INDICADORES DE DESEMPEÑO CONVIVENCIA Y PAZ

When it comes down to it, commitment to change is essentially a philosophy. Change is not easy for some individuals. In truth, for some people, change is extremely difficult, because it rocks the boat and makes things that were familiar suddenly become unfamiliar.

It is also difficult to get people to embrace change as a positive measure. And there is no perfect template to follow when adapting to change or teaching others to adapt. The challenge lies in getting everyone to see change as valuable and necessary and ultimately the best way to ensure success. Effectively, change is not in our words; it is our actions.

To avoid lean implementation failures on the shop floor, management must first establish the foundation for success by developing goals and metrics to improve cost, quality, and delivery. Improvements in these areas will have a profound impact on the company's financial strength as well as overall growth. Actions should always follow words. Don't simply state, "We are doing lean"; demonstrate it by taking action. This important concept is what I call the strategic purpose.

The strategic purpose is an effective way for management to demonstrate its commitment to the lean program—and to the lean philosophy of continuous change and continuous improvement—beyond inspirational speeches and company declarations. A company's strategic purpose serves as a guideline for implementing lean processes and sustaining positive change. (Some individuals refer to the strategic purpose as a lean strategy.)

A key part of creating your strategic purpose is to establish a list of critical shop floor metrics that can be measured and quantified. On the production floor, these metrics are often called KPIs, or key performance indicators.

Here are the most commonly used shop floor metrics:

Productivity Quality

Inventory or work in process (WIP) Floor space use

Throughput time

Productivity

Productivity can be measured in a variety of ways. A productivity measurement requires some kind of input: labor dollars per unit, the distance product travels per person, pound per machine, bag per person, and so on. Or you can compare something like labor hours to standard cost hours. All these are examples of productivity measurements.

Productivity is improved when products are manufactured with, for example, less effort, fewer workers, less equipment, and less use of utilities (overhead). Because lean is about managing costs,

and not cutting costs, manufacturers need to adopt a smart approach in attempting to achieve minimum effort. Supervisors and managers always seem to be concerned about speed, but productivity is not about speed; rather, it is about pace. Over the years, manufacturing professionals have had a misconception about productivity. Working hard and fast to excess is not conducive to good quality and safety. Human beings can sustain 100 percent speed only to a point without negatively affecting quality or seriously negating safety factors. So 100 percent pace makes no sense.

Lean manufacturing is about working smart, at a pace that is sustainable, while safely producing the required number of good-quality products in a given time period. There is a methodical approach to designing a process that creates a smart pace, allowing managers and engineers to calculate accurate worker requirements (I discuss this in Chapter 4, Early Stumbling Blocks).

Productivity is directly related to cost. Therefore, it is the most important shop floor metric in your strategic purpose. Focusing on the efficiency of the production operators is critical, because they are considered value-added; they build product, and that, in turn, pays the company's bills. If you adopt a more efficient process and require fewer personnel, you will dramatically improve cost. Using fewer personnel equates to, for example, less labor, fewer tools, fewer workstations, less documentation, and less material. Fewer people handling product also equates to improved quality. Unnecessary people working on the product, in an uncontrolled and poorly designed process, can increase the chance of quality errors, not to mention safety issues. It also improves delivery because it means having fewer processes, fewer people, fewer transactions and systems, and fewer places the product must travel before landing in the customer's hands. These are key points that contradict the old philosophy of simply throwing more bodies at a line in order to meet deadlines.

The important thing to remember is that it's best to manage costs and redeploy personnel as areas become more proficient due to improved processes. Don't just cut people! That is not the lean philosophy. Proper worker allocation is the best approach.

Quality

Quality is one of the key shop floor metrics in the strategic purpose. However, before adding it to the list of metrics, you must make a decision: how you will measure quality. Surprisingly, I have witnessed many companies, large and small, that do not measure quality—a big mistake. Quality should be measured both internally and externally. Some companies use customer complaints as the external measure, simply keeping track of the number of complaints per month and the cost of problem resolution—warranty costs, cost of service calls, and so on. Although those costs are important, you should also track internal costs: rework costs, scrap costs, parts per million (PPM), the number of rejections, and so on.

Quality can be measured in a variety of ways, and it depends on your products and processes. No matter which method you choose, a measurement of some kind must be in place.

It is difficult to improve quality if the production process has significant design variability, a lack of cross-training among line operators, unreliable equipment, outdated documentation, or poor flow. Although it takes many steps to refine these elements, it is difficult to gauge quality improvements until refinement occurs (as discussed in Chapter 4). Quality is improved when you reduce the number of defects, rework, scrap, and external complaints. With this error reduction, you will spend less time and money reacting to problems after they occur. Delivery will be improved when you reduce

downtime created by line stoppages. A controlled manufacturing environment promotes good quality, with predictable lead times, and these factors will definitely please customers.