© BMA Inc. 2008. All rights reserved. Lean decision making Box score.

© BMA Inc. 2008. All rights reserved.

Lean decision makingBox score


Box scoreOperational

Measurements

FinancialResults

Capacity

Usage

• The Box Score shows a Three Dimensional view of the value stream

• Provides an understanding of the operational, financial, and capacity impact of actions and decisions

• Leads to better understanding and better decisions


Box score used for decision-making

Current State Make Product Buy in China Buy LocallyUnits per Person 29.31 26.05 32.56 32.56

On-Time Shipment 97.2% 98.0% 95.7% 96.0%

First Time Thru 54% 63% 52% 60%

Dock-to-Dock Days 8.90 8.5 16.28 10.21

Average Cost $111.74 $113.10 $113.90 $112.66

AP days - AR days 8.0 8.0 8.8 8.0

Productive 31% 35% 31% 31%

Non-Productive 56% 62% 56% 41%

Available Capacity 13% 3% 13% 28%

Revenue $1,611,456 $1,821,456 $1,821,456 $1,821,456

Material Costs $490,296 $586,296 $575,296 $672,296

Conversion Costs $497,933 $527,036 $545,933 $502,254

Inventory $221,163 $234,433 $448,961 $316,484

Value Stream Profit $623,226 $708,124 $700,226 $646,905

Value Stream ROS 38.67% 38.88% 38.44% 35.52%

46.00% Hurdle Rate -7.33% -7.12% -7.56% -10.48%

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Value stream box scorefor weekly performance reporting


Box score current state & future state

Productive Capacity 51% 43%

Non-Productive Capacity 30% 19%

Available Capacity 19% 37%




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Sales per Person $7,472 $7,472

On-Time Shipment 92% 94%

First Time Through 71% 78%

Dock-to-Dock Days 33.0 18.5

Average Cost $419.46 $413.97

Accounts Receivable Days 54.0 50.0OP

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CURRENT STATE

FUTURE STATE

Revenue $332,569 $332,569

Material Costs $111,431 $108,446

Conversion Costs $116,753 $116,753

Total Costs $228,184 $225,199

Value Stream Profit $104,385 $107,370

Return on Sales 31% 32%

Inventory Value $209,336 $113,026Cash Flow $123,117 $288,926

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Typical Lean Improvement

Short Term Operational Improvement is not Matched

by Bottom-Line Improvement

What has bridged the gap?What has really happened?


