the measurement of service performances
TRANSCRIPT
The measurement of service performances
Service performance measurement – General framework
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Systems working “to Stock” (MTS)
Service
Systems working “to order” (MTO, ATO….)
Punctuality
Delivey Accuracy and Completeness
Quickness
Availability
Stock-out persistency
Service performance measurement – General framework
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General considerations
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Order xy Client aa
Delay in week 38
Article 123, 500 pieces
Article 321, 100 pieces
Order yy Client aa
Article 123, 500 pieces Week 37
Article 321, 100 pieces Week 38
The structure of an order
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ROSSO BIANCHI S.p.A
Milan, 25-11-2004
Dear GIALLO VERDI s.r.l.
Order n. 548/zz
Article aaaa…………….n°3 pieces Article bbbb………. …..n°7 pieces Article cccc ……… …. .n°9 pieces
Terms for delivery: . . . . . . . . . . Place of delivery:……………….. Payments terms: . . . . . . .
ORDER ROWS or ORDER LINES
Service measurements – Accuracy (or Precision)
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Service measurements – Completeness
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Service measurements MTS - Availability
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Service measurements MTS – Stock out persistency ( product unavailability)
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Service measurements – The concept of lead time
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Credit Confirmation, Release of Production Order & Acquisition Order
External wait: • Queue at the machine • Wait for materials
Production time
Inspection and final control
lead-time
Storage
Service measurements – The concept of lead time
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setup wait for lot
control manufacturing
Service measures – Performances related to LT: punctuality and timeliness
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Date of the order
Date of production start
Requested date
Planned date
Actual delivery date
(DR - DO) Requested Delivery L.T.
(DD - DP) Production Lead Time
(DD - DO) Total Lead Time
(DD - DR) Delay
(DD - DP) Non planned delay
(DP - DR) Planned delay
TIME
TIMELINESS PUNCTUALITY
The measure of timeliness
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The measure of punctuality
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Delivery punctuality
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ORDERS TO BE DELIVERED in ΔT:
ORDERS DELIVERED (and NOT) in ΔT:
100
Not delivered
Delivered late Delivered in advance
Delivered “on time”
Delivery punctuality
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% orders delivered “on time” = # orders delivered “on time”
Tot orders to deliver in the period * 100
% orders delivered late = # orders delivered late
Tot orders to deliver in the period * 100
% orders delivered in advance = # orders delivered in advance
Tot orders to deliver in the period * 100
% orders not delivered = # orders not delivered
Tot orders to deliver in the period * 100
Delivery punctuality
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Average delay of the orders delivered late =
(# orders delivered late of i units of time ) * i
# orders delivered late
Σi
Average advance of the orders delivered in advance =
(# orders delivered in advance of i units of time ) * i
# orders delivered in advance
Σi
Exercise (1/2)
Cause Jan-Mar Apr-Jun Jul-Sep Oct-Dec
Idle time due to lack of materials 5 10 50 110
Idle time due to lack of orders 10 5 0 10
Idle time due to strikes and organizational causes
20 0 5 5
Idle time due to breakdown 80 40 10 2
Idle time due to maintenance 15 15 15 15
Time for tests 0 0 0 0
Time of setup 35 40 16 22
Standard time of setup 24 36 20 24
Exercise (2/2)
Warehouse performance measurements – ABC-ABC analysis
Efficiency (or productivity) performance
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Productivity
Productivity of production resources
Warehouses productivity
Workforce
Plants
Stock turnover and covering
ABC-ABC analysis
Materials
Availability and potentiality
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Materials management productivity measures
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Warehouse efficiency
Stock turnover index =
Days of inventory =
Σ Consumption period
Average Stock
Days in the period
Stock turnover index
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Materials management productivity measures
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Materials management productivity measures
A B C
Classification ABC: Stock Value
0 1.000.000 2.000.000 3.000.000 4.000.000 5.000.000 6.000.000 7.000.000
0
5.000.000
10.000.000
15.000.000
20.000.000
25.000.000 95 % 80 %
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Materials management productivity measure
HIGHLY REGULAR DEMAND
NOT VERY REGULAR DEMAND
NOT VERY REGULAR DEMAND
IRREGULAR DEMAND
HIGHLY REGULAR DEMAND
REGULAR DEMAND
IRREGULAR DEMAND
OBSOLESCENCE
STOCK OUT
A
ST
OC
K
C B
A
C
B
CONSUMPTION
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Example of distribution
A B C Totale
A 2 2 1 5B 2 4 3 9C 1 4 11 16
Totale 5 10 15 30
A B C Totale
A 6,7% 6,7% 3,3% 16,7%B 6,7% 13,3% 10,0% 30,0%C 3,3% 13,3% 36,7% 53,3%
Totale 16,7% 33,3% 50,0% 100,0%
CONSUMI
GIACENZA
CONSUMIGIACENZA
CONSUMPTION
CONSUMPTION
STO
CK
S
TOC
K
Total
Total
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Example of distribution
A B C Totale %
A 11.546.098,55 4.972.092,65 1.538.899,50 18.057.090,70 78,09%B 1.096.599,80 1.140.101,10 1.472.099,60 3.708.800,50 16,04%C 219.299,40 452.903,75 684.598,25 1.356.801,40 5,87%
Totale 12.861.997,75 6.565.097,50 3.695.597,35 23.122.692,60% 55,62% 28,39% 15,98% 100,00%
Incidenza percentuale giacenza
A B C Totale
A 49,93% 21,50% 6,66% 78,09%B 4,74% 4,93% 6,37% 16,04%C 0,95% 1,96% 2,96% 5,87%
Totale 55,62% 28,39% 15,98% 100,00%
CONSUMIGIACENZA
CONSUMI
GIACENZA
CONSUMPTION
CONSUMPTION S
TOC
K
STO
CK
Total
Total
% of stock
Exercise
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Product Cunsamption StockP1 850,00€7777777777 350,00€777777P10 16.000,00€7777 50,00€77777777P11 700,00€7777777777 400,00€777777P2 1.550,00€777777 30,00€77777777P3 1.500,00€777777 20,00€77777777P4 800,00€7777777777 50,00€77777777P5 1.500,00€777777 350,00€777777P6 300,00€7777777777 90,00€77777777P7 300,00€7777777777 2.500,00€77P8 1.500,00€777777 200,00€777777P9 20.000,00€7777 2.000,00€77
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Materials management productivity measure • High opportunity and high risk • Usually low N° of items: possibility to be more analytical in doing
deeper analysis • Specific situations: – constant stock, frequent fulfillments and in small quantities: reduce safety stock
– constant stock, rare fulfillments and in big quantities: remove the constraints to fulfillment policies – cyclical stock, frequent fulfillments and in small quantities: eliminate seasonality of fulfillment – cyclical stock, rare fulfillments and in big quantities: eliminate seasonality of fulfillment and remove the constraints to fulfillment policies
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Materials management productivity measure
• Hopefully low N° of items; if it is not, “objective zero” • Specific situations: – obsolete items : do not produce/buy any more and get rid of them by promotions, discounts in different markets/canals; even destroy – new products and spare parts: control
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Materials management productivity measure
• Usually low N° of items; “objective increase” • Low level of stock or we do not sell enough? Observe and control
carefully stock out occurrence • Specific situations: – items produced/bought to order – items managed with a Just In Time logic
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Materials management productivity measure
• Usually really high N° of items • Items of no interest for both stock managers and sales managers • Items “heavy” for warehouses management: warehouse data
updating, space, etc … • Specific situations: – if the items are of no interests: check the opportunity to cancel them – if sales are low because the item is not available: improve stock management and control stock out occurrence