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Productivity Measurement_Analysis and Improvement

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					          The American University in Cairo (AUC)
                 Engineering Services




    Productivity Measurement, Analysis and
                 Improvement



Instructors:
     Dr. Adel El Shabrawy          Dr. Attia H. Gomaa
     Industrial Eng. Dept. -   Head of Industrial Eng. Dept. -
   High Technology Institute        Fayoum University
                                 attiagomaa@yahoo.com




                               April 2006
                        AUC- Engineering Services


    Productivity Measurement, Analysis and
                 Improvement

Authors:
    Dr. Adel El Shabrawy           Dr. Attia H. Gomaa
    Industrial Eng. Dept. -    Head of Industrial Eng. Dept. -
   High Technology Institute        Fayoum University
                                 attiagomaa@yahoo.com

Who Should Attend:
  Managers and senior staff members in public and private sector
  companies.

Objectives:
  • To define concepts, methods, and indicators of performance
    evaluation.
  • To develop the participants capabilities in measuring and
    analyzing performance indicators in different areas.
  • To raise the skills of participants in planning, implementing and
    following-up performance improvement programs.

Course Outline:
    • Definition and nature of performance evaluation & productivity.
    • Performance evaluation & productivity methods.
    • Productivity analysis
    • Technical indicators.
    • Economic and financial indicators.
    • Analysis of performance indicators.
    • Performance & productivity improvement techniques.
    • Planning and following-up of performance
    • Project risk management
    • Case studies.


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

    Productivity Measurement, Analysis and
                 Improvement
CONTENTS:
INTRODUCTION
1. Productivity concept
2. Production & productivity
3. Origin of the word “ productivity ”
4. Production systems & resources
5. Management & control & productivity
6. Productivity analysis
7. Productivity & effectiveness & efficiency
8. Types of productivity
9. Productivity terms
10. Benefits of higher productivity
11. Benefits of higher productivity measurement
12. Measurement of production
13. Productivity measurement units
14. Labor productivity measurement
15. Material productivity measurement
16. Machine productivity measurement
17. Energy productivity measurement
18. Productivity & financial indicators
19. Project risk analysis
20. Productivity levels
21. Overall productivity analysis
22. P. indicators for production activities
23. Performance evaluation sheet for production activities
24. Productivity improvement techniques
25. Productivity improvement cycle
26. Real case studies


Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
INTRODUCTION


This course is mainly concerned with the problems of productivity
analysis in industry, especially manufacturing industries.


This course systematically presents several conceptual and pragmatic
methodologies, tools, and techniques for the productivity cycle.


This course attempts to serve the practical needs of industrial engineers,
productivity directors/coordinators, productivity managers, corporate
planners, and administrators.


This course is written in a relatively simple, easy-to-understand style,
making it suitable for industrial engineers and practitioners. About 20
references and about 15 worked examples further help the reader
understand the topics.


Finally, I’m very grateful to my readers, participants & professional peers
for joining us in this course.


                                             Dr. Attia H. Gomaa




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
1. PRODUCTIVITY CONCEPT


                    What is the productivity?

Productivity is a measure of the following:
  • System performance
  • System efficiency
  • Resource utilization
  • The relationship between real output and inputs.


Productivity is measured as:
  • The ratio of output to input.
  • The ratio between the amount produced and the amount
     of any resources used in the production.
  • Output per unit of input (resources)


                      Waste

   Input                                            Output



                  Productivity = Output / Input


Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
2. PRODUCTION & PRODUCTIVITY


The term “Productivity” is often confused with the term “Production”.
Many people think that the greater the production, the greater the
productivity. That is not necessary true.



  • Production is concerned with the activity of producing goods
     and/or services.


                    Production ……....            Quantity


  • Productivity is concerned with the efficient utilization of
     resources (inputs) in producing goods and/or services (output).


             Productivity ………            Resource utilization


If viewed in quantitative terms, production is the quantity of output
produced, while productivity is the ratio of the output produced to the
input(s) used.


