Presentation on theme: "EICC Working Hours Taskforce KPI Scorecard May 2010."— Presentation transcript:
EICC Working Hours Taskforce KPI Scorecard May 2010
2 Overview Objectives Potential KPI Cause and Effect Diagram KPI Impact Interaction Matrix KPI Reporting Guidelines Examples of Recommended Methodologies* KPI Development Progress Scorecard Summary * The root causes included in this presentation and in the KPI guidelines are examples only and are not based on actual root cause analysis data or results. Each situation is unique and should be addressed accordingly with the Root Cause Analysis Tool provided as part of the Working Hours Task Force toolkit.
3 Objectives Provide high-level understanding of the various Key Performance Indicators that may be of value when addressing possible root causes of excessive working hours. Provide an understanding of the interactions between departments within an operation that may impact working hours performance. Recommend review process for KPIs.
4 Return Impact Reporting Root Cause Orders outside of lead time Material delivery / safety stock level Resource planning accuracy # of workers exceeding working hours limit # of workers without 1 day/wk off in 7 days Overtime pay Attrition rate Productivity Training cost delta Total cost trend Satisfaction rating High-Value KPIs: Excessive Working Hours Cause and Effect
KPI Impact Interaction Tool
6 KPI Reporting Guidelines
7 Three Examples of KPI Development Tool in Use 1.Identification of working hour overages or lack of rest days (includes both EICC and China OT legal requirements) 2.Potential excessive working hours created by material shortage 3.Potential excessive working hours created by life cycle volume inaccuracy The following examples are intended to illustrate use of a KPI Scorecard to track specific indicators of, or contributing factors influencing excessive working hours.
8 KPI Development Methodology – Example Working Hours Elements of KPI Primary owner (for reporting metric) HR, Finance Method – Trend Analysis Management Influence – Sales, planning/forecasting, HR/workforce planning, operations, materials Type of Indicator – Lagging Potential Causes – Orders exceeding capacity, unexpected demand, lack of required workforce resources, material availability Comments – Requires accurate weekly/monthly data reporting from time and attendance system Steps to take Establish methodology to extract time & attendance data Collect and report out working hour and rest day data on weekly basis Analyze working hour (and rest day) data to determine whether it meets EICC and local legal requirements Identify potential trends and root causes of work hour overages; implement plans to address root causes Continue to track performance against EICC/local legal requirements and address overages Work hours and rest days meet EICC requirement, but fail to meet China OT legal requirement for Feb – Sept.
9 KPI Development Methodology – Example Material Availability Elements of KPI Primary owner- Suppliers Material Management and Brands Purchasing Method – Waterfall Chart, Trend Analysis Mgmt Influence – Sub-tier suppliers, Planning Type of Indicator – Leading Potential Causes – Force Majeure, Cost Pressures, Incorrect or poor data inference. Comments – Impact to working hours occurs when material is not available and then a catch up schedule is introduced to match revised availability. Steps to take Establish % flexibility of production in contract Establish material lead times Establish % material to be held in buffer/safety stock Establish material delivery plan Track performance to plan Measure results using number of units short of plan and time to recovery with and without over time Determine course of action keeping in mind elimination of excessive working hours Material shortage begins to drive need for additional work hours
10 KPI Development Methodology – Example Life Cycle Volume Accuracy Elements of KPI Primary owner- Brands Sales and Marketing & Communications Teams, Retailers, End Customer, Suppliers Production and Shipping Teams Method – Market Research, Trend Analysis (historic, present and future), Communication of Demand (Brand) Production & Shipping (Supplier) Management Influence – Brands Planning Teams, Retail Forecasting Teams, Suppliers Production, HR and Purchasing Teams Type of Indicator – Leading Potential Causes – Fluctuating Retail Demand (Retail / End Customer), Overly Aggressive Forecasting (Brand), Inadequate Resource Planning (Supplier), *Unusual or Emergency Situations Comments – Requires monthly reporting of clearly defined and agreed upon metrics Steps to take Establish a trusting business relationship with clear and transparent communication between all parties Plan to EICC working hours requirement With the Code in mind, define terms & conditions for the Retail/Brand relationship and the Brand/Supplier relationship (upside flexibility, lead times, committed capacity etc) Establish agreed upon reporting metrics (forecasting signals, production planning methods, shipment plans) Ensure adequate resources are in place to meet demand (Supplier) In an *Unusual or Emergency Situation, Supplier tracks any excessive working hours as a result (per worker, per week) Set up formal review of excessive working hours KPI data (Brand and Supplier) Supplier develops a recovery plan to meet EICC requirement for excessive working hours *Definition of Unusual or Emergency Situation - Per EICC Working hours Guidelines: Unpredictable events that require overtime in excess of legal or EICC limits. Such events cannot be planned for or foreseen. Equipment breakdown, power failure or other emergency resulting in prolonged shutdown of a production line. Unforeseen raw material or component shortages or quality issues that shut down production. Excessive overtime is then needed in both situations to recoup lost production time and meet customer commitments.
11 Sample Scorecard for Implementation of KPIs Supplier Production Management Customer Demand Planning, Supplier Production Planning Procurement, Sub- tier Supplier Performance TBD Supplier Production Management Working Hours KPIs Over WH LimitOne Rest DayLCV Accuracy Material Availability TBD (Based on root cause analysis) Evaluation Process Established Data Collected Results Analyzed Improvements Identified Results Analyzed Improvements Identified Evaluation Process Established Data Collected Results Analyzed Improvements Identified Indicators: Implement- ation Steps Responsible for reporting
12 How Do I Start? Be proactive! Engage senior management Identify the root causes of excessive working hours Select KPIs and gather data Establish a regular, formal KPI review process to create accountability across the organization, monitor progress and take corrective action Ensure that all departments and organizations which contribute to the conditions for excessive overtime take ownership for reducing working hours Share your challenges and progress with your customers Collaborate with customers to address brand-related factors The most important thing is to get started! Establish your baseline, and track your progress.