17 key metrics-glass wall

Key Metrics

17. KEY METRICS

The Delphi Manufacturing System Key Metrics material provides concise definitions of the key manufacturing metrics. These definitions ensure that common performance measures are tracked division-to-division and plant-to-plant. This manual is to be used by all Delphi Manufacturing Operations. It is intended, through this publication, to standardize Delphi Key Metric information across the world. This standardization is the foundation from which Delphi communicates and tracks continuous improvement. The Key Metrics defined in this manual are not all-inclusive and should not be considered as such. Due to the diversity of processes, people and cultures, any one team, group or facility may track other metric information. A plant site is required to use these metrics to communicate key manufacturing strategic objectives to all employees and accelerate continuous improvement in their facility. Post these Key Metrics throughout the facility to enhance plant floor communication. For optimization of the plant manufacturing system, analyze these metrics as a group. Optimization of any one metric can be detrimental to another. For this reason, it is necessary to analyze these metrics as a set in order to manage improvement strategies and resources. Due to the variety of products, organizations and types of facilities within Delphi, every issue associated with applying these Key Metrics cannot be addressed in this manual. Common sense, along with focusing on the intent of these measures, should always be considered when dealing with the data and aggregating numbers to calculate plant totals.

Delphi Confidential. Uncontrolled Copy. Reference Only. Publication Date - February 2, 2005. Revised - Apri 21, 2005.

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Key MetricsMetric Focus and Review

Metric Focus and Review

To ensure performance improvements are occurring at Delphi manufacturing locations, frequent review of relevant key manufacturing metrics is done as part of the Glass Wall process. The focus is on trend analysis, rather than on month-to-month variation. Shown in the chart below are the metrics measured and/or reviewed on a consistent basis within the organization. Measurement points for each metric are described as Required (R) or Optional (O). Except where noted, plant metrics are aggregated into Divisional and Corporate performance. The chart also functions as a reference for locating specific metrics within this manual.

Page Measurement Function Plant Value Stream/

Department

Cell/Line/ Process

Health and Safety 17-3 Lost Work Day Cases per 100 Employees Mfg. R O

17-3 Recordable Rate per 100 Employees Mfg. R O

Quality 17-5 Rejected/Returned Parts per Million (PPM) Quality R O 17-7 Supplier Parts per Million (PPM) Quality/Purch R 17-9 Customer Disruptions (Spills/Downtime) Quality R O 17-11 Worldwide Formal Customer Complaints

(WFCCs) Quality R O

17-13 First Time Quality (PPM, % at Goal) Quality R O R Operational Availability 17-15 Operational Effectiveness (%, % at Goal) Mfg. R O R Cost and Lean Manufacturing

Performance

17-21 Ship Window Compliance (IPM) PC&L R O 17-23 Schedule Attainment (%) PC&L R O R 17-26 Inventory Turns PC&L R O 17-28 Manufacturing Expense Improvement

(% Year Over Year) Mfg. R O

17-30 Manufacturing Expense (as a % of Sales) Mfg. R O 17-32 Premium Freight Expense ($) PC&L R O 17-34 Scrap Expense ($) Mfg. R O 17-36 Hourly Overtime (% of Straight Time) Mfg. R O 17-38 Productivity (PPH) Mfg. R O R 17-40 TPc/t Improvement % * Mfg. O O 17-45 Manufacturing Fundamentals in Place % * Mfg. R O * Plant metric is not aggregated into Divisional or Corporate performance.


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Key MetricsLost Work Day Cases per 100 Employees

Recordable Rate per 100 Employees

Lost Work Day Cases per 100 Employees Recordable Rate per 100 Employees

Definition Measures of work environment safety, illness and injury data.

Intent Use to assess the level of risk employees are subject to in the work environment and to generate action plans to minimize this risk. This measure is for the previous 12-month period, not year-to-date or for the quarter.

Formula

Lost Work Day Case Rate = Monthly Total x 200,000

Monthly Hours Worked Salary & Hourly

Recordable Rate = Monthly Total x 200,000 Monthly Hours Worked Salary & Hourly

Application/Information • Both measures are tracked by plotting individual monthly data points and maintaining a

rolling 12 month average for each measure. • The data to compile the Lost Work Day Case Rate and the Recordable Rate is located on

the OSHA 300 log maintained for each U.S. facility. For the Lost Work Day Monthly Total add the totals of columns 3 and 10. These columns are checked if the injury involved one entire day away from work. Do not include the totals of any days of restricted work in this total. For the Recordable Monthly Total, add the total of columns 2, 6, 9 and 13. 200,000 hours is the equivalent of 100 employees working one full year. Monthly Hours Worked Salaried and Hourly is the cumulative hours worked by all employees.

• All leadership, hourly and salary, must review Health and Safety data monthly with emphasis on the review of safety programs and processes that will drive improved results.

• The Health and Safety process is generally a joint activity and should assure each employee's well being. The Delphi Strategy Board has embraced Health and Safety as the overriding priority of our corporation and the belief that all incidents are preventable.

• It is appropriate to elevate the communication and awareness of the recordable injuries and near misses. Each location is encouraged to create a communication system that ensures organization-wide awareness.

Measurement Point • Lost Work Day Cases are measured at the plant level. • Recordable Rate is measured at the plant level. • Pant report data is aggregated to create Regional, Divisional and Corporate reports.


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Key MetricsLost Work Day Cases per 100 Employees

Recordable Rate per 100 Employees Frequency of Measurement • Lost Work Day Cases are measured daily and reported on a monthly basis. • Recordables are measured daily and reported on a monthly basis.

Example Reporting Format

DelphiLost Work Day Cases

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Monthly Rate Annual Rate Improvement Target Goal

Lost Work Day Cases per 100 Employees

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Annual Rate: 0.16Improvement Target 0.39Goal 0.12

2004 Year End Goal 0.12

Delphi Confidential

Monthly Rate: 0.10

Monthly Rate: 0.85

DelphiRecordables

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Total Recordables per 100 Employees20.27

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Annual Rate: 0.98Improvement Target 2.40Goal 1.10

2004 Year End Goal 1.10Delphi Confidential


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Key MetricsRejected/Returned Parts per Million (PPM)

Rejected/Returned Parts per Million (PPM)

Definition The number of customer rejected/returned parts per million expressed as a ratio to the total parts shipped.

