Rapid Plant Assessment

Plant Address :
Rated By : RPA Lean
Rating Sheet
Tour Date : Table - I

Ratings

Excellent (9)
S.

Average (5)
Related Questions in

Above (7)
Below (3)
No RPA Questionnaire

Poor (1)

Average

Average
Categories

1 Customer Satisfaction 1, 2, 20

2 Safety, Environment, Cleanliness, & Order 3-5, 20

3 Visual Management Deployment/Systems 2, 4, 6-10, 20

4 Scheduling System 11, 20

Product Flow, Space use & Material Movement

5 7, 12, 13, 20
Means

6 Inventory Level & Work in Progress 7, 11, 20

7 People Teamwork, Skill Level, & Motivation 6, 9, 14, 15, 20

Equipment & Tool condition and their

8 16, 20
Maintenance Process

9 Ability to Manage Complexity & Variability 8, 17, 20

10 Supply Chain Integration 18, 20

11 Commitment to Quality 15, 17, 19, 20

Total Score for 11 Categories (Max =

ant Assessment
Plant Address :

Ratings

Best in Class

Category
Score
(11)
0

Total Score for 11 Categories (Max = 121) 0

 Rapid Plant Assessment
Rated By : Plant Address :
RPA Questionnaire
Tour Date : Table - II

Questions should be answered YES only if the plant adheres to the principle implied by the question. In case of doubt,
S.no Question

1 Are visitors welcomed and given information about plant layout, workforce, customers & products?

2 Are ratings for customer satisfaction and product quality displayed?

3 Is the facility safe, clean, orderly, and well lit? Is the air quality good and are noise levels low?

4 Does a visual labeling system identify and locate inventory, tools, processes, and flow?

5 Does everything have its own place, and is everything stored in its place?

6 Are up-to-date operational goals and performance measures for those goals prominently posted?

7 Are production materials brought to and stored at line side rather than in separate inventory storage areas?

8 Are work instructions and product quality specifications visible at all work areas?

9 Are updated charts on productivity, quality, safety, and problem solving visible for all teams?

10 Can the current state of the operation be viewed from a central control room, on a status board, or on a Computer

11 Are production lines scheduled off a single pacing process with appropriate inventory levels at each stage?

12 Is material moved only once as short a distance as possible and in appropriate containers?

13 Is the plant laid out in continuous product flow lines rather than in "shops"?

14 Are work teams trained, empowered, and involved in problem solving and ongoing improvements?

15 Do employees appear committed to continuous improvement?

16 Is a timetable posted for equipment preventive maintenance and continuous improvement of tools and processes?

17 Is there an effective project management process, with cost and timing goals, for new product start-ups?

18 Is a supplier certification process - with measures for quality, delivery, and cost performance - displayed?

19 Have key product characteristics been identified and are fail-safe methods used to forestall propagation of defects

20 Would you buy the products this operation produces?

Total Numbe
 Plant Assessment
Plant Address :

eres to the principle implied by the question. In case of doubt, answer NO.
stion Yes No

out, workforce, customers & products?

layed?

y good and are noise levels low?

ools, processes, and flow?

in its place?

or those goals prominently posted?

her than in separate inventory storage areas?

le at all work areas?

m solving visible for all teams?

l control room, on a status board, or on a Computer Display?

th appropriate inventory levels at each stage?

d in appropriate containers?

an in "shops"?

m solving and ongoing improvements?

nd continuous improvement of tools and processes?

nd timing goals, for new product start-ups?

delivery, and cost performance - displayed?

afe methods used to forestall propagation of defects?