Eliminate employees & machines





Average Cost $419.46 $413.97

Accounts Receivable Days 54.0 50.0







Revenue $332,569 $332,569



Total Costs $228,184 $225,199




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CURRENT STATE

FUTURE STATE

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$8,493

94%

78%

8.5

$399.17

54.0

64%

27%

9%

59%

19%

22%

$332,569

$108,446

$108,704

$217,151

$115,418

35%

$51,557$125,984

REMOVE UNNEEDED


Increase salesSales per Person $7,472 $7,472




Average Cost $419.46 $413.97








Revenue $332,569 $332,569



Total Costs $228,184 $225,199




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CURRENT STATE

FUTURE STATE

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$8,493

94%

78%

8.5

$399.17

54.0

64%

27%

9%

59%

19%

22%

$332,569

$108,446

$108,704

$217,151

$115,418

35%

$51,557$125,984

REMOVE UNNEEDED

$9,614

94%

78%

16.5

$366.14

50.0

56%

22%

22%

69%

20%

12%

$427,938

$139,545

$116,755

$256,300

$171,638

40%

$118,113$185,283

INCREASE SALES


Introduce new high-value products





Average Cost $419.46 $413.97








Revenue $332,569 $332,569



Total Costs $228,184 $225,199




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CURRENT STATE

FUTURE STATE

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$9,904

94%

78%

8.5

$364.43

54.0

60%

24%

16%

69%

20%

12%

$427,938

$139,545

$115,557

$255,102

$172,836

40%

$62,086$156,921

INCREASE SALES

$10,026

94%

78%

16.5

$366.14

50.0

56%

22%

22%

69%

20%

12%

$446,278

$139,545

$116,756

$256,301

$189,977

43%

$118,114$203,622

NEW PRODUCTS


Insource currently outsourced sub-assemblies





Average Cost $419.46 $413.97








Revenue $332,569 $332,569



Total Costs $228,184 $225,199




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CURRENT STATE

FUTURE STATE

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$9,904

94%

78%

8.5

$364.43

54.0

60%

24%

16%

69%

20%

12%

$427,938

$139,545

$115,557

$255,102

$172,836

40%

$62,086$156,921

INCREASE SALES

$7,472

95%

78%

13.5

$384.07

50.0

52%

22%

26%

69%

20%

11%

$332,569

$92,179

$116,755

$208,934

$123,635

37%

$71,131$184,263

INSOURCE SUB-ASSY






Average Cost $419.46 $413.97








Revenue $332,569 $332,569



Total Costs $228,184 $225,199




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CURRENT STATE

FUTURE STATE

FIN

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$9,904

94%

78%

8.5

$364.43

54.0

60%

24%

16%

69%

20%

12%

$427,938

$139,545

$115,557

$255,102

$172,836

40%

$62,086$156,921

INCREASE SALES

$7,472

95%

78%

13.5

$384.07

50.0

52%

22%

26%

69%

20%

11%

$332,569

$92,179

$116,755

$208,934

$123,635

37%

$71,131$184,263

INSOURCE SUB-ASSY

$8,493

94%

78%

8.5

$399.17

54.0

64%

27%

9%

59%

19%

22%

$332,569

$108,446

$108,704

$217,151

$115,418

35%

$51,557$125,984

REMOVE UNNEEDED


Summary of these decisions

$-

$100,000

$200,000

$300,000

$400,000

$500,000

CURRENTSTATE

REMOVECAPACITY

INSOURCESUB-ASSY

INCREASESALES

NEWPRODUCTS

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

REVENUE

PROFIT

RETURN


Box score to assess capital equipment:identify the problem

Value stream

box score prior to

additional people &

machines

7/31/2004 31-Aug 30-Sep 31-Oct 30-Nov 31-Dec

Units per Person 46.01 44.62 43.15 47.11 51.56 33.07

On-Time Shipment 98.0% 98.3% 99.0% 98.8% 72.3% 100.0%

First Time Through 82% 84% 84% 82% 76% 86%

Dock-to-Dock Days 0.00 8.20 7.60 8.10 3.40 5.60

Average Cost $263.04 259.24 255.83 250.89 217.68 244.65

AP Days - AR Days 0 -8 -8 -8 -8 -8

Productive 31% 31% 31% 33% 48% 34%

Non-Productive 59% 59% 60% 59% 66% 60%

Other 0% 0% 0% 0% 0% 0%

Available Capacity 10% 10% 9% 8% -14% 6%

Revenue $923,974 $895,549 $865,680 $979,075 $1,142,411 $688,827

Material Costs $317,570 $307,908 $297,735 $336,566 $396,024 $236,667

Conversion Costs $345,084 $330,159 $315,691 $353,259 $378,838 $242,745

Value Stream Profit $261,320 $257,482 $252,254 $289,250 $367,549 $209,415

Value Stream ROS 28.28% 28.75% 29.14% 29.54% 32.17% 30.40%

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Box score to assess capital equipment:result of the planned action

Value stream box score with

new equipment and people

7/31/2004 31-Aug 30-Sep 31-Oct 30-Nov 31-Dec

Units per Person 46.01 44.62 43.15 43.99 52.9 30.89

On-Time Shipment 98.0% 98.3% 99.0% 98.8% 99.0% 100.0%

First Time Through 82% 84% 84% 85% 85% 86%

Dock-to-Dock Days 0.00 8.20 7.60 8.10 3.40 5.60

Average Cost $263.04 $259.24 $255.83 $262.44 $236.83 $261.17

AP Days - AR Days 0 -8 -8 -8 -8 -8

Productive 31% 31% 31% 28% 41% 34%

Non-Productive 59% 59% 60% 49% 60% 60%

Other 0% 0% 0% 0% 0% 0%

Available Capacity 10% 10% 9% 23% -1% 6%

Revenue $923,974 $895,549 $865,680 $979,075 $1,142,411 $688,827

Material Costs $317,570 $307,908 $297,735 $336,566 $396,024 $236,667

Conversion Costs $345,084 $330,159 $315,691 $362,054 $362,054 $251,462

Value Stream Profit $261,320 $257,482 $252,254 $280,455 $384,333 $200,698

Value Stream ROS 28.28% 28.75% 29.14% 28.64% 33.64% 29.14%

2 new machines purchased @ $90,000 each6 additional people in the OEM Machining cells

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Box score used for outsourcing decisions

The effect of outsourcing to overcome the

shortfall of capacity in november.

