metrics strategies of leading performers

Industry Knowledge for Business Advantage © 2012 Cambashi Inc.

Metrics Strategies of Leading

Performers

1

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Speakers

2

Julie Fraser, Principal Industry Analyst Cambashi Inc.

Research Leader

MESA Metrics Working Group Co-chair

Ted Bobkowski, Principal Innovative Manufacturing Solutions

Industry Council

Active MESA Metrics Working Group member

Mark Lincoln, VP Quality and Operations Terumo Cardiovascular Systems

Industry Leader and respondent


How to Participate Today

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Wide range of services from

strategy to action

Industry analysts, market researchers & consultants

Bringing IT buyers & sellers together

25 years

Headquarters UK (Cambridge)

US office (Massachusetts)

Cambashi overview

4

Industry Knowledge for Business Advantage

Mission-critical aspects of discrete, batch,

process, and related industries


Global community for improving Operations

Management capabilities with effective technology solutions:

Best practices & guidance to drive greater productivity & overall

profitability of manufacturing enterprise

Global Education Program: Educate manufacturing operations on

best practices

Facilitate innovation, collaboration & understanding for real-

time enterprise & Plant to Enterprise (P2E) integration

Connect members to, contribute & exchange strategies for

operations excellence

Visit: www.mesa.org

Manufacturing Enterprise Solutions

Association Mission

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MESA International - www.mesa.org

Waiting for you in MESA is…

A world-class Resource Library of valuable articles, whitepapers, Guidebooks and more

Member companies and individuals in 89 countries

Industry's only independent, professional Global Education Program supported by the global MESA community

A seat at the table to contribute to the dialogue shaping the solutions to drive Operations Excellence for the next 20 years!


MESA Metrics Working Group

7

MESA Metrics Research Timeline

2004 2005 2006 2007 2008 2009 2010 2011 2012

Need data

Members

want to

know Metrics that

Matter: Metrics,

quality matter

Metrics Framework

and Guidebook:

Core practices

Members

form WGs

Metrics for

Major Initiatives:

Lean, RTE, Quality

Holistic Metrics:

Supply chain

Correlating

Plant to Business

Performance

Harnessing the

Power of Metrics

to Diagnose & Solve

WP#35

Liaison to

ISO #22400

Plant KPI

Standards

begins

Metrics

Framework

and Guidebook:

2nd Edition

Metrics

Makeover

Contest

Pursuit of

Performance

Excellence

ROI Guidebook;

IndustryWeek,

Reference Model,

Your topics


Pursuit of Performance Excellence:

continued MESA Metrics Research

8

Continued MESA Metrics Research

New in this report:

Depth & detail into Best Practice Processes

Views into why speed is a challenge

Analysis of widely used metrics

Correlation between improved plant & financial metrics

Key Take-Aways summary

Previous studies available in MESA Resource Library


Thank you to our sponsors

9

SEMICONDUCTOR /

MEDICAL DEVICE

PREMIUM SPONSOR

SUPPORTING

SPONSOR

PREMIUM SPONSORS


Industry Council

10

Members

Manufacturer/producers only (13 active)

Wide range of disciplines, titles, responsibility, scope

Experienced and passionate about metrics

Hot button issues shape survey

• Alcoholic beverages

• Construction materials

• Electronics

• Engineered industrial catalytic

converters

• Food

• Home & garden consumer

durables

• Power generation

• Resins & advanced plastics

• Semiconductors

Industries Represented


Response Demographics

300+ Responses

11

0% 10% 20% 30% 40%

Staff / Employee

Supervisor/ Teamleader

Manager / Projectmanager

Director / Manager ofmanagers / Head of

department

Senior executive / C-or VP-level executive

Scope of Responsibilty

Source: Pursuit of Performance Excellence:

Business Success through Effective Plant Operations Metrics

© 2012 Cambashi Inc. and MESA International

Companies

All sizes, 40% under $100M

24+ industries

Every production mode: discrete,

packaged goods, other mixed,

batch, continuous

Individuals

All regions

Variety of titles & domains


Current Situation

Majority of respondents:

Growing revenues and

production volumes

More products, SKUs,

variants

Increasing automation

Concerned about staff skills

12

More 55%

Same 34%

Less 11%

Concern about Operator Skills: Change Over Past Three Years





People Want Speedier Metrics

13

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Rarely/ never

Monthly or less

Weekly

Daily

End of shift

Within a shift

Real-time (minutes or less)