Total Number of Yeses
 Rapid Plant Assessment
Rated By : RPA Plant Address :
Tour Data
Tour Date : Table - III
S.no Measure Metric
1 Sales Volume Yearly Customer Sales in Rupees
2 Unit Production Number of Yearly Production Units
3 Production Employees Number of Hourly Employees
4 Average Wage Rate Re. per Hour
5 Fringe Benefits % of Wage Rate
6 Salaried Employees Number of Employees
7 Average Salary Yearly Base Pay Plus Fringes
8 Total Employees Total Production & Salary People
9 Employee Turnover % Employees that Leave each Year
10 Direct/Indirect Ratio Ratio of Direct Labor to Indirect Labor
11 Overhead Rate Direct Labor Rate Multiplier
12 Workforce Grievances Number outstanding for union workforce
13 Average Overtime % Overtime by Employees over Year
14 Direct Material Cost Actual Rupees or COS%
15 Average Working Capital Inventory + Acc Receivable - Acc Payable
16 Order Fulfillment % of Orders delivered on Time
17 PP&E Re. Book Value of Property, Plant & Equipment
18 Equipment State Old Technology or Up-to-Date
19 Equipment Condition No. of Faults Detected in a year
20 Plant Size Square Footage
21 Product Complexity Number of Different Product Families
22 Process Complexity Number of Different Process Types
23 Operations Type Job Shop, Line Flow, Batch, Assembly
24 Operations Mix What Mix of Operations Types?
25 Daily Demand Variability Short Term Variability-Peak to Average
26 Yearly Demand Variability Seasonal Variability-Peak to Average
27 Equipment Utilization Average Equipment utilization
28 Finished Goods Inventory Rupee Value or units of finished goods
29 WIP Inventory Raw Material & WIP Inventory Levels
30 Bottleneck process? What is the Operations Bottleneck?
31 Theoretical Flow Time Theoretical time to Produce Products
32 Actual Flow Time Actual time to Produce Products
33 Environmental Issues Noise, Air, Effluents, etc.
34 Safety Record Incidents per employee per year
d Plant Assessment
nt Address :

Data
 Rapid Plant Assessment
Plant Address :
Rated By : RPA Holistic
Cost of Sales (RPA
Tour Date : Cut) Table - IV

Measure Annual Rupees Measure % of Sales Measure % of COS

Sales

Cost of Sales (COS)

Direct Material Cost

Total People Cost

Property Plant & Equipment Cost

Other Cost

Gross Margin

PP&E Investment Average Yearly in Rupees

Facility yearly cost Average Yearly in Rupees

Working Capital Investment Average Yearly in Rupees

Net Assets Employed Average Yearly in Rupees

Shop Rate Rupees/Hour

 COS computed for the RPA cut. It groups costs into categories of material, p
PP&E, and other.

of COS Data

Net sales to the customer less all returns, discounts, etc.

All plant costs including material, people with fringes, fixed and variable pla
MRO, etc.

Cost of materials in the net sales above at standard, budgeted costs including
freight in and and contracted for freight out. Does not include scrap, rework
internal plant labor or staff costs.

Includes all people wages, salaries, fringes, and budgeted overtime. Includes
budgeted training & T&E costs.

Includes all plant & equipment fixed costs (depreciation, taxes, insurance, etc
and other variable costs, preventative maintenance, environmental control co
budgeted amounts

Includes all other plant costs including warranty, scrap & rework costs, etc. I
"plug" number so that this RPA cut of COS equals the COS computed vai the
traditional way. "Other" is a measure of leanness; the lower it is as a % of CO
leaner the plant

Difference between Sales & COS

Service operations may have high lease costs that skew the PP&E costs

Inventory, Account Receivable less accounts receivable

Total net assets

Shop rate is the direct labor hourly rate plus the overhead rate in Re. or DL*(
puted for the RPA cut. It groups costs into categories of material, people,
d other.

o the customer less all returns, discounts, etc.

costs including material, people with fringes, fixed and variable plant costs,
.

aterials in the net sales above at standard, budgeted costs including budged
and and contracted for freight out. Does not include scrap, rework or
ant labor or staff costs.

ll people wages, salaries, fringes, and budgeted overtime. Includes

training & T&E costs.

ll plant & equipment fixed costs (depreciation, taxes, insurance, etc.), utility
variable costs, preventative maintenance, environmental control costs at
amounts

ll other plant costs including warranty, scrap & rework costs, etc. It is a
mber so that this RPA cut of COS equals the COS computed vai the
way. "Other" is a measure of leanness; the lower it is as a % of COS, the
plant

