Measures of Performance

Within the LEAN business environment, it is necessary to measure performance, and utilising visual management systems aid us to do this. The most common measures relate to quality, cost, and delivery (QCD).

The Department of Trade and Industry have provided seven measures for QCD, and they are: not right first time, delivery schedule environment, people productivity, stock turns, overall equipment effectiveness, value added per person, and floor space utilisation. Furthermore, in addition to these customer service measures, aspects such as safety, training and development, and environmental have a part to play too.

There are quite a few techniques to measure QCD, such as graphs, pie charts, pareto charts, matrices, pictograms, and Gannt charts. It doesn’t really matter which method you use, what is important is that the information is communicated quickly and accurately. 

Learning Objectives:
 •    Examine what factors are used to measure performance in a LEAN business environment
 •    Distinguish between the seven measures of quality, cost, and delivery
 •    Assess the different techniques whereby quality, cost, and delivery is measured