Current Plan Outsourcing Net Result30-Nov 30-Nov 30-Nov

Units per Person 51.56 58.18

On-Time Shipment 72.3% 99.0%



Average Cost $217.68 $260.91

AP Days - AR Days -8 -8

Productive 48% 42%

Non-Productive 66% 56%

Other 0% 0%

Available Capacity -14% 2%

Revenue $1,142,411 $1,142,411

Material Costs $396,024 $14,851 $410,875

Conversion Costs $378,838 $45,461 $424,299

Value Stream Profit $367,549 ($60,311) $307,238

Value Stream ROS 32.17% 26.89%

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Rationalizing products in the value stream & introducing new products with no capital or employee additions

Jan-03 Jun-03 Sep-03

Units per Person 466 395 505

On-Time-Shipment 92 99 99

Dock-to-Dock Days 15 7 9

First Time Thru 65 75 75

Average Product Cost $112.75 $120.94 $109.23

AR Days 42 35 35

Productive 24% 18% 28%

Non-Productive 63% 35% 42%

Available Capacity 13% 47% 30%

Revenue Monthly $10,667 $9,866 $12,800

Material Cost $3,758 $3,185 $4,073

Conversion Cost $2,547 $2,547 $2,547

Value Stream Gross Profit $4,362 $4,134 $6,180

Remove "Low Margin" Products

Introduce New Products

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Current Value Stream


Box score showing the introduction of new product family -- new machines and additional people are required to support the growth

Current 6 Months 1 Year 18 Months 2 Years 30 Months 3 YearsAdditional Monthly Quantity 0 1 5 10 15 20 30

Units per Person 1.52 1.54 1.63 1.80 1.90 2.16 2.59

On-Time Shipment 100% 100% 100% 100% 100% 100% 100%

Dock-to-Dock Days 6.00 6.00 6.00 5.00 5.00 4.50 4.50

First Time Through 80% 80% 85% 85% 85% 85% 85%

Average Product Cost $3,481 $3,480 $3,278 $2,985 $2,821 $2,497 $2,092

AR Days 42 42 42 42 37 37 37

Productive 29% 33% 38% 34% 36% 41% 50%

Non-Productive 54% 52% 55% 35% 33% 33% 33%

Available Capacity 17% 15% 7% 31% 31% 26% 17%

Revenue $466,670 $472,670 $502,568 $562,461 $630,170 $714,132 $834,172

Material Costs $172,085 $175,385 $178,685 $181,935 $184,686 $187,101 $189,160

Conversion Costs $119,584 $119,584 $119,584 $142,584 $142,584 $152,593 $158,084

Value Stream Gross Profit $175,001 $177,701 $204,299 $237,942 $302,900 $374,438 $486,928

Value Stream ROS 37.50% 37.60% 40.65% 42.30% 48.07% 52.43% 58.37%

Additional People 5 2 1Additional Machines 3 2 1

Material Costs per Unit $3,300 $3,300 $3,250 $2,750 $2,325 $2,150

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Box score showing 3P resultsManual Cell Scenario 2 Scenario 3

Current Technology Scenario 5 Scenario 6

Full Automation

Add No Machines Add 10 Machine Add 23 machines

Sales per Person $37,494 $48,742 $48,742 $52,804 $52,804 $54,835 $55,389

Inventory Turns 26 22 22 20 20 15 12

Average Cost per Unit $30.03 $28.39 $28.39 $28.78 $27.27 $26.77 $27.96

First Time Through % 81% 85% 85% 85% 90% 90% 97%

Lead Time in Days 3.0 3.0 5.0 5.0 7.0 7.0 10.0

Productive 55% 52% 58% 64% 55% 56% 48%

Non-Productive 28% 40% 22% 18% 37% 27% 43%

Available Capacity 17% 8% 20% 18% 8% 17% 9%

Revenue $4,874,230 $4,874,230 $4,874,230 $5,280,416 $5,280,416 $5,483,509 $6,092,788

Material Costs $1,396,840 $1,396,840 $1,396,840 $1,513,243 $1,513,243 $1,571,445 $1,746,050

Conversion Costs $1,649,358 $1,483,416 $1,483,416 $1,649,358 $1,483,416 $1,483,416 $1,799,416

Value Stream Profit $1,828,033 $1,993,975 $1,993,975 $2,117,816 $2,283,757 $2,428,648 $2,547,322

Value Stream Return 38% 41% 41% 40% 43% 44% 42%

40% Hurdle Rate -2% 1% 1% 0% 3% 4% 2%

OPE

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Date post:	26-Mar-2015
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© BMA Inc. 2008. All rights reserved. Lean decision making Box score.

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