e between Sales & COS

perations may have high lease costs that skew the PP&E costs

Account Receivable less accounts receivable

assets

is the direct labor hourly rate plus the overhead rate in Re. or DL*(1+OH)
 Rapid Plant Assessment
Plant Address :
Rated By : RPA Cost of
Sales Table -
Tour Date : V
S.No. Plant Data Value
1 Yearly Sales (Re.) 100,000,000
2 Gross Margin % 0.15
3 Total production workers 350
4 Indirect workers (in above) 110
5 Salaried staff 55
6 Standard Hours/yr 1,800
7 Average Direct Labor Rate (Re.) 15
8 Average Indirect Labor Rate (Re.) 17
9 Average Hourly Overtime % 0.10
10 Fringe % 0.42
11 Average Salary (Re.) 50,000
12 Salaried Fringes (%) 0.3
13 Salaried Overtime (%) 0.1
14 Material % of COS 0.56
15 Freight in % of Material 0.04
16 Scrap & Rework in Material (%) 0.03
17 Plant Size Sq Ft 150,000
18 Plant fixed cost Re/Sq ft 5
19 Plant variable cost Re/Sq ft 4.5
20 Equipment fixed cost 4,000,000
21 Equipment variable cost 750,000
22 PP&E 6,175,000
23 Manufacturing O/H rate (%) 3
24 Salaried O/H rate (%) 0.6
25 Corporate allocation %/sales 0.02
S.No. Tour Data Rupee Value
1 Table 1 Rating 55
2 Table 2 Rating 5
S.No. COS RPA CUT RPA COS
1 Yearly Sales 100,000,000
2 Direct Materials and Freight In 48,018,880
3 Production People Costs 15,379,452
4 Salaried People Costs 3,932,500
5 Total People Costs 19,311,952
6 PP&E 6,175,000
7 Other 9,494,168
8 Corporate Allocation 2,000,000
9 COS 85,000,000
10 Gross Profit 15,000,000
 11 Gross Margin 0.15
12 Sales per Employee 246,914
S.No. Traditional COS Computation Value
1 Sales 100,000,000
2 Material % of COS 49,504,000
3 Direct Labor 7,128,000
4 Manufacturing Overhead 21,384,000
5 Salaried Overhead 4,840,000
6 Corporate allocation 2,000,000
7 Cost of Sales 85,000,000
 Derived from Tour
Estimates from Table 3
Computed from Table itself

Given or can be Estimated Easily

Estimated from Table 3
Estimated from Table 3
Estimated by Equipment Person on Tour
Estimated by Equipment Person on Tour
Sum of equipment fixed & variable costs plus plant fixed and variable costs

Rating By Tour Group

Rating By Tour Group
% COS

56.5 Computed by material COS% times COS minus scrap plus freight in
18.1 Computed from production workers minus indirects times wage rate + indirect work
4.6 Number of salaried people times average salary times 1+fringes times 1+overtime
22.7 Addition of salaried and production people costs
Sum of plant fixed and variable cost per sq ft times plant size + equipment fixed and
7.3
costs
11.2 Remainder after all other costs are computed to total COS. If COS not know, estima
2.4 Computed as percent of Sales
100.0 Either given because gross margin is given and sales known or computed from all c
% COS

Adding inbound freight to Material %--a judgment call as to whether freigth is in ov

58.24
or material--ask the accountant.
8.4 Direct production workers times hours per year times direct labor rate times 1+overt
25.2 Direct labor $ above times overhead rate.
5.7 Annual salary times 1+salaried overhead rate times salaried overtime
2.4
100
e costs

+ indirect workers times their wage rate all times hours/year times 1+fringe times 1+overtime
s 1+overtime

pment fixed and variable

ot know, estimate other from the plant rating of 55 as 10-15% of COS.

uted from all costs estimating other as 15% of COS

freigth is in overhead
e times 1+overtime %
 Rapid Plant Assessment Rating - Table 1
Rating Considerations - Chart 1
S.No. Measure Factors
Customer ratings, quality certifications & ratings, warranty & product liability costs,
1 Customer Satisfaction of external and internal customer requirements, visitor materials & welcome, market
product introduction & acceptance.

Safety & environment record, place for everything & everything in its place, cleanline
Safety, Environment, exterior & interior, floors, equipment, spills, leaks, noise, lighting, paint, dust, air qua
2
Cleanliness & Order restroom conditions, desks & workbench order & cleanliness, degree of "spiffing" for
inventory order, material flow order & cleanliness, color & other coding for safety &

Operations mission & performance objectives visible; visibility of labeling & coding
inventory, equipment, & tooling; color coding & differentiation ; visibility of custome
Visual Management ratings; visibility of charts tracking operation's & teams' safety, quality, & productivit
3
Deployment showing status of total operation, customer order & order fulfillment visibility, Kanba
inventory count can be made visually, machines & tool labeling--costs, preventive ma
product displays, audit results visible.

