Operational Performance Analysis and Improvement Plan 21255100

Importance of Productivity as a Key Performance Indicator

Productivity is a vital key performance indicator (KPI) that significantly impacts Triebkraft GmbH's efficiency and its
ability to meet customer demands. By optimizing resources and maximizing output, the company can enhance
operational efficiency, improve profitability, and maintain a competitive edge in the market.

Assessment of Productivity and Efficiency Based on Data Analysis

To assess the efficiency and effectiveness of the operation, we conducted an analysis of the provided data sets,
including the company scorecard and demand data. This analysis aims to identify the root causes of production
inefficiency or ineffectiveness and draw clear conclusions. The company scorecard highlights productivity as a critical
key performance indicator (KPI). In 2023, the target productivity is set at 110 units/head/month, while the actual
productivity over the last 12 months averaged at 79 units/head/month. This indicates a significant productivity gap of
approximately 28%, suggesting substantial inefficiencies within the production process. Examining the demand data,
we observed consistent monthly average demands ranging from 1500 to 2400 units. However, the production levels
fluctuated between 1500 and 1800 units on average per month. This disparity between demand and production
indicates that the current production capacity might not fully meet customer demand, potentially leading to delayed
order fulfilment and customer dissatisfaction. Considering the operational information provided, we focused on
three key processes: blanking, roughing, and finishing. The cycle times for each process are 17 minutes, 28 minutes,
and 32 minutes, respectively. Additionally, there are four blanking stations, four roughing stations, and five finishing
stations. This analysis provides insights into the time spent on each process and the overall capacity of the
production line.

Justification for Prioritizing Productivity as the Key Area of Assessment

Based on the analysis, we chose to prioritize productivity as the key area of assessment due to its direct impact on
meeting customer demands and maximizing output while minimizing resource utilization. The analysis revealed a
significant productivity gap of approximately 28% between the target and actual performance. This gap indicates
substantial inefficiencies within the production processes, leading to suboptimal output levels. This problem will
increase steadily throughout 2023 as the demand is forecast to increase therefore the production rate will need to
keep up therefore we must increase productivity. By addressing these inefficiencies and increasing productivity,
Triebkraft GmbH can enhance operational efficiency and meet customer demands more effectively. Improved
productivity will contribute to increased output and revenue generation, ultimately strengthening the company's
competitive position in the market. In conclusion, the analysis of the company scorecard, demand data, and
operational information led us to focus on productivity as the primary area of assessment. This choice is supported
by the identified productivity gap and the potential to align productivity with customer demands and achieve the set
targets.
Analysing Operational Performance: Identifying Causes of Shortcomings

The purpose of Section 1b is to delve into the analysis of the operational performance in the chosen area and draw
conclusive insights into the underlying causes of any identified shortcomings. By employing appropriate industry
tools and techniques, we aim to gain a deeper understanding of the factors impacting operational efficiency and
effectiveness.

Choice of Industry Tools

For this analysis, we have selected two industry tools: the fishbone diagram and value stream mapping. Each tool
serves a specific purpose in assessing operational performance. The fishbone diagram helps identify potential causes
of issues by categorizing them into various factors, the value stream mapping will allow us to narrow into each
process in the factory and allow for the discovery of bottle neck and low efficiency.

By utilizing these industry tools, we aim to delve deeper into the operational performance, uncover potential root
causes, and identify areas for improvement.

Above shows a fish bone diagram with some of the root causes decreasing the productivity efficiency of the plant, I
believe the largest causing a lower productivity is the Inefficient work allocation and task management and
inefficient workflow and process flow. Also pointed out in exhibit 2207, there is a large amount of incorrect
paperwork and number of liners being supplied to customers, this could be due to a lack of standardised SOP for the
packing of the liners into the custom trays as there is no time-based pressure for the packing department, therefore
stress upon the worker will not be a factor. Therefore, I believe more analyse on the timing and operational order of
the production of the liners should be completed.
As we can see we have a bottle neck in the finishing cycle, this is due to its long time for one cycle completions (32
minutes) notably 10 minutes for quality control. Even thought there is the most machines for finishing (5 machines),
it is outputting lower than roughing with 4 machines this is not the most inefficient section, as there are still 4
machines for blanking even though it takes 17 minutes to create 2 blanks from 1 tube. This is causing a downtime of
40 minutes per operator running the blanking machine making it 5 hour 20 minutes a day of downtime (based of 8
hours workday assumptions, the legally required 15-minute paid break and a 45-minute unpaid lunch). Over the year
(250 days – number of working days in Poland this year) the amount of money paid to the operators running the
blanking machine for unproductive hours is 52,000 euros. This is a massive loss to the company; it also does not
include the lost revenue that could have been made if the operators were doing something productive.

