at the required rate, someone needs to identify the problem and formulate a solution. If you cant resolve a problem in-house within three days, admit that youll never solve it. Stop the losses. Call someone from the outside to fix things.
Quality rate only counts first-pass quality. Plant managers have told me they can sell non-first-pass quality or they merely recycle the parts. Wake up. You must accept only first-pass quality. Anything less translates to financial loss.
Each production line should report its OEE to the plant managers KPI dashboard. It should be possible for the plant manager to drill down on the aggregate figure to see which production line has the problem and to identify whether the problem is related to equipment availability, performance or quality. Each of these factors should be color-coded, with a single person assigned responsibility for each factor. The plant manager takes no action unless the responsible person doesnt provide timely answers to the three questions an amber or red indication should always prompt. This approach manages behavior and doesnt punish for not performing to a specific level.
For example, a production lines OEE might be coded red because unscheduled downtime is forcing availability downward. The production manager responsible for that lines reliability should work with the maintenance manager to ensure asset reliability is high and thus unscheduled downtime is a rare event.
The production manager might report to the plant manager that the reason for the red is a conveyor gearbox problem caused by an ineffective PM program, a point noted in the maintenance managers dashboard, which tracks PM labor hours against emergency labor hours. The gearbox was replaced, a new PM program was developed and the P-F interval was adjusted. The production manager expects line availability to go green within 24 hours. This information is passed to the plant manager via e-mail and isnt mentioned in a meeting in front of peers.
This example is a small part of the entire KPI dashboard process. My advice is to take it one step at a time. Contact me if youd like more information about KPI dashboards.
Also, Ill offer my time for free to two plants (via e-mail and the telephone) to help them develop successful KPI dashboards. Selection will be based, among other factors, on the degree to which the plant leadership is committed to the project.
All personnel must be involved in the plants success and a KPI dashboard that extends from the plant managers desk to the lowest level is a key element. If you would like more information about OEE, refer to my book Lean Maintenance, especially the sections on the 11 Major Losses and OEE. If you follow my advice, Id like your feedback to help me better help others.
E-mail Ricky Smith at email@example.com