In short, higher productivity means that more is produced with the same
expenditure of resources, i.e. at the same cost in terms of land, materials,



Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
machine time or labor; or alternatively that the same amount is produced at
less cost in terms of land, materials, machine time or labor used up, thus
releasing some of these resources for the production of other things.


3. ORIGIN OF THE WORD “ PRODUCTIVITY ”


  • Quesnay, 1766, the word “productivity” appears for the first time.


  • Littre, 1883, “faculty to produce”.


  • Early 1900s, “Relationship between output and the means employed
     to produce this output”.


  • OEEC, 1950, the Organization for European Economic Cooperation:
     “Quotient obtained by dividing output by one of the factors of
     production”


  • Davis, 1955, “Change in product obtained for the resources
     expended”.


  • Fabricant, 1962, “Always a ratio of output to input”.


  • Kendric & Creamer, 1965, Functional definitions for partial, total-


Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
     factor and total productivity.


  • Siegel, 1976, A family of ratios of output to input.


  • Sumanth, 1979, Total productivity: the ratio of tangible output to
     tangible input.


4- PRODUCTION SYSTEM & RESOURCES


Production is a process of transforming input(s) to output(s).


                          Production process


    Input                                                  Output




A system is a collection of components (or items) that work together to
achieve a certain objective.


Production system is a configuration of resources combined for the
provision of goods or services.




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services


              Planning and Control Cycle

                                       Update
                                 •   Scope
  5) Actions:
                                 •   Requirements 1) Policy
  • Proactive
                                 •   Targets
  • Preventive
                                 •   Constraints
  • Corrective
                                 •   WBS          2) Master
                                                       Plan
                                PM
 4) KPI

                                                     3) Action
                  DM     RM     CM     PM     SM       Plans
 3) P.E.

                  Operational management             4) Detailed
 2) Follow-up                                           Plans
                                                 5) Work Orders
           1) Feedback

              Review            Site




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

                               Constraints



   • Target                                     Products/
   • Information                Processes        Services
   • Resources


                                 Control




                   - Technical constraints
                   - Financial constraints


  - Targets                   Production       - Products /
  - Information                processes          Services
  - Resources                                  - Reports

                          Production
                         performance
                          indicators



This enables us to optimize the resources for maximizing the output of
a production system.


Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services


Two basic targets for any production system:
   • Provision of customer service
   • Resource productivity



The productivity of a certain set of resources (input) is therefore the
amount of goods or services (output) which is produced from them. What
are the resources at disposal of a manufacturing company?’ They are:
      1- Materials
      2- Machines
      3- Manpower
      4- Method & Technology
      5- Land and building
      6- Money
      7- Market
      8- Management Tools
      9- Information


Land in a convenient location on which to erect the buildings and other
facilities necessary for the operations of the enterprise, and the buildings
erected on it.


Materials that can be converted into products to be sold. They include fuel,

Global PE – Dr. Attia Gomaa
                             AUC- Engineering Services
chemicals for use in the processes of manufacture, and packing materials.


Machines, plant, equipment and tools necessary to carry out operations of
manufacture and the handling and transport of materials; heating,
ventilating and power plant; office equipment and furniture.


Manpower (men and women) necessary to perform the manufacturing
operations; to plan and control; to do clerical work; to design and to
research; to buy and sell.


The use which is made of all these resources combined determines the
productivity of the enterprise. The resources consist of “real” things and
services. When they are used up in the process of production, “real” costs
are therefore incurred. Their cost may also be measured in terms of money.


Since higher productivity means more output from the same resources, it
also means lower money costs and higher net money returns per unit of
output.


The relative importance of each of the resources mentioned above varies
according to the nature of the enterprise, the country in which it is
operating, the availability and cost of each type of resource and the type of
product and process.



Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
5. MANAGEMENT & CONTROL & PRODUCTIVITY


 Who is responsible for making sure that the best use is made of
                         all these resources?


