© 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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Em

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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%

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

Documents

box score slide

decisionmaking slide

growth slide

sales slide

better decisions slide

problem value stream

new equipment

new products