There is also a lot of retooling time in the roughing stage, with a total of 5 minute allocated to tool changing with the
only other step taking this long being the reloading of the stock into the chuck the other way round.

Concluding that the main factor in the low productivity of the plant being the Inefficient work allocation and task
management and the length of certain steps in the turning process.
Section 2: Proposed Improvements

In our evaluation of Triebkraft GmbH's operational performance, with a focus on productivity, we have identified
several shortcomings and areas for improvement. Based on the analysis conducted in Section 1, we propose the
following improvements to address these issues and enhance productivity within the organization.

A. Metric: Total downtime per hour of work and Liner production Pre Hour of work.

To evaluate the magnitude of the opportunity for improvement, we utilized two key metrics: total downtime per
hour of work and liner production per hour of work. These metrics provide a comprehensive understanding of the
productivity and efficiency levels within the factory, highlighting areas that require improvement.

The total downtime per hour of work metric revealed that the blanking process experiences significant downtime
due to overstaffing, resulting in inefficient labor utilization. This excessive downtime hinders the overall productivity
of the factory and signifies a clear area for improvement.

Simultaneously, the liner production per hour of work metric allowed us to assess the actual output and efficiency of
the production process. By analyzing this metric, we identified the potential to enhance productivity and increase
liner production within the available work hours.

These metrics serve as crucial indicators of the factory's performance, highlighting the need for targeted
improvements to optimize productivity, streamline operations, and achieve higher efficiency levels. By addressing the
identified root causes and implementing the proposed improvement opportunities, Triebkraft GmbH can significantly
enhance its operational performance and meet the demands of its customers more effectively.

B. Evaluation Findings: Root Causes and Improvement Opportunities

Root Causes:

a) Excessive Downtime in Blanking Process: Our analysis revealed that the blanking process experiences significant
downtime, with an average of 40.08 minutes per hour per operator. This excessive downtime is primarily attributed
to overstaffing, resulting in inefficient labor utilization.

b) Lengthy Quality Control Time in Finishing Process: The finishing process has a lengthy quality control time of 10
minutes per liner. This extended inspection period significantly impacts the overall cycle time and productivity of the
process.

Improvement Opportunities:

a) Optimize Workforce Allocation: To address the excessive downtime in the blanking process, we recommend
optimizing workforce allocation. By reallocating one operator from the blanking process to the roughing process, the
staffing arrangement will be revised to 3 operators on blanking, 5 operators on roughing, and 5 operators on
finishing. This adjustment aims to minimize idle time and maximize productivity, resulting in improved efficiency.
b) Streamline Quality Control Process: To reduce the lengthy quality control time in the finishing process, we propose
implementing process improvements such as the introduction of go/no-go gauges. By implementing these gauges,
the quality control time can be reduced to 3 minutes per liner, aligning it with the cycle time of the roughing stage.
This streamlining of the inspection process will enhance productivity and minimize delays.

The diagram to the left shows an example of the go

no-go gauge. It shows the two calibrated steps, If
the liner slips not the go step but does not slip past
the no step when presented to the liner mean that
it is within the spec limit. This will dramatically cut
down the time needed to complete quality control
rather than using the micrometre. This take time as
the measurement would need to be taken at
multiple points along the liner.

By implementing these improvements, Triebkraft GmbH can achieve a significant increase in productivity. The
optimized workforce allocation and streamlined quality control process will result in the production of 12 liners per
hour compared to the current rate of 9.375 liners per hour. This improvement translates to a daily production
increase from 75 liners to 96 liners and a weekly production increase from 375 liners to 480 liners. This boost in
productivity allows the company to meet customer demands more effectively and achieve its business objectives,
this increase of liner production by 21.88% increase the production from the previous high (1800 liner a month) to a
theoretical maximum of 2194 liner a month, keeping up with demand until roughly September, it also close to the
2023 goal only missing by 6 a month. (Based off 110 units/head/month – 20 direct employees.)

The financial benefits of these improvements include an annual saving of 6,182.5 euros due to reduced downtime
and additional revenue of 472,500 euros per year from increased production (21 liners per day over 250 day of plant
operation) . These improvements contribute to enhanced profitability and operational performance for Triebkraft
GmbH. The optimized workforce allocation and streamlined quality control process not only minimize downtime and
increase productivity but also ensure efficient resource utilization and improved customer satisfaction.