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To develop KPI and assessment methods

to implement smart manufacturing in SME


SUBMITTED BY:
RANJAN KUMAR PATEL
Reg. No. PG/MSE/136011
UNDER THE GUIDANCE OF:
Mr. AMRIK SINGH

DR.

JATINDER MADAN
(Associate Professor)
(Associate professor)
DEPARTMENT OF MECHANICAL ENGINEERING
SANT LONGOWAL INSTITUTE OF ENGINEERING AND
TECHNOLOGY
148106(PUNJAB)

(Deemed-to-be-University), LONGOWAL, SANGRUR-

CONTENT
Introduction
Literature review
Problem formulation
Research methodology
Objectives
References

INTRODUCTION TO KPI
KPIs are assorted variables that organizations

use to assess, analyze and track


manufacturing processes.
These performance measurements are

commonly used to evaluate success in


relation to goals .
KPIs tend to vary by organization to

organization and industry to industry.

Seven most important kpi in


manufacturing sector
Count(Good or Bad)
Reject ratio
Rate
Target
Takt Time(Cycle time)
Overall Equipment Ratio
Down Time

Defining KPIs
Specific
Measurable
Achievable
Result oriented
Time bound

Literature Review
Requirements
metrics

and

Prerequisites

of

In a first step general requirements of KPI are summarized

to provide a solid knowledge base for the development of


the necessary KPIs .
Levinson and Rerick (Levinson and Rerick, 2002) define
three standards
for
appropriate performance
measurements:
1 Measurement should be objective, could be precisely
defined, and could be measurable with numbers.
2. Performance should be controlled by people or
department that is measured.
3. The performance measurement must help the company
to meet its goal.

CONTD:
Maskell (Maskell, 1991) postulates the following
characteristics for a performance measurement
system in a world class manufacturing enterprise:
They are intended to foster improvement rather
than simply monitor performance.
They change over time as needs change.
They are simple and easy to use.
They provide fast feedback to operators and
managers

CONTD
According to Lind (Lind, 2001) who conducted

a case study to understand the financial and nonfinancial measures of a World Class Manufacturing
company revealed that non-financial measures
were used for the day-to-day control, whereas
financial measures were used for long-term
control .
Neely et al. (Neely, 1994) regard performance

measurement as the quantification of the


effectiveness
and/or efficiency of an activity over a given time
period.

Problem Formulation
There is lack of integration

among KPI and other


assessment method so that it always produce results
which help plant to achieve their objectives.

There is no specific model which show effect of other

KPI if it had been chosen.

To produce KPI reports manually requires considerable

time. It is often the department managers who face


the never-ending task of compiling their key
performance indicators and producing reports
accordingly.

RESEARCH METHODOLOGY
REGRESSION ANALYSIS entails analysis of a
sequence of measurements made at specified
time intervals.
Smoothing method uses the averaging methods
and exponential smoothing methods to reveal
clearly the underlying trend, seasonal and cyclic
components from data sets.
Linear programming the types of models that
can be used are the descriptive mathematical
models and simulation models.

CONTD:
Excel model The modern trend in programming
applications is graphical interfaces. This means that
the user interacts with a program through a
graphical interface e.g. values are entered in text
boxes, options are selected from graphical menus
and answers are presented graphically.

Incuity a software based program in which metric


prepare in the form user friendly excel sheet and
graphs.

Objectives
The thesis will focus on the problem of
performance
assurance
from
multiple
directions:
Identify the unique characteristics of KPI for
performance issues for SMS.
Determine the measures of performance for SMS (i.e.,

the metrics).
Develop methods for interpreting metrics in terms of

the KPIs for SMS.


Identify approaches to

deviation.

address

performance

What is the new technical idea


One of the fundamental requirements for Smart

Manufacturing Systems is that they are able to


rapidly respond to situational changes with an
acceptable
level
of
performance.
To
fundamental measurement science challenges
for meeting this requirement are to recognize
changes in performance through the use of
performance measures and to define those
measures in such a way that performance
problems can be traced to the source. Finally,
understanding
correlations
between
performance measures, as well as accuracy of
the measures, can be used to establish an
acceptable system performance .

References
SMEs.
Journal
of

Manufacturing
Technology
Management, Vol. 17, 460-471.
AHLSTROEM, P. & KARLSSON, C. (1996) Change
processes towards lean production: The role of the
management
accounting
system.
International
Journal
of
Operations & Production Management,, Vol. 16, 4256.
BOURNE, K., MILLS, J., WILCOX, M., NEELY, A., PLATTS,
K. (2000) Designing, implementing and updating
performance measurement system. International
Journal of operations management, 20, 754-771.
CARTON, R. B. (2006) Measuring organizational
performance : metrics for entrepreneurship and
strategic management