Degree of scheduling to customer order, order process efficiency, product line schedu
scheduling buckets (each order, hourly, daily, weekly, or monthly), supplier schedulin
4 Scheduling System
replenishment versus order fulfillment, computer scheduling versus kanban, pull vers
time efficiencies, backroom costs of scheduling, MRP costs, data entry costs

Product line versus shop layout, rolling carts pulled by tractors or by hand or conveye
Product & Material Flows travel distances between processes, material movement responsibility--process owned
5
and Space Use staff, container size (forklift requirement?), containers designed for parts families, sin
docks to minimize material travel, space utilization, goals for space use reduction

WIP levels at each process, WIP in transit in plant, separate stores versus line side sto
inventory storage areas, finished product levels, total inventory to sales ratio, process
6 Inventory & WIP Levels
time ratios, countability of inventory, WIP movemend triggered by computer, materia
process, theoretical versus actual flow times

Team problem solving capability & history, employee willingness to talk about custom
company; uniformity of dress; communications & recognition environment; sales per
People Teamwork, Skill meeting areas & performance charts; training investments, educational support, benef
7
Level, & Motivation unionization activity, workforce-management relationship, community support, comp
activities (picnics, open houses, sports teams, local involvement, employee knowledg
customers & business, work instructions standards

Preventive maintenance system, setup change times, integrated go-no go quality chec
performance data availability, knowledge & utilization of bottleneck processes, proce
Equipment & Tooling State
8 total asset utilization, operator routine maintenance, maintenance staff & teams, MRO
& Maintenance
efficiency, tool & fixture orderliness, cleanliness, & storage location, equipment impr
equipment technology strategy
 Use of common parts, processes, & procedures prototype process, paper transactions
keyboard entries versus bar coding, backroom paperwork & computer transactions co
collected with data needed, simplicity & clarity of operations layout, indirect to direct
Ability to Manage
9 staff to total workforce ratio, overhead cost ratios, commonality of tooling & fixturing
Complexity & Variability
equipment & tools, commonality of support software & applications programs across
among sister plants, equipment efficiencies, ability to handle variable demand, ability
controllable variations, ability to smooth demand, ability to handle supply chain, num

Number of suppliers, supplier release system--from inventory levels or customer orde

certification, sourcing policies--short-term or long-term, supplier quality ratings, deliv
10 Supply Chain Integration objectives & history, new product development responsibility, responsibility for kittin
replenishment efficiency, supplier material scrap & rework, supplier cost-saving ideas
supplier knowledge of lean

Quality certification, quality process & measurement at each process & for each prod
problem solving process, product & customer quality data, quality ratings, new produ
11 Quality System Deployment continuous improvement environment, degree of focus on customer satisfaction , imp
practices, degree operational strategies are linked to corporate strategy, total quality s
& deployed
 iderations - Chart 1
Factors
fications & ratings, warranty & product liability costs, employee knowledge
mer requirements, visitor materials & welcome, market share, rate of new
ance.

place for everything & everything in its place, cleanliness of operations--

ipment, spills, leaks, noise, lighting, paint, dust, air quality, employee dress,
workbench order & cleanliness, degree of "spiffing" for visitors (negative),
order & cleanliness, color & other coding for safety & order.

mance objectives visible; visibility of labeling & coding of product lines,

ng; color coding & differentiation ; visibility of customer identification &
cking operation's & teams' safety, quality, & productivity, control room
on, customer order & order fulfillment visibility, Kanban deployment,
visually, machines & tool labeling--costs, preventive maintenance visibility,
visible.

mer order, order process efficiency, product line scheduling at single point,
r, hourly, daily, weekly, or monthly), supplier scheduling & delivery,
fillment, computer scheduling versus kanban, pull versus push systems, flow
osts of scheduling, MRP costs, data entry costs

ut, rolling carts pulled by tractors or by hand or conveyers versus forklifts,

esses, material movement responsibility--process owned or separate material
equirement?), containers designed for parts families, single versus multiple
vel, space utilization, goals for space use reduction

