You use visual management to communicate performance to employees
 
The performance measures used to monitor production performance should have targets set against them to help drive the business. The measures should be visual, meaningful, easily to understand, able to be influenced by the work groups being measured, and used positively to demonstrate progress towards the achievable, but stretching, targets.
Key Issues
·         Establishing appropriate performance measures is important, because you do “get what you measure”
·         The performance measures should be designed to help you achieve your strategic objectives
·         If the measures are to be used to drive and improve your business they should be :
o      easy to understand
o      under the control of the people being measured
o      targets agreed by the people being measured
o      hard to manipulate or cheat
o      displayed clearly, preferably in the work area of the people being measured. Information, not data, should be provided in numerical and graphical format with any improvements shown by lines going up
o      the information should be provided in a timely manner. If possible, updated by the people being measured.
o      precisely defined and measures consistent throughout your organisation
·         When selecting the actual measures to use in your business consider the following points:
·         The Balanced Scorecard has been used by management teams in a wide range of businesses to assist in selecting appropriate measures.
·         It is essential to measure against your managements’ profit and cash commitments to gain credibility and sustain a successful business
·         You also need, however, to measure aspects of:
1.     Customer delivery and satisfaction
2.     Internal processes. For example, Manufacturing operations key performance measures might include:
¨          Schedule adherence (actual deliveries made on time, in full to the agreed customer request dates)
¨          Cost of quality (internal costs - scrap, rectification; external costs – warranty claims, retrofits; and quality assurance costs)
¨          Stock turns (utilisation of work in progress and stores inventory)
¨          Productivity (how effective are people and / or equipment)
¨          Controllable costs (significant items of consumable expenditure that can be assigned to defined groups of people)
3.     The things you are doing to set up your business to meet future challenges.
·         One of the benefits of cellular/modular factories is that costs can be allocated and performance measures calculated for a group of people and equipment
·         Productivity can be a tricky thing to measure. It can be based on output per man-hour, machine efficiencies or a combination of these depending on the parameters of your business.
Factors for Success      
Factors to  Avoid
1.     Everyone in your company understands how they should contribute to making improvements
2.     Everyone takes a keen interest in the results and strives for improvements
3.     Continuous improvement project teams are used to address specific concerns with performance.
4.     Performance information is prominently displayed and updated in a timely manner.
1.     Data being collected only because senior directors have asked for it or because it was used in the past.
2.     Managers failing to understand and challenge results and what they mean for the business
3.     Old charts being left on notice boards
4.     Becoming data rich, information poor
 
Who does this apply to?
Senior managers, everyone in your business.
Realisable Benefits
Improved business performance with everyone understanding how to contribute

Guides:

Logistics co-ordinationLogistics co-ordination

Logistics co-ordination

Uninterrupted material flowUninterrupted material flow

Uninterrupted material flow

Responding to changes in volumes and product mixResponding to changes in volumes and product mix

Responding to changes in volumes and product mix

Make versus buyMake versus buy

Make versus buy

The supplier approval processThe supplier approval process

The supplier approval process

Monitoring supplier performanceMonitoring supplier performance

Monitoring supplier performance

Sharing information with suppliersSharing information with suppliers

Sharing information with suppliers

Managing inventory throughout the supply chainManaging inventory throughout the supply chain

Managing inventory throughout the supply chain

Improving the delivery performance of suppliersImproving the delivery performance of suppliers

Improving the delivery performance of suppliers

Material flow and the factoryMaterial flow and the factory

Material flow and the factory

Production scheduling processProduction scheduling process

Production scheduling process

Calculating production capacityCalculating production capacity

Calculating production capacity

Visual managementVisual management

Visual management

Health and safetyHealth and safety

Health and safety

HousekeepingHousekeeping

Housekeeping

WasteWaste

Waste

Ensuring equipment is availableEnsuring equipment is available

Ensuring equipment is available

ChangeoversChangeovers

Changeovers

BottlenecksBottlenecks

Bottlenecks

Consistent manufacturingConsistent manufacturing

Consistent manufacturing