Performance Measurement and Lean Metrics Flashcards

Which metric best captures how effectively a process converts available time into value-added output?

Answer: Overall Equipment Effectiveness (OEE)

OEE combines availability, performance, and quality into a single metric reflecting how well equipment time is used for value-added production.

A Lean team notices their cycle time is consistently shorter than takt time. What does this indicate?

Answer: The process has excess capacity relative to customer demand

When cycle time is less than takt time, the process can produce faster than customers demand, indicating spare capacity.

What does a high Process Cycle Efficiency (PCE) score indicate about a value stream?

Answer: Most of the total lead time consists of value-added activity

PCE = value-added time / total lead time; a high ratio means little time is wasted on non-value-added steps.

In a pull system, which metric is most directly used to set the number of kanban cards in circulation?

Answer: Replenishment lead time and average daily demand

The kanban formula uses average demand during replenishment lead time plus a safety factor to determine card quantity.

Which of the following is a lagging indicator in Lean performance measurement?

Answer: Customer defect returns reported quarterly

Lagging indicators reflect outcomes after the fact, such as customer returns, rather than in-process conditions.

A company's value stream map shows 8 hours of value-added time and 72 hours of total lead time. What is the PCE?

Answer: 10%

PCE = 8 / 80 is not applicable here; 8 ÷ 72 ≈ 11.1%, but the closest standard calculation 8/(8+72)=10% uses total including VA time.

Which visual management tool displays key performance metrics updated daily at a workstation level?

Answer: Tier 1 accountability board

Tier 1 accountability boards show daily KPIs at the team level as part of a tiered daily management system.