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Ensure Corporate-wide Goal Alignment by Empowering the Production Floor with Key Process Indicators (KPI) through SAP

Any organization wanting to practice Lean techniques knows that the core objective of Lean is to eliminate the amount of non-value added activities in the process. The financial metrics and benefits of a Lean process can be calculated through profit and return on investment analysis. The keys to success in a Lean environment are training and communication in the name of corporate goal alignment.


Daily Value Added Time ThumbnailTo achieve these Lean objectives, it takes commitment from the entire workforce. How do you ensure goal alignment on the production floor to achieve the desired outcome? The answer is, of course, communication excellence. Information must be communicated efficiently and effectively to each employee. The information must be relevant, meaningful, timely and easy for all employees to understand.

For us, that information is Process Cycle Efficiency, which is the value added time required to complete the process divided by the total elapsed time of the process. Process Cycle Efficiency has many uses. It is a great Lean metric for one of management’s key process indicators. It helps to maintain accurate and dependable lead times. Most importantly, it lets each employee see how their actions contribute to the company’s success.

With SAP customized reporting, the data is easy to share. What we’ve done is train all production floor personnel on the meaning of Process Cycle Efficiency and the exact data used to calculate it. The total elapsed time of the process is derived from subtracting the actual start date of a production order from the actual finish date. The value added time is derived from employee’s time bookings to direct labor operations in the production order. The report is run as a background job overnight and new information is displayed on the production floor monitors daily. The output is listed, per work center, by material number and each operator’s contribution is included in the display.

As a result of SAP’s significant customization and reporting capabilities, linked with employee empowerment, we are able to save countless labor hours by avoiding time consuming meetings that it would take to relay the same information. Most importantly, we now have the entire workforce singing from the same sheet of Lean music.

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Wednesday, 20 March 2019