Intent Use to indicate the level of product dissatisfaction, leading to focused problem resolution.

Formula

RRPPM = Quantity of Rejected or Returned Parts x 1,000,000

Pieces Shipped

Application/Information • Each operating unit should contact their respective Customer Satisfaction Task Team

Member (Director) if they have any questions regarding the current PPM accounting method.

• Rejected/Returned PPM databases should be able to sort by plant, product and customer. • The following are the Delphi Rejected/Returned PPM calculation rules:

If a customer provides PPM numbers, the customer’s PPM numbers must be reported even if there is not agreement with the numbers. Customer numbers must be used until they are changed in the customer’s database. All customer changes (including retroactive changes) must be reported.

−

−

−

−

− −

If the customer does not provide PPM numbers, internal calculations must use the calculation method requested by the customer. If no customer calculation method is specified, use the calculation method defined by the formula above. Count only shipped part numbers, not all produced part numbers. Product used in another product or assembly within the walls of the same plant should not be counted. Only product shipped to a customer is counted. Beginning Jan. 1998, products shipped to any Delphi plant or affiliate outside the manufacturing location cannot be counted. Include all ≥50% owned joint ventures (equal or majority ownership). Include only automotive applications (OEM, Aftermarket, even if Delphi is tier II, III, etc.).

Measurement Point • Rejected/Returned PPM is measured at the plant level by product and customer. • Pant report data is aggregated to create Divisional and Corporate reports. • It is also appropriate to measure R/RPPM at the value stream level within a plant.


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Key MetricsRejected/Returned Parts per Million (PPM)

Frequency of Measurement • Rejected/Returned PPM is measured daily and reported on a monthly basis by product and

customer.


DelphiRejected/Returned Parts per Million

DelphiRejected/Returned Parts per Million

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Key MetricsSupplier Parts per Million (PPM)

Supplier Parts per Million (Supplier PPM)

Definition The number of non-conforming supplier parts per million expressed as a ratio to the total parts received.

Intent Use to indicate the level of product dissatisfaction, leading to focused problem resolution.

Formula

Supplier PPM = Quantity of Non-Conforming Supplier Parts x 1,000,000

Pieces Received

Application/Information • Each operating unit should contact their respective Global Supplier Management contact if

they have any questions regarding the current PPM accounting method.

Measurement Point • Supplier PPM is measured at the plant level by product and supplier. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement • Supplier PPM is measured daily and reported to the supplier monthly.


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Key MetricsSupplier Parts per Million (PPM)


DelphiSupplier Parts per Million

DelphiSupplier Parts per Million

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Key MetricsCustomer Disruptions (Spills and Downtime)

Customer Disruptions (Spills and Downtime)

Definition The number of non-conforming product related plant interruptions per year. A Customer Disruption (Spill) is a major special cause interruption of a customer’s process, resulting from a product quality issue, that requires the customer plant to stop shipment, production or scheduling of its products or requires the correction of products already built. This common definition is to be used for all customers, even if they do not normally count or refer to Customer Disruptions (Spills). If a product quality issue does not meet the above definition, but the customer calls it a disruption (spill), it is to be treated and recorded as a disruption (spill). A Customer Disruption (Downtime) is a major special cause interruption of a customer’s process, resulting from a product delivery issue, that results in a downtime of 5 minutes or greater experienced on the main line of the customer plant. Top customer management must be involved and designate the downtime as a Customer Disruption. Top management may include the manufacturing manager, plant manager, quality director, production control director, material director, etc.

Intent Use as a measure to indicate the number of plant incidences of product dissatisfaction, leading to focused problem resolution.

Formula

Spills = Number of non-conforming product related plant interruptions Downtime = Number of product delivery related plant interruptions

Application/Information Each operating unit should contact their respective Customer Satisfaction Task Team Member (Director) if they have any question regarding the Spill accounting method.

Measurement Point • Spills are measured at the plant level. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement • Spills are measured daily and reported monthly to monitor any customer interruptions and

lead focused problem resolution. −


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Key MetricsCustomer Disruptions (Spills and Downtime)


DelphiCustomer Disruptions (Spills)

DelphiCustomer Disruptions (Spills)

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DelphiCustomer Disruptions (Downtime)

DelphiCustomer Disruptions (Downtime)

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Downtime

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Key MetricsWorldwide Formal Customer Complaints (WFCCs)

Worldwide Formal Customer Complaints (WFCCs)

Definition The number of formal (written or electronically documented) customer complaints received worldwide from all customers.

Intent Use as a measure to indicate the number of plant incidences of customer dissatisfaction, leading to focused problem resolution.

Formula

WFCC = Number of Worldwide Formal Customer Complaints received

Application/Information • Metric is tracked and reported monthly. • Each operating unit should contact their respective Customer Satisfaction Task Team

Member (Director) if they have any question regarding the current WFCC accounting method.

Measurement Point • WFCC’s are measured at the plant level. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement WFCC’s are measured daily and reported on a monthly basis.


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Key MetricsWorldwide Formal Customer Complaints (WFCCs)


DelphiWorldwide Formal Customer Complaints

DelphiWorldwide Formal Customer Complaints (WFCC's)

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Key MetricsFirst Time Quality (PPM)

First Time Quality (PPM)

Definition First Time Quality (FTQ) is the measure of the number of pieces rejected in a manufacturing process versus the total number of pieces attempted.

Intent The goal of tracking First Time Quality is to drive Quality Improvement. Prioritization and improvement of the metric should help drive Quality Improvement at the source and ultimately improve outgoing quality.

Formula First Time Quality (FTQ) at the operator level (line, cell, major stand alone process or fabrication process) is defined as:

FTQ = Number of Pieces Rejected (scrap + rework) x 1,000,000

Number of Pieces Attempted (good pieces + rejected pieces)

Application/Information • First Time Quality is reported in parts per million (PPM). • Calculation of First Time Quality should be owned and tracked by the manufacturing floor

work teams or their Supervisor. First Time Quality is best tracked and improved by the work group that owns the process.

• Refer to Delphi Corporate Procedure 4.7-1 for additional information relating to FTQ calculation.

