How to measure lean manufacturing efficiency

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    HiI have been given the responsibility for the lean manufacturing activity at a manufacturing site in Norway.I wonder. How can we best measure how good we are in running a lean production,  how can I visualize against the supervisors and operators how good they are?



    How would you define “Lean Activity”?  It implies results do not matter.  You could use number of Kaizen Events as a lean activity measure, but it does not mean you improved anything.  I would suggest you start with someting simple like inventory turns.  At a supervisor and operator level, I would look at Kanban size, overruns, shortages, and the like.


    Adam L Bowden

    If you are looking for one ultimate metric it would be the businesses “Cash flow”.
    Lean is about removing waste from the entire business (not just manufacturing) and thus the indicator of leanness is cash – the leaner you are the more “free cash” your business will have.  You will have to determine a roadmap for Lean maturity for manufacturing, transactional areas, product design and services rendered.
    Good luck



    We spoke a little over a year ago and you mentioned you were thinking of going into business.  How’s things going with that?
    Good to hear from you again on this forum.


    Adam L Bowden

    Hi Mark,
    Drop me an e-mail and I’ll let you know whats hapening.
    Best regards,
    either e-mail will work [email protected] or [email protected]



     There are a variety of metrics to help evaluate one’s Level of Leanness.  Inventory Turns is one good one that was mentioned and from a higher level Cash Flow (probably not the right metric at a cell level though) is good also, however there are others.
    Work-in-Process is another good one and it goes hand-in-hand with Inventory Turns.  The greater the WIP or the lower the Inventory Turns, the more stuff you have in your facility and the greater waste you have in your processes.
    Adherence to Takt Time in the form of Periodic Output is another good metric.  If your Takt Time is measured in seconds or minutes then the hourly output might help in rapidly determining the health of a product line.  If you cannot maintain your hourly output, then you will be challenged to meet your daily or weekly requirements without resorting to overtime.  Else you will not meet your customer’s demand rate.
    Another metric would be your value versus non-value added ration, also known as the Process Cycle Efficiency.  This would help you in understanding where the wasteful processes are.
    How about Delivery to Schedule?  Meeting your customer’s deadlines (both internal and external) is extremely important.
    First Time Yield…  How well they are at getting things right the first time?
    At the Cell Level, which is what it sounds like you are looking for, I would strongly recommend using Periodic Output, WIP Level and First Time Yield.  If you start out with a few metrics that you consistently use (vice reporting the world and ignoring most of them) then you will begin to get the buy-in necessary to sustain your gains.  Others may suggest different metrics or using more, but you can always add others as you mature. 
    The best way to start is to work with the supervisors and operators to develop the metrics.  Understand what they think they need to monitor in order to determine how healthy their cell or line is.  But evaluate each and ensure that the metrics chosen drive everyone in the right direction.  In developing these metrics, drive home the point that performing poorly in a metric isn’t a reflection on the individual but rather an indication that the process is lacking and needs to be refined (improved).  Hence, continuous process improvement.
    Hope you find this helpful.  Good luck…



    Hello Idar,
    I am working myself as a certified BB in L6S. Some my comments may seem simple to you but my experience shows it is really talking to the people.
    I suggest you measure :
    1) the process cycle efficiency (value added time divided by overall production time). You will find benchmarks according to the processes on the internet. For example, for manufacturing, 25% is world-class and 10% a classical value. It will talk to people if you are at 2%…
    2) Measure Overall equipement efficiency (OEE) for bottelneck or constraints on the production line. You will then identify that your equipment is only making good products 60% of the time (85% being world-class for automotive). Draw it on a board and challenge the teams for improvements.
    3) Do not do “Lean” for the sake of it. Identify first the process and areas that creates most value to customers (help from finance).
    4) If your factory is Lean , ideally, anyone entering your plant should understand the processes just by looking at the plant (visual management and plant layout).

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