Satisfaction with Staff Speed to See Metrics by Timing of Availability

Yes: typically fast enough: satisfactory No: typically not fast enough: unsatisfactory

Source: Pursuit of Performance Excellence: Business Success through Effective Plant Operations Metrics © 2012 Cambashi Inc. and MESA International

Metrics drive behavior, actions & outcomes so FASTER = BETTER


Operational dashboard users tend to

use good line level metrics practices

14


0% 10% 20% 30% 40% 50%

Real-time (minutes orless)

Within/end of shift

Daily

Less Frequent

When do operators, line workers, supervisors, and those managing the operations see the metrics for their scope

of control?

OI / EMIUsers

Others


Challenges in timeliness

15

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Extremely Reasonably Not very Not at all

How necessary is it to have an analyst involved to cleanse the data prior to analysis and display?



Differences of opinion about issues

16

0%

10%

20%

30%

40%

50%

60%

70%

Senior executive / C- or VP-levelexecutive

Staff / Employee

What is the Major Problem Causing Slower or Less than Ideal Frequency of Metrics Display of Results?

Lack ofmanagementcommitment

Lack of will tochange

IT challenges



Who are Leading Performers?

Business Movers Defined

17

Improved EBITDA 10% or

more

Improved Net Operating Profit

10% or More

Improved by 1% or more

on over half of the

Business Metrics

in the study

Improvements are average per

year over past three years

Business Movers

25%

Others 75%

Portion of Response Qualified as Business Movers by Financial

Improvement





Business Movers Practices

Speed

Data collection

Analysis

Display & Use

18

0% 10% 20% 30% 40%

Quality metrics

Efficiency metrics

Fully automated data collection for two major groups of operational metrics

BusinessMovers

Others





More likely to use other best practices that enable action

Line-level metrics best practices

19

0% 5% 10% 15% 20% 25% 30%

Others

Business Movers

Portion of respondents that ALWAYS provide line-level metrics to operators and technicians



Metrics Maturity Journey

Understand

Training and education

Start manual

Gain visibility to react

Respond and be reliable in the plant

See trends across the business

Include suppliers and partners; be predictive

20


Types of Metrics More Business

Movers Improve Dramatically

21

Predictive/preventive

Translate operational results

into financial terms

Include suppliers & partners

Holistic/multi-faceted

Non-value added time

0%

5%

10%

15%

20%

25%

Suppliers'manufacturing yield

or test results

Overall equipmenteffectiveness (OEE)

Portion of respondents who improved by 10% or more on

key operational metrics

Business Movers Others





Key to Success: Linking Plant

and Business Metrics

22


0% 10% 20% 30% 40% 50% 60%

Not at all

Not very

Reasonably

Extremely

How well linked are the operational metrics to your financial and business metrics?

BusinessMovers

Others


IT Support

23


0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

ERP MES / MOM OI/ EMI/ OpsDashboard

Use of Selected Information Technologies

Planning to buyin next 1-2years

Some use orpilot

Widely in use


MES/MOM Use Correlates to Success

24

0% 5% 10% 15% 20%

Manufacturing cost as % ofrevenue

EBITDA

Higher portion of MES Users achieved at least 10% improvement on key financial metrics

MES/MOMUsers

Others



Align metrics from business to plant to line

and through the supply base

Train and communicate in all levels critical to business success.

Use metrics consistently as part of the company culture.

Employ sound practices in performance measurement.

Engage, educate, and empower employees

Understand metrics to enhance skills.

Provide line-level metrics during the shift.

Two of Top Six Take-Aways

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Go out and improve

Use metrics to align efforts,

learn and improve

Gain speed: it matters to

employees and results

Move toward metrics that tell

the entire story

Use applications to support

speed and improvement

Be confident IT has a payback

Metrics maturity is a never-

ending journey: keep at it!

26


Julie Fraser

Ted Bobkowski

Mark Lincoln


Learn more with us…

28

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www.mesa.org, www.cambashi.com

Comprehensive Report from MESA Resource Library

Participate in the MESA Metrics Working Groups

Work with Cambashi, MESA and the Study Sponsors

to accelerate your journey to Business Success

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