Measurement Point • At a minimum, FTQ is measured at each cell, line, major stand-alone process and

fabrication area within the plant using the Corporate FTQ Tracker. Further FTQ measurement points may be identified through the Process Failure Modes and Effects Analysis and the support of the Manufacturing Engineering organization.

• FTQ Performance to Goal is measured at the plant level using a comparison of the number of processes that should track FTQ versus those who track FTQ and meet their goal and those that track FTQ but do not meet their goal.

• Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement • First Time Quality is measured daily at the cell, line, major stand-alone process or

fabrication area and summarized monthly to drive quality improvement. • FTQ Performance to Goal is measured monthly at the plant level.


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Key MetricsFirst Time Quality (PPM)

Example of Reporting Formats For more information on the use of the FTQ Tracker, refer to Quality Control. At a cell, line, major stand-alone process, fabrication process or individual piece of equipment:

DelphiFirst Time Quality: Cell/Process FTQ Tracker

At the corporate, a divisional, site, plant, value stream or department level:

DelphiFirst Time Quality: Plant Performance

DelphiFirst Time Quality: Plant Performance

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Key MetricsOperational Effectiveness (%)

Operational Effectiveness (OE) (%)

Definition The actual production of good parts from a machine or process stated as a percentage of its designed capacity.

Intent Operational Effectiveness is the metric used to measure the level of Operational Availability of an area.

Formula

OE % = Good Pieces Produced (pieces) x Actual Takt Time (sec/piece) x 100 (Available Time – Contractual Time) (sec)

Term Definitions • Good Pieces Produced is the number of “good” pieces produced. • Actual Takt Time, also known as Design Cycle Time, is the cycle time(s) that a

manufacturing system runs at in the production environment. There is a specific Actual Takt Time associated with each specific staffing plan a manufacturing system runs. As Actual Takt Time changes, the OE% needs to be updated.

• Available Run Time is the amount of time that manpower is scheduled for the area. For instance, if an area is scheduled to run two 8-hour shifts, the Available Time that day is 480 minutes * 2 shifts = 960 minutes * 60 sec/min = 57,600 seconds. Note for areas that have overlapping shifts, do not double count the overlapping period.

• Contractual Time is the amount of management agreed upon time when production work stops for such items as breaks and lunch. If the area runs through breaks and/or lunch (i.e., the area runs tag relief or is able to run unmanned), this time is not subtracted from Available Time. Note that scheduled maintenance time and changeover time are not subtracted from Available Time.

Application/Information • Calculation of Operational Effectiveness should be owned and tracked by the manufacturing

floor work teams or their Supervisor. Operational Effectiveness is best tracked and improved by the work group that owns the process.


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Examples

Example 1: Calculation for a single machine. We are measuring the Operational Effectiveness of a machine that operates at 15 seconds per piece (.25 minutes per piece). For an individual machine, the machine’s cycle time is it’s Actual Takt Time. There are 1500 pieces produced in an 8-hour or 480 minute shift. There are 46 minutes of contractual breaks. The calculation is as follows:

OE % = 1500 pieces x .25 minutes/piece x 100 = 86.4% 434 minutes

Example 2: Calculation for a coupled line. We are measuring the Operational Effectiveness of a coupled line that has 6 machines in series as shown in the picture below. Cycle times are listed below the machine description. The slowest operation is the “Fine Pitch” machine. Cycle time for Fine Pitch is 15 seconds per piece or 4 pieces per minute. For a coupled line, the machine with the slowest cycle time establishes the line’s Acutal Takt Time. For calculation purposes, assume 1500 pieces produced in one 8-hour shift with 46 minutes of contractual break time removed. The calculation is as follows:

Labeler7 Second

Cycle

Printer10 Second

Cycle

Placement12 Second

Cycle

Fine Pitch15 Second

Cycle

IR Oven10 Second

Cycle

X-Ray11 Second

Cycle


The cycle time of this line is restricted to the slowest (Fine Pitch) machine. This line cannot produce product any faster than the slowest machine. By knowing which machine is the bottleneck and using that cycle time in the formula, the OE% of the entire line is quickly calculated. This also points out why it is important to know the cycle times of the machine or operator paced process. If the cycle time of another piece of equipment changes, it may become the bottleneck. Cycle times can and do change in the production environment. Sometimes the machine degrades and cannot produce at the rate at which it was designed to produce. Other times, a change is made to the set up of the machine that causes a change to the cycle time. The machine set up may be altered to accommodate a different product or it may be altered during diagnosis of a fault. However the cycle time changes, it has an impact on the productivity of the machine or process.


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Example 3: Calculation for an operator paced operation. We are measuring the Operational Effectiveness of a process that is paced by the amount of time it takes for an operator or operators to complete the product cycle. In this case, the operator or operators must be capable of producing a good quality product at that rate for the entire time the process is scheduled to run. For this example, assume that the machine cycle times are all 15 seconds but it takes one operator 60 seconds to complete one part. The operator’s cycle time is 60 seconds. In a system where the operator sets the pace of the line, it is the operator’s cycle time that is the line’s Actual Takt Time. For calculation purposes, assume 350 pieces produced in one 8-hour or 480 shift with 46 minutes of contractual break time removed. The calculation is as follows:

OE % = 350 pieces x 1 minute/piece x 100 = 80.6% 434 minutes

Now assume 3 more operators are added to this cell to increase output, and they are each capable of working at a 15 seconds cycle time (or .25 minute cycle time). If 1450 products are now produced over the same 8-hour shift, the calculation is as follows:


Example 4: Molding machine We are measuring the Operational Effectiveness of a 12 cavity molding machine with the capability of producing one complete cycle every 36 seconds. The machine cycle time per piece is 3 seconds (.05 minutes). Recall, the cycle time of an individual machine is it’s Actual Takt Time. A total of 7000 products are produced over an 8-hour (480 minute shift), with no contractual time because of tag relief for breaks. The calculation is as follows:



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Example 5: Multiple products on the same line or process We are measuring the Operational Effectiveness of a multi-product line. If multiple products are running on the same line, there may be different cycle times due to product size, technology or other reasons. It is easy to use the same formula to calculate multiple products running on the same machine or process. The formula is as follows:

OE% = (Pieces Produced Product 1 x Actual Takt Time) + (Pieces Produced Product 2 x Actual Takt Time) x 100 Available Time – Contractual Time

For example, in an 8-hour shift (46 minutes contractual time), 400 pieces of product 1 are produced at a rate of .25 minutes per piece, 800 pieces of product 2 are produced at a rate of .2 minutes per piece and 350 pieces of product 3 are produced at a rate of 4 minutes per piece.