Who is responsible for seeing that they are combined in such as
            way as to achieve the greatest productivity?


Answer:              The management of the project.


               What is the project management?
Project Management is a powerful systematic methodology to
achieve a certain target and to improve the resource
productivity. Through:
     (1) Define the target & scope & constraints
     (2) Information collecting & analysis
     (3) Planning & target plans
     (4) Organization
     (5) Motivation & Direction
     (6) Implementation
     (7) Control


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
     (8) Corrective Actions
     (9) Learned lessons
     (10) Closed out report

Project Management is the application of knowledge, tools and
scientific techniques to project activities in order to meet or
exceed the system needs and expectations from the project.

Project Targets Dimensions:

  • Time wise                 Right time or less
  • Cost wise                 Right cost or less
  • Quality wise              Right quality or more
  • Quantity wise             Right quantity or more
  • Resource wise             Right resources or less
  • Safety wise               Right safety or more

     What are the main TARGETS In Production Systems?


- Maximization Targets:
     • Cost Wise:             Profit, Value added
     • Quantity Wise:         Production volume


Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
      • Material Wise:          Mat. utilization
      • Manpower Wise:          Worker utilization
      • Machines Wise:          M/c. utilization
      • Quality Wise:           Yield
      • Time Wise:              Availability


- Minimization Targets:
      • Cost Wise:              Cost elements
      • Quantity Wise:          WIP
      • Material Wise:          Mat. scrap
      • Manpower Wise:          Unused capacity
      • Machines Wise:          Unused capacity
      • Quality Wise:           Rejected
      • Time Wise:              Downtime

Project Planning:
  •   What is to be achieved?         "Project description"
  •   Why?                            "Target"
  •   How?                            "Method"
  •   Who?                            "Resources"
  •   When?                           "Schedule"
  •   Where?                          "Location"


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
Project Time Plans:
  • Long term             2 to 10 y     Risk 15 to 25%
  • Medium term           6m to 1 y     Risk 7 to 10%
  • Short term            1w to 3 m     Risk 3 to 5%


Project Level Plans:
  • Master plan Top management (10 -15 activity)
  • Action plan Control management (50-100)
  • Detailed plan Operational manag. (more than 500)


Project Risk Plans:
  • Target plan (normal or most likely)
  • Optimistic plan
  • Pessimistic plan


Project Strategic Plans:
  • Strategic plan
  • Tactical plan
  • Operational plan
  • Urgent plan

Project Information:
  • Complete information           "Overall planning"
  • Incomplete information         "Partial planning"
  • Without information            "Trial & error"



Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
Project data:
  • Certain data                   "Deterministic"
  • Uncertain data                 "Probabilistic"

Managing Project Budget:
 • Look at history of similar projects
 • Determine internal resources
 • Determine external resources


Budget Calculation:
  • Direct cost (materials, labor, equipment)
  • Indirect cost (overhead)
  • Total cost = direct cost + indirect cost


Project risk areas:
  • Data accuracy
  • Work contents
  • Schedule
  • Resources
  • Finance


Project Planning Approaches:
  • CPM (Critical Path Method)
  • PERT (Program Evaluation & Review Technique)
  • GERT (Graphical Evaluation & Review Technique)


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
  • Simulation
  • Resource smoothing (time constraints)
  • Resource leveling (non-time constraints)
  • Duration compression (time crashing)
  • Project management software (Primavera, Microsoft Project,
     .. etc.)