IP in transit in plant, separate stores versus line side storage, number of

ed product levels, total inventory to sales ratio, process cycle time to flow
entory, WIP movemend triggered by computer, material department or next
ual flow times

ity & history, employee willingness to talk about customers, products, &
communications & recognition environment; sales per employee; team
charts; training investments, educational support, benefit package & costs,
ce-management relationship, community support, company-supported
s, sports teams, local involvement, employee knowledge of & support of
nstructions standards

m, setup change times, integrated go-no go quality checks, machine

knowledge & utilization of bottleneck processes, process control capability,
routine maintenance, maintenance staff & teams, MRO replenishment
rliness, cleanliness, & storage location, equipment improvement policy,
y
 es, & procedures prototype process, paper transactions required on floor,
ding, backroom paperwork & computer transactions costs, matching of data
mplicity & clarity of operations layout, indirect to direct labor ratio, support
overhead cost ratios, commonality of tooling & fixturing, commonality of
ity of support software & applications programs across the operation &
t efficiencies, ability to handle variable demand, ability to eliminate
to smooth demand, ability to handle supply chain, number of suppliers

release system--from inventory levels or customer order, supplier

--short-term or long-term, supplier quality ratings, delivery, & productivity
duct development responsibility, responsibility for kitting parts, C-stock
lier material scrap & rework, supplier cost-saving ideas implemented,

rocess & measurement at each process & for each product, scrap & rework,
uct & customer quality data, quality ratings, new product startup process,
ronment, degree of focus on customer satisfaction , implementation of best
trategies are linked to corporate strategy, total quality system well-developed
Rapid Plant Assessment Rating - Table 1
Typical Operations Measure - Chart 2
S.No. Variable Low Side High Side
1 Yearly Sales per Employee - Manufacturing
2 Yearly Sales per Employee - Assembly
3 Production Hourly Wage Rate - Manufacturing
4 Production Hourly Wage Rate - Assembly
5 Hourly Wage Rate - Retail

6 Production hours per year (less vacation & holidays; see Note 2)

Fringe - Employee & Medicare Taxes (Employee portion only -1/2 of

7
total)
8 Fringe - Medical for Family per Year
9 Fringe - Workmen's Comp per year - Production Employee
10 Fringe - Insurance, AD&D, other per year % of Hourly Wage Rate
11 Fringe - Vacation, Holiday, Sick Leave/Production Employee - Days/Year
12 Fringe - For Hourly Employees - % of Yearly Base Pay
13 Annual average salary for plant employees
14 Fringe - For Salaried Employees - % of Yearly Base Pay
15 Plant Fixed Costs per sq ft per year
16 Plant Variable Costs per sq ft per year
17 Yearly Equipment Fixed Costs - % of COS - Heavy Manufacturing
18 Yearly Equipment Fixed Costs - % of COS - Assembly
19 Yearly Equipment Variable Costs - % of COS
20 Sales per sq ft per year - Manufacturing
21 Sales per sq ft per year - Assembly
22 Gross Margin - Manufacturing
23 Gross Margin - Assembly
24 Material % of COS - Manufacturing
25 Material % of COS - Assembly
26 Manufacturing Overhead Rates - % of Direct Labor Hourly Cost
27 Salaried Overhead Rates - % of Direct Yearly Salary
28 Corporate Allocations - Percent of Sales
29 "Other" Plant Costs % of COS - Manufacturing (See Note 3)
30 "Other" Plant Costs % of COS - Assembly
31 Working Capital to Sales
32 Inventory to Sales
33 Accounts Receivable - Days Outstanding
34 Account Payable - Days Outstanding
35 Inventory Turns per year - Assembly
36 Inventory Turns per year - Heavy Manufacturing
37 Hours to assembly an automobile
38 Hours to assembly a typical seat set for an automobile.
 39 Hours to assembly a PC.
40 Hours to manufacture a Heavy-Duty Truck
41 Typical Manufacturing Overhead Variances
42 Property, Plant & Equipment Investment to Yearly Sales
43 Equipment Depreciation - Years
44 Indirect to Direct Labor Ratio
45 Salary to Production Worker Ratio
Notes: 1. Data from instructor's experience, 2. 2080 hrs/yr., 3. "other" costs refer to RPA cut
ons Measure - Chart 2
Nominal
r" costs refer to RPA cut