OE % = (400 pc x .25 min/pc) + (800 pc x .2 min/pc) + (350 pc x .4 min/pc) x 100

434 minutes OE % = 92.2%

Measurement Point • At a minimum, OE is measured at each cell, line, major stand-alone process and fabrication

area within the plant using the Corporate OE Tracker. Further OE measurement points, at individual machines, constraint machines, etc. may be identified at the plant’s discretion.

• OE Performance to Goal is measured at the plant level using a comparison of the number of processes that should track OE versus those who track OE and meet their goal and those that track OE but do not meet their goal.

• Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement • Operational Effectiveness is measured daily at the cell, line, major stand-alone process and

fabrication area and summarized monthly to drive performance improvement. • OE Performance to Goal is measured monthly at the plant level.


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Example Reporting Formats For more information on the use of the OE Tracker, refer to Operational Availability. At a cell, line, major stand-alone process, fabrication process or individual piece of equipment: Example 1: OE Tracker used to monitor performance

DelphiOperational Effectiveness: Cell/Process OE Tracker

Example 2: Alternate Format - OE Tracker used to monitor performance and Volume Achievement

DelphiOperational Effectiveness: Cell/Process OE Tracker plus Volume


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At the corporate, a divisional, site, plant, value stream or department level:

DelphiOperational Effectiveness: Plant Performance

DelphiOperational Effectiveness: Plant Performance

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Key MetricsShip Window Compliance (IPM)

Ship Window Compliance (IPM)

Definition The number of non-compliant (correct quantity and time) shipments divided by the total number of shipments sent in a given time frame. A customer shipment that does not have all the correct items in the exact quantity, shipped at the time specified, is considered non-compliant.

Intent Use as a measure of customer dissatisfaction. Currently, capability to measure at the ship window level of detail is not available across all Delphi. Implementation of SAP will enable a Delphi-wide common process. All divisions currently comply with QS9000 requirements.

Formula

Ship Window Compliance (IPM) = (Number of Non-Compliant Shipments) x 1,000,000

Total Shipments

Application/Information • This Metric is captured for a given time period. • There is generally a positive correlation between Ship Window Compliance and Premium

Freight. • If the ship window is daily with multiple shipments per day, the Total Shipments should be

calculated as 1. If the window total did not meet the requirements then the Non-Compliant Shipments is 1.

Example: Calculation for multiple shipments within a window Five trucks per day to a specific customer are scheduled. The customer allows for quantity flexibility within the five trucks. The total requirement for the day is 10,000 pieces. The supplying plant was able to send only 9,500 of the required pieces. The Missed Shipments for this day should be calculated as follows:

Ship Window Compliance (IPM) = (Number of Non-Compliant Shipments) x 1,000,000

Total Shipments

Ship Window Compliance (IPM) = 1 x 1,000,000 = 1,000,000 IPM 1


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Key MetricsShip Window Compliance (IPM)

Measurement Point • Ship Window Compliance is measured at the plant level. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement Ship Window Compliance is measured daily and reported monthly to monitor any customer dissatisfaction.


DelphiShip Window Compliance

DelphiShip Window Compliance (IPM)

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Key MetricsSchedule Attainment %

Schedule Attainment %

Definition A measure of operation’s ability to develop and execute a production plan.

Intent Use to measure PC&L’s ability to create an effective production schedule and manufacturing's ability to operate to that schedule.

Formula

Schedule Attainment % = 1 - Production Plan – Actual Build 100 Production Plan [ x ]

Application/Information • The calculation uses the absolute value of the difference between what was scheduled or

planned to be produced and what was actually produced. It does allow underbuilds to be built without penalty using a Rolling Plan. However, any production beyond the underbuilds is penalized.


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Example: Calculation for a Mixed Model Line

Manufacturing Performance to Plan Measurement (penalty for overproduction)

Part 1 Mon Tue Wed Thu Fri Sat Sun Wk Total

Plan 1000 1000 1000 1000 1000 5000 Rolling plan 1000 1050 950 1050 1050 0 0

Actual 950 1100 900 1000 1050 0 0 5000 Variance 50 0 0 0

Variance % 100.0% avg of daily

Part 2 Mon Tue Wed Thu Fri Sat Sun Wk Total Plan 1000 1000 1000 1000 1000 5000

Rolling plan 1000 950 850 850 650 -500 -500 Actual 1050 1100 1000 1200 1150 0 0 5500

Variance 50 150 150 350 500 500 500 Variance % avg of daily

Part 3 Mon Tue Wed Thu Fri Sat Sun Wk Total Plan 1000 1000 1000 1000 1000 5000

Rolling plan 1000 1200 1350 1560 1610 710 -40 Actual 800 850 790 950 900 750 0 5040

Variance 40 40 Variance % avg of daily

Total Mon Tue Wed Thu Fri Sat Sun Wk Total Plan 3000 3000 3000 3000 3000 0 0 15000

Rolling plan 3000 3200 3150 3460 3310 210 -540 Actual 2800 3050 2690 3150 3100 750 0 15540

Variance -200 -150 -460 -310 -210 540 540 Variance % avg of daily

-50 -50 -5095.0% 95.2% 94.7% 95.2% 96.0%

95.0% 84.2% 82.4% 58.8% 23.1% 68.7%

-200 -350 -560 -610 -71080.0% 70.8% 58.5% 60.9% 55.9% 65.2%

90.0% 83.4% 78.5% 71.7% 59.7% 76.7%

Actual plan remains fixed … the rolling plan reflects what they really need to build (includes carry over from previous day)

• Part 1 reflects underbuilds for Monday, Wednesday, and Thursday, overbuilds for Tuesday

and 100% compliance for Friday. Note that the over or underbuilds roll into the following day in the form of a “Rolling Plan.” Also, note that the Wk (Weekly) Total reflects a simple average of the daily performance.