       Parameter                 Project Planning Approaches
                               CPM          PERT         GERT
   Duration                   Certain      Uncertain    Uncertain
   Logic diagram              Certain       Certain     Uncertain



 Project Planning & Control
  Planning                       Control
   WBS                            Productivity Analysis

     Master Plan                   Performance Evaluation
      Action Plan                    Follow-up




Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services


Project Planning & Control Steps:


               Targets      Constraints   Resources


                                     Information


                                    Long-run Plans


                                   Annual run Plans


                                    Short run Plans


                                  Management Action


               Control              Implementation




   Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services

Total Project Control:

      Quality                                  Quantity


                 Under HSE Conditions


     Cost                                            Time
                         Resources


Total Control Indicators:
  1- Work quantity control
        • Over estimation
        • Under estimation


  2- Time control
        • Behind schedule (late)
        • Ahead schedule (early)


  3- Cost control
        • Cost overrun
        • Cost underrun


Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
  4- Quality control
        • Acceptable level
        • Non-acceptable level


  5- Inventory control
        • Over estimation
        • Under estimation


  6- Resources control
        • Over estimation
        • Under estimation


  7- Plant condition control (safety, etc.)
        • Acceptable level
        • Non-acceptable level




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services


Control Steps:
  1- What to control?
  2- What is the standard (target) performance?
  3- What is the actual performance level?
  4- Comparison between the actual & target.
  5- Detection of variance
  6- Identification of causes of variance
  7- Corrective actions
  8- Learned lessons.

Total Control Levels:
  1- Review and data collection.
  2- Follow-up.
  3- Performance evaluation.
  4- Productivity analysis.
  5- Risk analysis for any future project.
  6- Corrective actions.
  7- Learned lessons.




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services



  1- Project               2- Project           3- Project
 Integration                 Scope                 Time
 Management               Management           Management



  4- Project                                    5- Project
  Resource                                         Cost
 Management                                    Management


  6- Project                                    7- Project
   Quality                                     Contractors
 Management                                    Management


   8- Project                                   9- Project
Communications                                 Procurement
 Management                                    Management



 10- Project            11- Project         12- Total Project
    Risk              Implementation             Control
 Management




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

6. PRODUCTIVITY ANALYSIS


WHAT IS THE PRODUCTIVITY ANALYSIS?


Productivity       Analysis    is   a    powerful   systematic
methodology to measure the following:
        o System performance
        o System efficiency
        o System effectiveness
        o Resource utilization
        o Profitability


WHY PRODUCTIVITY ANALYSIS (PA)?

PA helps decision makers
  • to identify the driving factors of productivity.
  • to adopt the appropriate action / policy.
  • to monitor its consequences.




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
7. PRODUCTIVITY & EFFECTIVENESS & EFFICIENCY


                       Productivity Dimensions
      Time           Quantity        Quality               Cost

        Effectiveness                         Efficiency

        = Actual output /           1- Technical Efficiency
         Planned output             2- Operating Efficiency
                                    3- Production Efficiency
                                    4- Economical Efficiency

Effectiveness:

  • It is related to performance.

  • It is the degree of accomplishment of objectives.

  • How well a set of results is accomplished.

Efficiency:

  • It is related to resource utilization.

  • It is the degree resources utilization.

  • How well the resources are utilized to achieve the results.

Productivity:

  • It is a combination of both effectiveness & efficiency.


Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services


Productivity index

           = Output obtained / Input expended

           = Performance achieved / Resources consumed

           = f (Effectiveness) / f (Efficiency)



8. TYPES OF PRODUCTIVITY

Based on outputs and inputs, productivity concepts may be
classified to two main categories as:
  • Total productivity,
  • Specific (partial) productivity.


8.1. TOTAL PRODUCTIVITY:
  • Total productivity is the ratio of total output to the sum of all
     inputs factors.
  • It is a relationship between production volume and all
     production elements consumed to achieve it.


The concept relies on the fact that production of an enterprise depends on
factors as capital, machinery, materials….. etc, as well as labor. Hence, it
becomes necessary to correlate different levels of productivity with


Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
performance and utilization of such other elements.

             Total productivity = Total output / Total input

    Total input = Labor + Material + Services + Depreciation + etc.



Total productivity reflects integrality of factors involved in production and
avoids measuring high performance of one factor on the account of low
performance for another.


