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The Lean Benchmark Report

manufacturing cycle time (Figure 8). On-time delivery is considered a process metric because it includes the time that it takes to accept and process a customer order, manage through production (potentially receiving materials from suppliers), and shipping to the end customer. When an organization achieves its order-to-delivery measures, generally this means that each participant who “added value” met his or her individual metrics. And although order-to-delivery may not link directly to a strategic objective, it is a strong contributor to customer satisfaction, which is measured by virtually all companies. Fi- nally, Figure 8 places quality in fourth place relative to importance; however better per- forming companies believe that their ability to successfully meet “first time” quality goals is an indicator of future product quality and efficiency.

Figure 8 Metrics Tied to Success

79%

On-time delivery

62% 66%

52%

Inventory turns

47% 45%

Mfg cycle time

39% 41%

26%

Quality

30% 26% 30%

18%

Cost per unit

30%

35%

Throughput

21% 22%

22%

0%

40%

60%

Average

Laggard

20%

BIC

80%

100%

Source: AberdeenGroup, March 2006

Rockwell Automation is a good example of a company well on its way to building an integrated global metrics program. When Rockwell began its global Lean program five years ago, it leveraged metrics programs at both ends of the spectrum: in manufacturing, it relied on individual metrics to manage performance, and from a corporate perspective it focused on overall financial earnings. Over time, the company has improved the flow of its materials by putting factories closer to the customer and extending Lean processes into the back office; as a result the company has driven between 4%-6% cost productivity each year for the past five years. More recently, Rockwell began to look for additional ways to improve its operational and financial performance yet again. As a result, it has translated financial goals into process metrics (e.g., order-to-delivery) and cluster metrics (e.g., global OEE footprint) and is leveraging its own technology solutions to coordinate and integrate metrics at all levels across manufacturing and around the globe.

All print and electronic rights are the property of AberdeenGroup © 2006. 18 • AberdeenGroup

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