In this second post on KPIs, I will look at the quality of key performance indicators (KPIs). These are essential tools for measuring an organization’s progress toward its strategic goals. The quality of these indicators is critical as it impacts management’s decision-making and subsequent actions. Let’s have a look!
What are Good KPIs?
To control any kind of system, you need to know its status. For a simple system like heating, the indoor temperature may be the key input. For something as complex as manufacturing, however, there could be a myriad of different measurements that can help you to control the system. In this context, KPIs (key performance indicators) become crucial, offering a structured way to monitor various aspects of operation, from safety and quality to productivity and cost. Ensuring the right balance and focus among these KPIs can lead to more informed decision-making and enhanced operational efficiency. In this post I would like to dig deeper on what KPIs are good, and how you can go wrong with (too many?) KPIs.
The Toyota Total Link System Chart (TLSC)
The Total Link System Chart (TLSC) is a tool used by Toyota to show the multiple connections on the “when,” “why,” “how,” and “what”—not only of a production system but also in all business reforms at Toyota. While used often at Toyota, it is nearly unknown in the Western world. Time to look at the Total Link System Chart in more detail.
Effects on Efficiency—Group Size, Line, Location, Product
In my last post, I started to look at factors that affect the efficiency of your line, in particular the percentage of value-added time by the operators. For this I have a good data set with fifty-three different observations. One major factor was the speed of the line. Faster lines are not only easier to optimize, but they also yield more benefit for the optimization. In this post I will look at group size, as well as comparing Japan and Germany, final assemblies with subassemblies, and passenger cars with commercial vehicles.
Effects on Efficiency—Takt Time
Whenever I visit a factory where manual work is done, I try to estimate the percentage of value-adding time. This brings up an interesting question: What factors do affect the percentage of value-adding time? Let’s dig through my data to see what matters.
The Grand Tour of German Automotive—The Unusual Volkswagen Transparent Factory Dresden
As part of my Grand Tour of German Automotive, I also visited the Volkswagen Transparent Factory Dresden (Gläserne Manufaktur). This plant is something of an oddball in automotive manufacturing, very different from all other automotive plants I have seen. Its purpose is quite different from “normal” car plants, and hence it cannot really be compared to a normal car plant. But it does fulfill its purpose rather well, albeit not quite cheaply. Let me show you this unusual plant…
The Grand Tour of German Automotive—Volkswagen Osnabrück
The Volkswagen plant in Osnabrück is actually the plant of the former cabriolet specialist Karmann, which went bankrupt in 2009 and was bought by Volkswagen. It is the specialist plant for the Volkswagen brand for cabriolets… but the Volkswagen brand will stop making cabriolets in 2025. It is also the overflow plant if other VW plants need more capacity… but VW itself has overcapacity. As a result, the plant suffers from a lack of love and especially money for investments from the Volkswagen headquarters. Hence, the plant looks run-down. But despite these disadvantages, the organization itself was decent, and better than in Wolfsburg or the Audi plants.
Happy 11th Birthday, AllAboutLean.com!
Yet another year has passed, and AllAboutLean.com is now eleven years old! Every year I am surprised that I again managed to write and publish 52 blog posts, one for every week. And, by writing I mean actually writing, not just AI-generated text garbage. This is now the 579th post on this site! Since day one my goal has been to spread knowledge of lean, and based on the success of AllAboutLean.com, it seems to be working :).