• Part 2 reflects overbuilds for each day of the week. Note the cumulative effect of the overproduction in the Rolling Plan and the daily performance calculation.

• Part 3 reflects underbuilds for each day of the week. Note the cumulative effect of the underproduction in the Rolling Plan and the daily performance calculation.

• The Weekly Average is determined by averaging the daily averages. Note that Saturday and Sunday were not included in the calculation as there was no production planned. (Refer to the example above.)


17 - 24


Measurement Point • Schedule Attainment is measured at each PC&L scheduling point. • Scheduling point data is aggregated to create a plant report. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement Schedule Attainment is calculated daily and reported as a weekly percent. Weekly trend charting is tracked to monitor performance.


DelphiSchedule Attainment

DelphiSchedule Attainment

0%10%20%30%40%50%60%70%80%90%

100%

99 C

Y To

tal

00 C

Y To

tal

01 C

Y To

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02 C

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TDW

K 1

WK

2W

K 3

WK

4W

K 5

WK

6W

K 7

WK

8

ScheduleAttainment

Goal


17 - 25

Key MetricsInventory Turns

Inventory Turns

Definition The number of times that inventory is turned over on an annual basis. This includes the entire value chain.

Suppliers CustomerSupplied in lineSequence /Modular Asm.

DistributionCenters /Warehouses

RawStock

Work inProcess

Finished Goods

Indirect Material

Intent Use as a process measure to reduce inventory carrying costs, improve manufacturing flow and quality, reduce waste and increase Delphi’s Return on Net Assets.

Formula

Inventory Turns = YTD Cost of Goods Sold (Annualized)

YTD (Monthly) Average Beginning Inventory

Term Definition Inventory is defined as any material owned by the Division to facilitate production or to meet customer requirements regardless of physical location.

Application/Information • Include all Delphi owned inventory along the entire value chain located at an outside

concern (raw stock), distribution center or sequencing activity (finished goods), modular assembly location (raw stock or work in process) and in the plant (raw stock, work in process, finished goods or non-productive material).

• Overall Delphi Inventory Turns are calculated using a weighted average based on Divisional Sales.


17 - 26

Key MetricsInventory Turns

Measurement Point • Inventory Turns is measured at the plant level. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement Inventory Turns are calculated and reported monthly.


DelphiInventory Turns

DelphiInventory Turns

02468

101214161820

99 C

Y To

tal

00 C

Y To

tal

01 C

Y To

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02 C

Y To

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03 C

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04 Y

TD JAN

FEB

MAR

APR

MAY JU

NJU

LYAU

GSE

PO

CT

NO

VD

ECTurns

Improvement Goal


17 - 27

Key MetricsManufacturing Expense Improvement (% Year over Year)

Manufacturing Expense Improvement (% Year over Year)

Definition Manufacturing Expense Improvement (% Year Over Year) is a measure of the organization’s ability to control and improve the internal costs associated with the production of a product for our customer.

Intent Use Manufacturing Expense Improvement (% Year Over Year) to assess the financial performance of the manufacturing processes and systems that are in place within a plant. The financial results are measured and reviewed on a monthly basis with comparisons by month, quarter and calendar year.

Formula

Manufacturing Expense Improvement = Current Year-to-Date Gross Manufacturing Performance $ * 100%

(% Year over Year) Prior Year-to-Date Actual Manufacturing Expense (adjusted for current year Volume & Mix and Foreign Exchange)

Term Definitions • Gross Manufacturing Performance Dollars is the Actual vs. Prior Year Manufacturing

Expense variance less any favorable (unfavorable) adjustments for Volume & Mix and Foreign Exchange.

• Manufacturing Expense includes all direct and indirect in-plant expenses associated with the production of a product for our customer. Within the financial process, these costs are classified as 7000 General Ledger control account expenses and include such items as: direct, indirect, skilled trades and salary labor, hourly and salary fringe benefit costs, supplies, expense tools, utilities, maintenance material (including inbound freight costs), scrap, building and equipment depreciation, outside contract services, project expense, and other sundry expenses. The above-mentioned expenses are incurred by the plant’s management during the execution phase of the plant’s manufacturing processes. Manufacturing expense does not include such items as direct or productive material costs (including inbound freight costs), tooling amortization, excess employee costs (i.e. temporary layoff expense, JOBS cost) or cost of sales adjustments.


17 - 28

Key MetricsManufacturing Expense Improvement (% Year over Year)

Measurement Point • Manufacturing Expense Improvement (% Year over Year) is measured at the plant level. • Plant report data is aggregated to create Divisional and Corporate reports. • It is also appropriate to measure Manufacturing Expense Improvement (% Year over Year)

at the value stream level within a plant. Frequency of Measurement • Manufacturing Expense Improvement (% Year over Year) is measured on a monthly basis.


DelphiManufacturing Expense Improvement

DelphiManufacturing Expense Improvement (% Year over Year)

-8%-6%-4%-2%0%2%4%6%8%

10%12%

99 Y

OY

Tota

l00

YO

Y To

tal

01 Y

OY

Tota

l02

YO

Y To

tal

03 Y

OY

Tota

l04

YTD JA

NFE

BM

ARQ

1 YO

YAP

RM

AY JUN

Q2

YOY

JULY

AUG

SEP

Q3

YOY

OC

TN

OV

DEC

Q4

YOY

%Improvement

ImprovementGoal


17 - 29

Key MetricsManufacturing Expense as a Percent (%) of Sales

Manufacturing Expense as a Percent (%) of Sales

Definition A measure of the relationship between Manufacturing Expense and Net Sales (i.e., gross sales less any customer returns). Within the financial process, net sales are collected in the 8000 General Ledger control accounts split between gross sales and customer returns.

Intent Use Manufacturing Expense as a percentage (%) of Sales to assess the financial performance of the manufacturing processes and systems that are in place within a plant given the expected annual budget improvement, the performance to prior year and the plant’s status relative to its competition. The financial results are measured and reviewed on a monthly basis with comparisons by month, quarter and calendar year versus prior year, forecast, and budget.

