Assessing shop floor performance can be challenging when dealing with multiple shifts, dispersed teams, and complex production environments. Hence, it is important to build a dedicated Performance Management System.
A well-implemented Performance Management System is a collaborative framework to track, analyze, and improve operations at the line, team, and site level. It helps manufacturers define performance expectations, set shared goals, gather real-time data, and surface actionable feedback. Done right, it becomes the most reliable way for plant managers to track and ultimately boost shop floor performance.
This article talks about the system’s benefits and the best way to build a Performance Management System for your organization.
Why Manufacturers Need a Performance Management System
Manufacturers in the United States employ over 13 million people across 240,000 establishments according to the National Association of Manufacturers. That’s a vast operational ecosystem that becomes even more challenging to manage across multiple shifts, sites, and teams. In such environments, a well-structured Performance Management System isn’t just a luxury. It’s a necessity.
Running an efficient performance management system is beneficial for manufacturers seeking to increase visibility, control, and consistency across multiple shop floors.
From a plant manager’s point of view, it improves visibility and provides better shop floor control. This makes it easier to identify bottlenecks, safety issues, or recurring problems in specific processes or lines. The system also helps supervisors identify problem areas and gaps in training programs.
Managers can use this information to design and deliver targeted support at the site or team level. In turn, this promotes engagement and operational excellence across sites.
For shop floor teams, performance management systems create shared visibility into goals and progress. This helps align daily work with the organization’s broader objectives and fosters collaboration between different locations or shifts. It also ensures they have access to feedback that helps improve performance and nurtures a more engaged workforce.
6 Steps to Build a Performance Management System
A good Performance Management System is a continuous, sustainable process with information flowing both ways between operational teams and leadership. Hence, irregular or unstructured reviews and appraisals are often inadequate.
Here’s what you need to do to build an effective Performance Management System.
1. Define Clear Shop Floor KPIs Aligned with Strategic Goals
You can only improve those efforts that you can measure. Hence, the first step in building a Performance Management System is to define your Key Performance Indicators (KPIs) and align them with the organization’s culture and long-term performance management goals.
Ideally, you should establish Specific, Measurable, Achievable, Relevant, and Time-bound (SMART) goals for individual employees and the organization as a whole. This gives managers clear, measurable objectives to work towards and helps keep employees on the path to progress.
Some of the most commonly used KPIs in the manufacturing industry include:
- Production quality
- First pass yield
- Scrap analysis
- Time from order to delivery
- Days without accidents
You will also need to define when and how the KPIs are measured and establish a rating scale.
2. Establish a Daily Management System for Tracking and Accountability
Setting up a daily management system within the factory’s performance management system fosters accountability, provides real-time performance visibility, and drives continuous improvement.
Typically, it encompasses all activities for operational control and process improvement across the factory floor and management tiers. This may include check-ins or audits and inspections for compliance, product quality, and safety measures, and as well as regularly scheduled meetings to communicate pain points and determine problem-solving measures.
For example, team leaders and front-line operators may meet every morning or at the beginning of a shift to set daily goals and discuss progress. At the next management level, department managers may meet every evening to address issues raised by team leaders and share updates.
Finally, the top-level management may meet once a week to make strategic decisions based on updates from managers and review progress towards overall organizational goals.
3. Use Visual Management to Make Performance Transparent
Visual management involves using graphic cues such as tables, charts, graphs, etc., to communicate information in an easy-to-understand manner. Having the day’s targets, progress towards these targets, and other KPIs graphically displayed has many benefits. This includes making it easier for teams to assess workflow status, communicate problems and ideas, identify areas for improvement, and maintain quality and safety standards.
Common examples of visual management tools for a Performance Management System include:
- Signage
This includes labels, badges, shop floor signs, etc., that guide/ inform/ warn workers on how to interact with the immediate work environment.
- Kanban Boards
These boards reflect the flow of a task from one stage of production to the next.
- Andon Systems
Andon systems are visual or audible systems used to signal equipment failures, quality defects, and other such problems in real time.
- Value Stream Maps
These visual management tools map the value added to a product at every stage of production to identify areas for improvement and waste reduction.
- Gantt Charts
These charts offer an overview of the project along with a list of activities in the order they are to be completed.
4. Create Real-Time Feedback Loops with Gemba Walks
Implementing real-time positive and negative feedback loops goes a long way toward guiding shop floor performance. Gemba walks are the easiest way to achieve this. This refers to having managers observe activities as they occur on the work floor while actively engaging with employees to understand their challenges and discuss improvements.
5. Implement Continuous Improvement with the PDCA Cycle
Having collected data, you must next use it to improve processes. The Plan, Do, Check, Act (PDCA) cycle is an iterative approach that involves systematically testing potential solutions, assessing results, and implementing successful ideas. Typically, ideas are tested on a small pilot project and then rolled out across the shop floor.
Implementing such a strategy fosters a culture of continuous improvement and encourages workers to think like problem solvers. This goes a step further towards keeping the workforce engaged and motivated to do their best.
6. Leverage Technology for Smarter Shop Floor Control
Evaluating shop floor performance and growth for a large organization can be slow and inefficient. This is where technology can help. Look for performance management software to streamline your efforts and other technological solutions to support your performance management system.
For example, digital checklists connected to a dashboard make it easy for managers on Gemba walks to collect and analyze information. Digital solutions like those offered by fabriq allow employees to raise tickets smoothly during their Gemba Walk. Similarly, you can integrate Andon Lights with digital visual management solutions for better visibility.
You can also set up and customize visual dashboards for manufacturing units. These may be used to display real-time progress towards daily targets and overall organizational goals, as well as performance metrics. Using technology for this type of information sharing improves communication and makes sure all stakeholders involved in daily huddles and performance meetings are on the same page.
Start Building Your Performance Management System
Implementing an effective, technology-driven Performance Management System helps factory managers maintain better shop floor control and keeps the workforce engaged and moving in the right direction.
Digital visual management boards, like fabriq, play a key role in keeping key stakeholders engaged. They enhance transparency in performance and drive continuous improvement. Irrespective of what you may be manufacturing, they make the Performance Management System easier to run and more dynamic.
Ready to take control of your factory’s performance? Reach out to learn how fabriq can help you boost visibility, accountability, and continuous improvement across your organization.
