This document summarizes a conversation with John Jackiw on metrics, KPIs, and process insights for implementing high performance manufacturing. It discusses a three-layered model for metrics at the corporate, operations, and external financial levels. It also introduces the concept of Resource Consumption Accounting (RCA) as a tool that brings together real-time operations data and a quantity-based cause-and-effect methodology to enable better production and financial decisions. RCA leverages both manufacturing execution systems and ERP packages to provide a common understanding of resource consumption across management levels.

1. Metrics, KPIs, and Process Insights –
Implementing High Performance MI
A Conversation with John Jackiw
MESA Metrics Committee Team Leader
Alta Via Consulting

2.  Increased number if SKU’s or variations produce
 What are the business leaders doing?
 Do you want lead or Lag in your business
 Free Summary Version of “Pursuit of Performance
Excellence” available through MESA
https://services.mesa.org/ResourceLibrary/ShowResource/fc2c93d8-
00f9-472c-99cb-15c342ec8b7c
What is Business Doing to Stay Ahead

3. Three Layered Model
Corporate
Financials
Aggregated Financial
& Operations Metrics
Operations-level KPIs &
Dynamic Performance Metrics
 First-pass yield
 Process capability per plant (CpK)
 Scrap/rework as percentage of sales
 Customer reject rate (PPM)
 Warranty costs
 Manufacturing cycle time
 Overall equipment effectiveness (OEE)
 Customer fill rate/on-time delivery
 Cash Flow
 Net operating profit (value of shipments less
material & mfg cost)
 Productivity in revenue per employee
 Earnings before interest, taxes, depreciation
and amortization (EBITDA)
 Customer Satisfaction
 ROA/RONA
 Labor cost per unit
 Percentage planned vs. emergency
maintenance work orders
 Hours of overtime per week
• Average days WIP inventory
• OSHA-reportable incidents/year
• Etc, etc, etc…
Increasingaggregation
External
Financial
Accounting/
Reporting
Conventions
Internal
Management
Accounting

4. Manufacturing companies typically have
disconnected operations and finance. RCA is a
Tool that brings together real-time solution,
together with a quantity-based - cause and
effect methodology.
Unlike MES or ERP packages alone, our solution
leverages both worlds and enables better
decisions for both production and finance.
Solution Summary

5. What is RCA??
Action Relies on Resource Consumption Accounting

6. Demand driven planning with capacity
sensitivity
 Built with RCA (Resource
Consumption Accounting)
methodology as a foundation
 Easily understand the resources
your line/area are consuming.
 Empower your managers
with common understanding
Quantity-Based Approach

7. Corporate Headquarters
MANAGERIAL ACCOUNTING –
MULTI-LEVEL P&L
7
Plant Labor
Direct
Materials
Capacity
240 Hrs.
Capacity
240 Hrs.
Capacity
Unlimited
1 lbs. per unit
4 hrs. per unit
2 hrs. per unit
80 hrs. per month
80 hrs. per month
30 hrs. per month
80 hrs. per month
Plant
Maintenance
Calculated based
on production
$300
$1.25
per unit
$200
$0.83
per unit
$10
per unit
Proportional Cost
Fixed Cost
7
Corporate P&L
Plant P&L
Product P&L
Materials
Proportional Cost
Fixed Cost
xx
xx
xx
Idle Labor
Fixed - Training
xx
xx
Fixed HQ Reporting xx
Revenue xx
Product Margin xx
Plant Margin xx
Corporate Margin xx
RCA Institute All Rights Reserved
Alignment Achieved

8. The Storyboard
 For Illustration ONLY

9. “Progressive Insights” Drive Needed Changes
© 2011 Atos Origin. All Rights Reserved.

10. Questions?
A Conversation with
John Jackiw
Alta Via Consulting
Link to Recorded Webinar

11. John Jackiw
Team Leader, MESA Metrics Committee
Business Development Manager
Alta Via Consulting
Tel: (708) 638-5206
Email : JJackiw@altavia.com