The performance of production systems should be checked

The best known production system is surely the Toyota Production System (TPS). Companies not producing cars try to implement elements of the TPS also for their productions. Often they call it their production system and name it with their company name. This adoption of the TPS should be done carefully and needs a holistic view.

Let us remember the history. The success of Toyota in the past and the work Toyota has done with its suppliers to adapt Toyota production made the industry curious about introducing this successful system to its production systems. This was often started by implementing some elements of the TPS in these companies’ production systems. Elements like “continuous improvement,” “total productive maintenance”(TPM), or “just-in-time deliveries” (JIT) have been implemented in these productions. The effects have been much lower than expected. After several years of investigating TPS, a lot of companies found their way into the production system, and they gained advantages from this.

What should be done to assure the successful implementation of a production system?

It is still right to concentrate on the elements of the TPS. If someone defines the production system for his plant or his company, he should put all elements of the TPS on a table. The next question would be: Are these elements fitting to my production scope or do I have to modify elements to apply them to my production? That gives us the first sorting of the elements. There will be elements that can be applied directly, there are elements that have to be modified, and there will be elements that are practically impossible to apply. The intention should be to use as many elements of the TPS as possible. The elements are somehow connected and their connections are not always immediately visible.

To give an example: We implement TPS in our production. It should improve the OEE (overall equipment efficiency). We will increase the utilization time of our machines, and due to this we will save investments and capital costs. We need less floor space and have lower maintenance costs.

OEE Definition: OEE = Actual output / Theoretical Maximum Output

OEE = Availability Ratio x Performance Ratio x Quality Ratio

In the calculation elements are implemented to ensure the cycle time, the machine breakdowns, and the quality. To be really successful with TPM, we have also to implement elements like continuous improvements, TQM (total quality management), and so on.

TPS is a system and not an element tool box.

The implementation of a production system should influence the three main areas of production: quality, delivery performance, and costs. To ensure this, we should build a KPI-tree, which shows us the expected effects. Even if it makes it difficult to define the direct mathematical influences, by logic it is already possible to create the KPI-tree.

This KPI-tree could, for example, look like this:

Result KPI Quality Delivery Cost
Value stream KPI First pass yield Inventory

 

Direct productivity

 

Monitoring KPI

 

End of line failure

 

EPEI                             Needed working hours

OEE

Quality losses

OEE

Needed working hours

Planned down time

Improvement KPI   Lack of material Number of workers

 

Making the KPI- tree complete assures us that, with the immediate implementation of a production system, we are following the effects. This shows us the effectiveness of the system and assures is that we can further improve on it. It also ensures that we have our production system complete in place. If we had forgotten something, we would not see any  improvements. The KPI-tree gives us the chance to find the missing improvement KPI, and with this the missing improvement action or improvement area.

Let’s summarize:

The implementation of a production system should be followed with a KPI-tree to ensure that the production system will influence our result KPIs. The direct actions we implement are measured with improvement KPIs. These KPIs should influence the monitoring KPIs. Monitoring KPIs are collected in the value stream KPIs and are reflected directly in the result KPIs. This system ensures that our actions always impact the company’s results.

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