Formula

Mfg. Expense % of Sales = Manufacturing Expense x 100

Net Sales (Gross Sales-Customer Returns)

Term Definitions • Manufacturing Expense includes all direct and indirect in-plant expenses associated with

the production of a product for our customer. Within the financial process, these costs are classified as 7000 General Ledger control account expenses and include such items as: direct, indirect, skilled trades and salary labor, hourly and salary fringe benefit costs, supplies, expense tools, utilities, maintenance material (including inbound freight costs), scrap, building and equipment depreciation, outside contract services, project expense, and other sundry expenses. The above-mentioned expenses are incurred by the plant’s management during the execution phase of the plant’s manufacturing processes. Manufacturing expense does not include such items as direct or productive material costs (including inbound freight costs), tooling amortization, excess employee costs (i.e. temporary layoff expense, JOBS cost) or cost of sales adjustments.

Application/Information • Very stringent metric used to stretch the Manufacturing Organization, in good or bad times,

to reduce costs, whether fixed or variable.

Measurement Point • Manufacturing Expense as a Percent (%) of Sales is measured at the plant level. • Plant report data is aggregated to create Divisional and Corporate reports. • It is also appropriate to measure Manufacturing Expense at the value stream level within a

plant.


17 - 30

Key MetricsManufacturing Expense as a Percent (%) of Sales

Frequency of Measurement • Manufacturing Expense as a Percent (%) of Sales is measured on a monthly basis. Example Reporting Format

DelphiManufacturing Expense as a Percent of Sales

DelphiManufacturing Expense as a Percent of Sales

0%5%

10%15%20%25%30%35%40%

99 C

Y To

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00 C

Y To

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01 C

Y To

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02 C

Y To

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03 C

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TD JAN

FEB

MAR Q

1AP

RM

AY JUN

Q2

JULY

AUG

SEP Q3

OC

TN

OV

DEC Q

4

Mfg. Exp. as a %of Sales

Improvement Goal


17 - 31

Key MetricsPremium Freight Expense ($)

Premium Freight Expense ($)

Definition The cost of shipments sent other than normal transportation mode, whether outbound to a customer or inbound from a supplier (Delphi responsible, Delphi expense).

Intent Use as a measure of customer dissatisfaction. Any incidents of premium freight may lead to additional work for the customer, risk of interruption and/or additional freight expense.

Formula

Premium Freight Expense $ = Cost of non-normal transportation mode shipments arising due

to Delphi or Supplier issues

Application/Information • Many of Delphi’s Customers track premium freight, usually on a weekly basis. • When unfavorable performance or trends are recognized, root causes are identified and

corrective actions implemented.

Measurement Point • Premium Freight Expense is measured at the plant level. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement • Premium Freight Expense is calculated daily or weekly and reported monthly.


17 - 32

Key MetricsPremium Freight Expense ($)


DelphiPremium Freight Expense

DelphiPremium Freight Expense

0.00.20.40.60.81.01.21.41.61.82.0

99 C

Y To

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00 C

Y To

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01 C

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MAR Q

1AP

RM

AY JUN Q2

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AUG Q3

SEP

OC

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DEC Q

4

mill

ions

of d

olla

rs

Premium FreightExpense

Improvement Goal


17 - 33

Key MetricsScrap Expense ($)

Scrap Expense ($)

Definition Scrap expense is non-conforming material and processing labor and burden expense accumulated in the 7000 sub account within Manufacturing Expense. If manufacturing processes are not making parts and assemblies to specification, those non-conforming parts are classified as Scrap.

Intent Use as a measure to determine: • Non-conforming direct material expense. • In-process labor expense. • If processes are making parts and assemblies to specification.

Formula

Scrap Expense $ = Scrap Material $ + In-Process Labor and Burden $

Term Definitions • Scrap Material Dollars is the dollar value of the material invested while producing scrap. • In-Process Labor and Burden Dollars is the dollar value of the amount of labor and

burden invested while manufacturing the scrap.

Application/Information • The scrap calculation derives its numbers directly from the operating unit’s financial

systems, which in most cases separates scrap material expense from labor and burden expense. If an operating unit’s financial system does not separate scrap material expense from labor and burden expense, the operating unit should contact their divisional representative for guidance.

Measurement Point • Scrap Expense is measured at the department and plant level. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement • Scrap Expense is measured and reported monthly.


17 - 34

Key MetricsScrap Expense ($)


DelphiScrap Expense

DelphiScrap Expense

00.20.40.60.8

11.21.41.6

99 C

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00 C

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01 C

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Q2

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SEP Q3

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DEC Q

4

Mill

ions

of D

olla

rs Scrap Expense

Improvement Goal


17 - 35

Key MetricsOvertime (% of Straight Time)

Overtime (% of Straight Time)

Definition Percentage of overtime hours worked compared to straight time hours worked.

Intent Use to gage the amount of overtime worked to deliver product and maintain operations.

Formula

Overtime % = Overtime Hours Worked Straight Time Hours Worked

Term Definitions • Overtime Hours Worked is the amount of hours worked by employees for which overtime

premium was paid. • Straight Time Hours Worked is the amount of hours worked by employees during normal

and regularly scheduled shift hours. • Include all hourly classifications, direct, skilled and indirect hourly hours. Only include the

overtime hours worked that were paid. • Do not include premium hours paid that were not worked. • Do not include salaried overtime.

Application/Information • The corporation, to maintain consistency in reporting from all operations, has defined the

formula for this calculation. • An excessive percentage can be indicative of many factors such as high absenteeism,

employee shortages, equipment downtime and excessive model changeover time.

Measurement Point • Overtime % is measured at the department and plant level. • Pant report data is aggregated to create Divisional and Corporate reports.

Frequency of Measurement • Overtime % is measured on a daily basis in-plant and reported externally monthly.


17 - 36

Key MetricsOvertime (% of Straight Time)

Example of Reporting Format

DelphiOvertime

DelphiOvertime (% of Straight Time)

0%2%

4%6%

8%10%12%

14%

99 C

Y To

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00 C

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01 C

Y To

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02 C

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FEB

MAR AP

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AY JUN

JULY

AUG

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TN

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Overtime

Improvement Goal


17 - 37

Key MetricsProductivity (Pieces per Person per Hour-PPH)

Productivity (Pieces per Person per Hour – PPH)

Definition A measure of the amount of labor required to produce a part.

Intent Use to measure overall labor productivity.

