"KPIs from a Lean Perspective: Achieve Goals, Reduce Waste"

Ramon Vorne

Plant Engineering

July 2007, pp. 49-52

The author of this article states that Key Performance Indicators (KPIs) "are important for the plant floor because they are highly effective for exposing, quantifying and visualizing muda (the Lean term for waste), and they are also highly effective motivators."

The article provides a list of KPIs suited to various objectives:

• To reduce downtime—KPIs are total downtime; downtime events; changeover time; and OEE (Overall Equipment Effectiveness) availability
• To optimize cycle times—KPIs are average cycle time; slow cycles; small stops; and OEE (Overall Equipment Effectiveness) performance
• To improve quality—KPIs are first pass yield; startup rejects; production rejects; and OEE (Overall Equipment Effectiveness) quality
• To meet customer demand—KPIs are takt time; performance to takt; piece variance; and estimated time to completion
• To improve productivity—KPIs are run rate; pieces per labor hour; total effective equipment productivity (TEEP); and OEE (Overall Equipment Effectiveness)

A list of characteristics of effective plant floor KPIs is also presented:

• The KPI is aligned with top-level strategic goals
• The KPI is actionable (can be influenced) by plant floor personnel
• The KPI is a current or forward-looking metric
• The KPI exposes and quantifies waste
• The KPI provides an early-warning system for anomalous processes
• The KPI is updated frequently (in real-time for current metrics)
• The KPI is ‘owned’ by an individual (accountability is established)

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