Original Date: 10/18/1999
Revision Date: 01/18/2007
Information : Measures of Performance System
To improve one’s business, an indication of performance is necessary to determine the current status of one’s company and the target for which one is striving. In the past, Orenda Turbines’ performance measurements were not formalized. Understanding and applying measures of performance varied throughout the company. A few resulted in producing effective tools, but most did not. In 1996, Orenda Turbines resolved this situation by developing the Measures of Performance (MOP) system, which has evolved into a reliable and effective tool for improving the company’s business.
The MOP system is a Microsoft Access, LAN-based program designed to provide weekly performance measurements pertaining to turnaround times, cycle times, subcontractor turnaround times, reworks, and work-in- process levels. The key to developing these indicators was to focus on a few measurable factors which would have the greatest effect on customer services. Turnaround time measures how many parts are being delivered to the customers beyond the scheduled date. Cycle time measures how long parts remain idle on the shop floor before advancing to the next stage. Subcontractor turnaround time measures how long parts spend outside the company at a subcontractor’s site. Rework measures how much time was spent reworking the parts. Work-in-process levels measure the number of parts in process on the shop floor. Each indicator relates directly to a delivery schedule or cost. All of Orenda Turbines’ business units subscribe to the same standard indicators. The MOP system uses easy- to-follow screens for data entry and retrieval. The measures of performance are reviewed weekly by management, team leaders, and cell leaders. Charts are posted throughout the company for all to see.
The MOP system has proven to be an effective tool for improving business operations and enabled Orenda Turbines to obtain a better understanding of performance. This company-wide application continues to improve processes to reduce scrap, reduce inventories to shorten cycle times, and efficiently control assets to reduce work-in-process levels.
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