The Importance of Metrics
Christopher Turner 
Metrics for Continuous Improvement Success
As a lean transformation consultant, one of the most critical pieces of advice I give to manufacturing companies adopting Lean and Six Sigma methodologies is to implement the right metrics and key performance indicators (KPIs) from the start. Having the proper metrics in place allows you to establish baselines, track progress, identify problems areas, and quantify improvements over time.
Without good metrics, your lean and Six Sigma efforts will be shooting in the dark without the data to guide your actions. The right metrics will help prioritize areas of focus, set realistic goals, and ensure you are making meaningful process improvements.
Here are some of the essential lean metrics I recommend manufacturing companies put in place:
Cycle Time
Cycle time measures the total time from the start of a process until it is completed for an individual unit, part or product. Reducing cycle time is a key lean objective to improve flow, increase throughput and reduce lead times. Track cycle times for key processes or product lines.
Takt Time
Takt time is the calculated maximum time allowed to produce one unit based on customer demand rate. It sets the pace for your production line. Tracking takt time versus actual cycle times highlights bottlenecks and areas for improvement.
First Pass Yield
This measures the percentage of units that successfully pass through a process the first time without needing rework or remake. First pass yield identifies quality issues and opportunities for mistake-proofing and preventative measures.
Overall Equipment Effectiveness (OEE)
OEE provides a holistic view into how effectively your equipment and manufacturing operations are performing relative to their full potential. It accounts for availability, performance and quality metrics.
Inventory Levels
One core principle of lean is reducing all forms of waste, including excess inventory. Tracking raw materials, work-in-process (WIP) and finished goods inventories over time highlights opportunities for improving flow and pull-based replenishment.
Downtime Tracking
All unplanned downtime events causing production delays or shutdowns should be carefully tracked, with root causes identified. This surfaces equipment issues, material shortages, unplanned setups/changeovers and other disruptors.
Plan vs Actual Metrics Dashboard
In addition to tracking the operational metrics above, manufacturers should implement a highly visible Plan vs Actual metrics dashboard or scorecards. These show target goals for each KPI alongside actual performance levels over time. Having plan vs actual metrics clearly displayed maintains focus on hitting targets and creates accountability.
For example, you may have a plan of 90% for first pass yield, but actual performance is only averaging 82%. The gap between plan and actual is clearly visualized to prioritize countermeasures for improving yield. Celebrating periods when actuals exceed the plan reinforces desired behaviors.
In addition to implementing tracking for key metrics, data capture processes should be as automated as possible. Assign clear ownership and accountability for each metric.
Starting any lean or Six Sigma initiatives without first having robust metrics and tracking in place is a missed opportunity. Good data is essential for better prioritizing improvement efforts, substantiating progress with facts, and achieving lasting transformational change.
Categories: Training