In the second part of this two part series on Performance Driven Management, we will discuss the use of Daily Management (DM) Boards, the DM Board review process and the steps to implement an overall process for a Daily Management System (DMS).
In the first part of this series we discussed the importance of measurement and analyzed the concept of “What Gets Measured Gets Done.” Primarily we looked at determining what to measure. In Part 2 of this series we are now going to discuss the concept and tools of how to measure performance.
In the last article we discussed the idea of a Daily Management System. This approach or DMS focused on the following:
- Management to be on the floor daily (Walk Around Management)
- Key issues preventing attainment of target performance levels are well understood
- Everyone is involved in problem solving and key activities are clearly identified and assigned
- Daily performance metrics are being clearly communicated and summarized relative to established goals: SQDC’s
- Local (area) metrics are linked back to overall plant or office performance.
One of the primary tools in a DMS is the use of Daily Management Boards. A typical Daily Management Board or DMB is used to track developed metrics and provide the results to personnel on a defined measurement basis using the many concepts of LEAN. DMB’s may track a number of different performance metrics or may only track one metric. As was discussed in Part 1 of this series, the determination of what to measure is dependent upon the needs of the organization and what is perceived to be the most critical elements for measurement.
An example of a typical DMB will identify what the main measurement is. This will be coupled with how the measurement is communicated, if problems occurred within the process that impacted performance, what those problems were and how where they resolved, the frequency of measurement and any LEAN tools used to enhance the process.
Coupled with DMB’s, is the actual review process. Most DMB Review processes occur on a frequent basis, mostly every 24 hours. This process ensures that the DMB is being accurately and timely updated with fresh ideas and thought processes on how to resolve issues on the floor as well as identification of new issues and potential resolution of those issues. Most DMB Review processes will focus on the following:
- Outlining proactive actions and solutions to current problems identified
- Review of quality performance over the reporting period
- Review of production schedules and whether work is ahead/behind
- Review of waste performance over the reporting period
- Review of other key operational issues over the previous 24 hours
- Time for questions
These meetings usually are led by a floor or production leader but can be led by management or a staff employee. These meeting should usually happen every 24 hours and focus on continued operational and quality improvement. Remember, LEAN is about meeting customer demand and putting the customer first in order to improve your processes around the customer.
While having DMB’s and Daily Review processes is great, it is hard to accomplish your goals without an actual Daily Management System to wrap everything up into. Most Daily Management Systems or DMS will use visual techniques to monitor and control performance on a day-to-day basis. Most DMS’s have the following common characteristics:
- Daily kick-off meetings
- Every day “by-the-hour” measurements
- Perform general daily activities and communicate conditions relative to goals i.e. a plan for every process.
- Take corrective action as needed
Some recommended process steps to implement an effective DMS is as follows:
- Identify goals for the day – This can be done through reviewing production and other activity schedules, identifying other necessary activities during the day (i.e. maintenance, product development, and training), establishing throughput and productivity goals and communication of those goals.
- Conduct other necessary activities throughout the day, as required/as planned
- Review performance every hour – perform walk around management looking for non-standard conditions, review the day-by-the-hour charts, verify that other necessary activities are being performed and ask questions when performance is not being met.
- Take action, when necessary, to correct non-standard conditions – Remind people of the goals and expectations, re-assign personnel when necessary and stop production if a problem persists.
- At the end of each day, review performance – Communicate results to people involved and identify changes needed for the next day production or next shift.
An effective Performance Driven Management System can keep employees and operations on time and on task while meeting the most important demand and that is the customer. For further background on Performance Driven Management contact the LEAN Accountants of McKonly and Asbury, LLP. Another great source of information on this topic is MANTEC. MANTEC can be reached at www.mantec.org.