YIELD combined with counting inventory is perhaps even more powerful
Measuring and monitoring “Yield” within your facility can reveal interesting information about how well you utilize your materials and cash.
Many organizations already use Value Stream Mapping to assist them to identify projects that will deliver cash during the coming annual operating plan. Many mapping organizations now have enhanced their mapping techniques to include looking at environmental issues related to operations. I personally have taken the exercise of Value Stream Mapping even further. Since the VSM exercise is normally conducted on an annual basis it allows for a deep look at your operations … so now while gather data for the mapping exercise I now consider some other factors;
Employee turnover and casual absenteeism … what makes this job function unattractive to employees and what can we do to make it better … remember to always look at an operation through your parental eyes to determine if this is a function you would want your kids to do?
Machine Up-Time … how robust is the operation in value stream sequence and how reliable.
Are “Current Best Practices” documented and followed by team members … also what is the scope of decision making capability allowed at the team ember level.
I now spend a considerable amount of time assisting folks on how to capture a yield number for their operation and/or Value Streams. In the most of simple terms, the calculation is total pounds of material received vs. total amount of pounds of goods invoiced and then factoring in the delta of your inventory status for that time period.
Usually the data is actually quite easy to capture since most Bills of Lading require the shipper to post the weight of the shipment. You should always attempt to reconcile to the received number.
Now let us begin to reconcile.
Initially, I am not looking for accuracy as much as I am looking for trends. I am looking to insure that the maximum amount of incoming material is converted into saleable product that my customer is willing to pay for.
So starting at the shipping department I begin to assemble all of the out-bound Bills of Lading and begin to categorize them along with the weights;
Customer Invoiced Shipments
Shipments to recyclers
Garbage (tipping fees)
The sum of these numbers should get you pretty close to 100%.
If not, dig deeper to see how material is potentially leaving your
facility without documentation or possibly compensation.
You can begin to look at the categories identified to how goods
are relieved from your operation to seek potential opportunities
Improved Material Utilization
Once you have these numbers you can also have some fun with them like comparing your purchase cost per pound of incoming material (total pounds received divided by dollars to be paid in the same time period) vs the average selling price per pound of customer invoiced goods shipped. IF you are up-side down in this number … you have major problems … but how does the selling price of your product compare in value to everyday items you purchase in the grocery store … this may be a number your employees can resonate towards and inspire ideas to increase value or reduce cost.
Like everything else, keep this metric simple … you are looking for trends and the low-hanging fruit … don’t allow your operation to add complexity in completing this metric and allowing it to become yet another complex sub-system … that would just not be Lean.
This is not an earth shattering metric but rather just another quick litmus test of your operations and also provides a quick and simple audit of your operations.
"Perfection is not attainable. But if we chase perfection, we can catch excellence.”
Vince Lombardi (1913 - 1970)