Previous

Page - 7

Performance Metrics for Lean Production

Given the above definition and framework for lean production, we can measure the performance of lean techniques using the metric: Cost of buffering. This can be further broken down into the following metrics: -

1. Inventory buffering costs - related to consequences of reducing inventory levels: -
i. Level of WIP inventory
ii. Yield loss & re-work
iii. Queue lengths
iv. Quality (measured as customer rejection rate, or other suitable measures)

2. Capacity buffering costs - related to amount of excess capacity: -
i. Excess capacity at each work-station and of the system as a whole
ii. Excess workers maintained to buffer variability
iii. Additional capacity extracted from the system
iv. Production space

3. Time buffering costs - related to the rate of production: -
i. Process cycle time or takt time (and achievement against it)
ii. Set-up and changeover times
iii. Machine reliability & downtime (scheduled & unscheduled)
iv. Operator efficiency
v. Customer lead time
vi. Customer service level (measured in terms of order fill rate, proportion of total deliveries made late, or any other suitable measure)

Next

* Contributed by -
Vaishnav Tadatmya Ashok,
IIM, Lucknow.