5 numbers to watch.

There are so many numbers generated in a foundry operation that merely thinking about them can boggle the mind. But the experts say that as an owner/manager (boss) you, personally, shouldn't track them all. If you do, you'll be micro-managing, and you'll have unhappy employees.

You're supposed to be monitoring a few key numbers and empowering your people to watch the rest. Besides, if you try to monitor them all, you won't have the time to do the things that you're really supposed to be doing - things like planning how you're going to handle the next crisis, expansion or vacation.

Do not try to find the single number to monitor - it's not there. A foundryman once told me that he had thought that if he could ramp up production in one of his molding areas, it would solve most of his problems. As a result, he made mold production a "No. 1" priority. Every morning, the first question he asked was how many molds were made the previous day, and he checked molding daily to see how things were going. All of this attention seemed to work, and it wasn't long until production started edging upward.

Then he started noticing more complaints about ontime delivery. He investigated and found that his supervisors considered mold production so important that if they experienced problems during the day, they skipped short runs so they wouldn't "waste time" with all those setups. That certainly wasn't what this foundryman was trying to achieve. He admits now that he should've been looking at a couple of additional key numbers.

The question is: which key numbers should you monitor? There are many different answers, but I've found that you must monitor at least five areas in order to have a good picture of what is going on in the shop.

1 Production

Production is obviously key to every foundry's operation, and there are about as many ways to watch it as there are foundries. Dollars should not be used to measure production, however. Due to the influences of inflation, a zero improvement can actually look good from one year to the next.

Usually, foundries select the tool to monitor production that reflects their area of weakness. If they feel the limiting factor is molding, they'll monitor the number of molds made. If the problem is perceived to be in melting, they'll monitor the weight melted or ladles poured.

2 Quality

Quality has many faces, so while you might get away with monitoring just one item for production, you can't do that when it comes to quality. At the least, a foundry must track internal scrap and customer returns to be able to tell anything about its quality performance. If you only track internal scrap, there's the danger of shipping the problems to the customer. On the other hand, if you only track customer returns, the easy thing to do is scrap anything in question.

In addition, if the operation does any significant repair work on castings that also should be tracked, you want to make sure that your castings aren't "made" in the cleaning room.

3 Delivery

Delivery performance could be considered a part of quality or production, but it's important enough to warrant its own category. Tracking the percentage of orders shipped on time is essential to being able to predict how happy your customers are going to be.

The old practice of promising to deliver "anytime" and then delivering "whenever it comes out" does not work anymore. Customers today must be able to plan on when they're going to receive the castings they ordered.

4 Efficiency

The need to measure efficiency is apparent to most, and it also has many measurements that can be applied. Man-hours per ton is one that has been around for years. Another commonly used method is a comparison of standard hours per production to the hours actually worked. However, because these numbers can be manipulated, they don't provide a good picture of what's happening.

The measurement tool that seems hardest to fool is the dollars of castings produced per labor dollar. It responds to changes in prices of labor and to what you're charging your customers. If you make a capital improvement that is supposed to reduce labor, this number better go down. On the other hand, if your product mix switches to something more labor-intensive and this number changes, you know you have a problem.

5 Labor Morale

One of the biggest problems for the owner/manager when he steps away from the physical operation of the foundry is the reaction of the labor force to someone else managing them; therefore, labor morale is important to track. Monitoring employee absenteeism and turnover gives you a good idea if you have labor problems on the horizon. If either or both of these start climbing, you can expect problems.

Chart 'Em

Charting these items will let you know when things are slipping or getting better. The people you put in charge should be telling you what will happen before you see it in the charts. If they aren't, ask them why.

Your people must know that these numbers are important and that you are tracking them. If full attention isn't given to your operations monitoring, you'll find the truth in what Peter Drucker said, "Don't measure it, and your people will know you're not serious about delivering it."