Formula

Productivity = Number of Good Pieces Produced Hours Worked

Term Definitions • Number of Good Pieces Produced is a count of only good pieces. If this number is not

available, the number of pieces shipped is used as an alternative. • Hours Worked is the sum of the direct and indirect labor hours, including skilled trades, for

the area being measured.

Application/Information • At the local or process level, plant management may elect not to include indirect or skilled

labor in this calculation. Regardless of choice, the measurement method must be applied consistently once established.

• At the plant level, all direct and indirect and skilled employees assigned to a plant must be included in this calculation.

• At the plant level, financial systems capture the cumulative plant Hours Worked and Number of Good Pieces Produced necessary to calculate Plant Productivity. Plant Productivity reflects the plant performance regardless of the combination of high or low labor and high or low volume processes.

Measurement Point • Productivity is measured at the cell/process level and at the plant level. • Productivity can also be measured at the department or value stream level.

Frequency of Measurement • Productivity is measured on a daily basis and reported monthly at the cell level. • Productivity is measured monthly at the department or plant level. • Pant report data is aggregated quarterly to create Corporate reports.


17 - 38

Key MetricsProductivity (Pieces per Person per Hour-PPH)

Example Reporting Format At a cell or line:

DelphiProductivity: Cell/Process

At a department or plant level:

DelphiProductivity: Department or Plant

DelphiProductivity

0123456789

10

99 C

Y To

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01 C

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JULY

AUG

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TN

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DEC

Piec

es p

er P

erso

n pe

r Hou

r

Productivy (pph)

Improvement Goal


17 - 39

Key MetricsTotal Product Cycle Time Improvement %

Total Product Cycle Time Improvement %

Definition Total Product Cycle Time (TPc/t) is a measure of flow. It represents the longest lead time path from raw materials to shipping finished goods. The longest lead time or critical path is the quickest possible response to a customer order with a finished product. TPc/t Improvement (Dock to Dock) % is the year-to-date percent improvement in the baseline Dock to Dock TPc/t. Use an established baseline throughout the year to calculate improvement. Do not include non-scheduled hours, weekends or holidays. Include the highest cost incoming material in hours. Include all WIP, rework, repair and finish goods in hours.

Intent Use to focus on the elimination of non-value added operations and the reduction of process inventory. Also use to minimize the time it takes to cycle a part from raw material to finished goods (lead-time). TPc/t can be effectively estimated by determining the total amount of a product along its critical path (longest lead-time) and dividing that amount by the rate of consumption (customer demand) of that product.

Term Definitions • Value Stream: Represents the manufacturing operations that are required from raw to

finished product for a salable item. (Refer to Value Stream and Connection Mapping for further definition.)

• Feeder Process: Each manufacturing flow path that contributes to the final product build. • Daily Requirements: The daily customer requirements expected to come from each feeder

process. • Raw Inventory: Material that is waiting to enter the feeder process (in pieces). • In-Process Inventory: Material that is in the feeder process (pieces before, within, or after

manufacturing operations). • Finished Inventory: Material that has finished the feeder process awaiting assembly (for

components) or shipment (for assembly). • Total Inventory: The total pieces in raw, in process, and finished state for a feeder process. • Inventory Days: For each feeder process, the total inventory divided by the daily

requirements. • Inventory Days Rank: Based on the inventory days calculation, this identifies the highest

value as 1, the next highest as 2, etc. • Baseline TPc/t: Is the total product cycle time of the value stream.


17 - 40


Formula

TPc/t Improvement % = Baseline TPc/t (hours) - Current TPc/t (hours) x 100 Base TPc/t (hours)

Two methods for calculating TPc/t are outlined in this manual:

• Method One is best used in situations where the critical path is known or readily identifiable.

• Method Two is best in situations where the critical path is not known or readily identifiable.

TPc/t Calculation Method One This approach utilizes a completed value stream map as a reference document. (Refer to Value Stream and Connection Mapping).

Step 1: Draw a time line across the bottom of the VSM segmented to represent each inventory

and processing point along the critical path of the product. Typically, a raised area along the line represents the inventory points. Divide the inventory quantities at each inventory point by the daily demand for the product to determine inventory days. Divide the work in process (WIP) quantities at each processing point by the daily demand for the product to determine inventory days. The WIP quantities should reflect all inventories not captured in the inventory point quantities.

Takt = 21.7 sec.C/T = 19.2 sec.# Shifts = 2 WIP = 30 pcs.U/T = 92% FTQ = 99% C/O Time = 5 min.Lot Size = 500 pcs

Takt = 21.7 sec.C/T = 18.5sec.# Shifts = 2 WIP = 200 pcs.U/T = 90% FTQ = 98% C/O Time = n/aLot Size = 250 pcs

Sub assemble Assemble Shipping

I II = 3 = 3 = 11000 pcs. 500 pcs. 750 pcs.

Demand = 500/day

2 days 1 day 1.5 days.06 days .4 days

Inventory TimeProcessing Time


17 - 41


Step 2: Total the times represented by the inventory and processing points along the critical path to determine TPc/t.

Demand = 500/day

Takt = 21.7 sec.C/T = 19.2 sec.# Shifts = 2 WIP = 30 pcs.U/T = 92% FTQ = 99% C/O Time = 5 min.Lot Size = 500 pcs

Takt = 21.7 sec.C/T = 18.5sec.# Shifts = 2 WIP = 200 pcs.U/T = 90% FTQ = 98% C/O Time = n/aLot Size = 250 pcs

Sub assemble Assemble Shipping

I II = 3 = 3 = 11000 pcs. 500 pcs. 750 pcs.

