Continuous improvement KPIs

Stanton McGroarty says continuous improvement is the soul of manufacturing competitiveness.

By J. Stanton McGroarty, CMfgE, CMRP, senior technical editor

A leader who is resting on his laurels wears them on the wrong end. Continuous improvement is the soul of manufacturing competitiveness. It must be led, and success must be rewarded to guarantee future success.

Once the production team members in a facility are thoroughly familiar with the rules and the reality of the production system in their plant, they are ready to start improving it. They are positioned to suggest the kinds of subtle improvements that make them the brains of a manufacturing organism. Continuous improvement is a natural process but it is not automatic.

The first step of continuous improvement is the proposal of improvement ideas. Team members who value their participation in a learning organization become a constant source of useful thoughts. To help the process continue, managers need to acknowledge that it is taking place and that it is creating useful change. Ideas that are submitted must be carefully reviewed and acknowledged to the submitters. An intelligent technician will not have many ideas disappear “down a well” before concluding the company isn’t serious about improvement. Even ideas that aren’t enacted should be discussed and, if appropriate, clarified or improved by a supervisor or peer group. Counts of submitted ideas should be handled as performance items in both the submitters’ and their supervisors’ reviews.

Ideas that are selected for action should be identified and placed into a publicly visible schedule. Most can be scheduled for tech review, modeling, design, and installation by an area supervisor teaming with the engineer who will perform the technical work. Unless the ideas are complex, these schedules should be in days, not weeks. Some organizations review ideas and report daily on progress, at the beginning of the shift. This demonstration of urgency helps everyone understand the importance placed on continuous improvement. Safety suggestions can also be handled in the same chain when this kind of energy is applied. Further discussion of this way of life is available at www.plantservices.com/articles/2013/06-plant-profile-toyota.html, and a picture of a safety dojo where improvements are tracked is part of this safety story at www.plantservices.com/articles/2013/07-plant-safety-brothers-keeper.html.

J. Stanton McGroarty, CMfgE, CMRP, is senior technical editor of Plant Services. He was formerly consulting manager for Strategic Asset Management International (SAMI), where he focused on project management and training for manufacturing, maintenance and reliability engineering. He has more than 30 years of manufacturing and maintenance experience in the automotive, defense, consumer products and process manufacturing industries. He holds a bachelor of science degree in mechanical engineering from the Detroit Institute of Technology and a master’s degree in management from Central Michigan University. He can be reached at smcgroarty@putman.net or check out his .

Part of the engineering phase of each improvement should be the development of a simple, pro forma business case. The safety impact and business case information for implemented improvements is a second performance item for engineering and supervisory staff. The nurturing and implementation of continuous improvement ideas is an important part of their jobs, as is the delivery of the resulting savings and safety improvements.

Getting started

Most organizations have a small group of engineering and production people who already make a practice of continuous improvement, even in the absence of an official program to support them. Identify these people and use them as consultants in starting the official program. There are two reasons for doing so. First, you will get a great deal of useful help and information from those who have already succeeded in continuous improvement. Second, you will not be setting up the new program in competition with the people who have already been contributing the kind of help you are trying to generate.

If possible, identify some recent successes that the unofficial team have delivered and build the business cases for them. This will demonstrate the value of the approach and create some recognition for those who have already made contributions. Be certain to give credit where it is due, or the process will backfire.

Develop a process flow template for new suggestions, using the approach that has worked for your organization. Set the success stories into the project template you wish to use, noting at least the following measuring points for each:

  • suggestion originator, date and short description
  • supporting manager with approximate review dates
  • technical developer with dates and short description
  • delivery date with installation person or team
  • type and value of benefits, usually in annual amounts.

Develop typical durations for key processes like review/approval, technical development, business case development, pilot testing, training, and installation. Build a table to support efficient review of live projects and set up a meeting schedule to ensure daily updates of shop floor improvements and weekly or monthly review of major projects. Make the table part of your visible plant. You want employees who enter suggestions to become vocal customers of the implementation process.

Your KPIs will include the number of suggestions that have passed through each of these project steps per unit of time, usually a month. Suggestions made, reviewed, piloted, delivered, and audited are all useful measures of monthly project activity. Dollars of profit or savings, time saved, and quality improvements are measures of success.

Charge managers with the accumulation and progress reporting of continuous improvement suggestions. Also seek their help in setting financial and safety objectives for their areas. You want managers lobbying for help in developing and implementing procedures to move continuous improvement forward. Empower them to take away their own excuses.

Begin the process by describing success stories that show how improvement projects move through the evaluation and implementation processes. Describe how they finally deliver concrete benefits. This will lend realism and a sense of urgency to the effort.

In a large organization, a small pilot project may be advisable, but continuous improvement should be a company-wide value. However large or small the start, recognition and rewards for successful participants should begin as soon as concrete results can be measured. Results should be stated in financial or other business terms. Progress can be measured using the above KPIs, but project success is stated in the terms like sales, profit, and customer service that add up to corporate success.

Once the payoff begins, remember to celebrate the participants. Continuous improvement is a source of pride that keeps on giving to participants as well as stockholders. Measure it and celebrate the results.

Read Stanton McGroarty's monthly column, Management Measures.