2 days 1 day 1.5 days.06 days .4 days

Inventory TimeProcessing Time TPc/t = 4.96 days

TPc/t Calculation Method Two Step 1: Identify all product line(s) for the plant, and select value stream(s). Step 2: Construct a Product Synchronization diagram for each value stream. Construct a Product Synchronization Diagram For Each Value Stream

Widget Value Stream

Dock

FinishedGoods

Raw

Process 1

Process 2 RawPart

Subasm Cell

PART F

Raw

Process 1

Process 2

Process 3

Process 4

PART A

Bar Stock

Process 1

Process 2

Process 3

Raw

Process 1

Process 2

Process 3

Process 4

Raw

Process 1

Process 2

Process 3 Subassy

PART K

Purch Part

Subassy

PART N

Process 1

Process 2

Process 3

Process 4

Process 5

Process 6

Process 7

Process 8

Process 9

Process 10

PART B

Raw

Process 1

PART D

PART CPART GPART J

RawPurchased

BULKPURCHASED

PARTS

RawPurchased

Process 1

Raw

Subassy

Process 1

Raw

Process 2

Process 1

RawPART EPART IPART L PART H

PART M

Kitting Cell

HANDCARRIABLEPURCHASED

PARTS

Widget Assembly


17 - 42


Step 3: Calculate an Inventory Days value for each component and then rank them.

Value Stream: Widget - Feeder Process Inventory DaysDate: 29MY97

Inventory- Avg. Pieces

Feeder ProcessDaily Reqs. Raw In-Process Finished

TOTAL Inventory

Inv. Days

Inv. Days Rank

Widget Assembly 1200 0 60 2000 2060 1.72Part A 2400 7200 28108 6000 41308 17.21 1Part B 24400 70000 166000 24000 260000 10.66 2Part C 13750 41250 0 60000 101250 7.36 3Part D 12600 66000 12000 14000 92000 7.30 4Part E 6400 18000 0 27840 45840 7.16 5Part F 2900 13000 300 2000 15300 5.28 6Part G 13750 41250 0 30000 71250 5.18 7Part H 4200 12600 7000 2000 21600 5.14 8Part I 24000 72000 0 44250 116250 4.84 9Part J 13750 41250 0 25000 66250 4.82 10Part K 2100 4250 5100 672 10022 4.77 11Part L 13000 39000 0 18900 57900 4.45 12Part M 12000 30000 6000 12000 48000 4.00 13Part N 3100 3000 400 2000 5400 1.74 14

Key:Value Stream: The mfg. operations that are used from raw to finished product for a saleable item

Feeder Process: Each manufacturing flow path that contributes to the final product buildDaily Reqs: The daily customer requirements expected to come from each feeder process

Raw Inventory: Material that is waiting to enter the feeder process (in pieces)In-Process Inventory: Material that is in the feeder process (pieces before, within, or after mfg. operations

Finished Inventory: Material that has finished the feeder process awaiting assy.(for components) or shipment(for assy.)Total Inventory: The total pieces in raw, in-process, and finished states for a feeder processInventory Days: For each feeder process, this is the total inventory divided by the daily requirements

Inventory Days Rank: Based on the inventory days calculation, this identifies the highest value as 1, the next highest as 2, etc.

Note: There are instances where the same feeder process provides parts to more than one value stream,. Where this is the case, use the TOTAL Daily Reqs.(of all assys requiring the comp.) when retrieving inventory values so there is consistency in the Inv. Days calculation.

Feeder Process Inventory Days Chart

Step 4: Calculate the

Total Product Cycle Time, utilizing the largest Inventory Days values.

Step 5: Chart the TPc/t on

the Product Synchronization diagram.

Total Product Cycle Time Of The Value StreamTPc/t = 18.93 Days

17.21 (Part A) + 1.72 (Assy/F.G.)

Total Product Cycle Time for Widget Value Stream (indicated by Feeder Process Inventory Days)

Dock

FinishedGoods (1.0)

Raw

Process 1

Process 2 RawPart

Subasm Cell

PART F

Raw

Process 1

Process 2

Process 3

Process 4

Bar Stock

Process 1

Process 2

Process 3

Raw

Process 1

Process 2

Process 3

Process 4

Raw

Process 1

Process 2

Process 3 Subassy

PART K

Purch Part

Subassy

PART N

Process 1

Process 2

Process 3

Process 4

Process 5

Process 6

Process 7

Process 8

Process 9

Process 10

PART B

Raw

Process 1

PART D

PART C (7.36)PART G (5.18)PART J (4.82)

RawPurchased

BULKPURCHASED

PARTS

RawPurchased

Process 1

Raw

Subassy

Process 1

Raw

Process 2

Process 1

RawPART E (7.16)PART I (4.84)PART L (4.45) PART H

PART M

Kitting Cell

HANDCARRIABLEPURCHASED

PARTS

Widget Assembly (.72)

(5.28)

PART A

(17.21)

(4.77)

(1.74)

(10.66)

(7.30)

(5.14)(4.00)


17 - 43


Measurement Point • Total Product Cycle Time Improvement % is measured at the value stream level.

Frequency of Measurement • Total Product Cycle Time Improvement % is measured annually at a minimum.


DelphiTPc/t Improvement

DelphiTotal Product Cycle Time Improvement

0%

2%

4%

6%

8%

10%

12%

99 C

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ImprovementGoal


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Key MetricsDMS Manufacturing Fundamentals in Place (%)

DMS Manufacturing Fundamentals in Place (%)

Definition A measure of the implementation of the DMS Manufacturing Fundamentals.

Intent Use to confirm that implementation and continuous improvement are occurring. Also use to support the education and training process.

Formula

Manufacturing Fundamentals in Place % = Manufacturing Fundamentals Assessment Score

Term Definitions • Manufacturing Fundamentals Assessment is a self-assessment geared to track progress of

the implementation of the DMS Manufacturing Fundamentals. (Refer to Manufacturing Fundamentals Assessment.)

Measurement Point • Manufacturing Fundamentals in Place % is measured at the plant level.

Frequency of Measurement • Manufacturing Fundamentals in Place % is measured annually at a minimum.


17 - 45

Key MetricsDocument Revisions

Document Revisions

The following revisions have been made to the Key Metrics section. Effective Date

Page Number(s)

Revision Description

Person Responsible

02/02/2005 17-1 to 17-45 Initial release of version 4.0. Erica Hobbs-Gutberlet 04/11/2005 17-28 to 29 Updated description and formula for

Manufacturing Expense Improvement (% Year over Year)

Erica Hobbs-Gutberlet

04/11/2005 17-28 and 30 Updated definition of Manufacturing Expense to reflect exclusion of excess employee costs

Erica Hobbs-Gutberlet

04/20/2005 17-15 Updated description and formula for Operational Effectiveness (%)

Bill Willick


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17 key metrics-glass wall

Documents