However, this concept has been criticized. It assigns an equal weight to
both the human element and other human-innovated elements as
machinery, and material. A human individual has a more crucial role in
production as its development, organization, planning, control, and
processing. Other elements are looked at as technical tool that are managed
by individuals to induce high productivity. Another criticism is that total
productivity is usually measured in monetary units, and this basis of
measurement is sensitive to price and market changes which would lead to
false productivity indicators.




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
8.2. SPECIFIC (PARTIAL) PRODUCTIVITY

  • Partial productivity is the ratio of output to one class of input.
  • It is a relationship between production volume and the amount
     consumed of this element to produce.
        Partial productivity = Total output / One of the inputs

Such as:
           Material productivity = Total output / Material cost

             Labor productivity = Total output / Labor cost

        Machinery productivity = Total output / Depreciation

            Energy productivity = Total output / Energy cost

              Capital productivity = Total output / Capital


Total Factor Productivity (TFP)

  • It is the ratio of net output to the sum of associated labor
     and capital inputs factors.


Net output = Total output – Intermediate goods & services purchased

                  TFP = Net output / (Labor + Capital)

                    TFP = Output index / Input index



Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
    Productivity Change = Change in output y / Change in input x



Examples of each type of productivity may make its meaning clearer:


  • PRODUCTIVITY OF LAND: If, by using better seed, better
     methods of cultivation and more fertilizer, the yield of corn
     from a particular hectare of land can be increased from 2 quin-
     tals to 3 quintals, the productivity of that land, in the
     agricultural sense, has been increased by 50 per cent. The
     productivity of land used for industrial purposes may be said to
     have been increased if the output of goods or services within
     that area of land is increased by whatever means.


  • PRODUCTIVITY OF MATERIALS: If a skilful tailor is able
     to cut 11 suits from a bale of cloth from which an unskillful
     tailor can only cut ten, in the hands of the skilful tailor the bale
     was used with 10 per cent greater productivity.


  • PRODUCTIVITY OF MACHINES: If a machine tool has been
     producing 100 pieces per working day and through the use of
     improved cutting tools its output in the same time is in-creased
     to 120 pieces, the productivity of that machine has been
     increased by 20 percent.


Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services


  • PRODUCTIVITY OF MEN: If a potter has been producing 30
     plates an hour and improved methods of work enable him to
     produce 40 plates an hour, the productivity of that man has
     increased by 331/3 percent.


The factors affecting the productivity of each organization are many, and
no one factor is independent of others. The importance to be given to the
productivity of each of the resources (land, materials, machines or men,
etc.) depends on the enterprise, the industry and possibly the country.


To achieve the greatest increases in productivity, action must be taken by
all sections of the community:
  • Governments,
  • Employers,
  • Workers.


Governments can create conditions favorable to the efforts of employers
workers to raise productivity. For these it is necessary, among other things:
  • to have balanced programmes of economic development;
  • to take the steps necessary to maintain employment;
  • to try to make opportunities for employment for those who are
     unemployed or underemployed, and for any who may become


Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
     redundant as a result of productivity improvement in individual
     plants.


This is especially important in developing countries where unemployment
is a big problem.


Employers and workers also have vital parts to play. The main
responsibility for raising productivity in an individual enterprise rests with
the management. Only the management can introduce and create a
favorable climate for a productivity programme and obtain the co-
operation of the workers which is essential for real success, though this
requires the goodwill of the workers too. Trade unions can actively
encourage their members to give such co-operation when they are satisfied
that the programme is in the interests of the workers, as well as of the
country as a whole.


To manage productivity in a true sense of the term, four formal phases
must be recognized:
  • Measurement,
  • Evaluation,
  • Planning, and
  • Improvement.




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
Once the productivity level of an organization is measured in the current
time period (for example, the current month, quarter, or year), it must be
compared with the target level set up in the preceding period. Based on this
evaluation, a new productivity level must then be planned for the next
coming period. Finally, depending on the nature and level of the planned
target of productivity, improvement must take place in the next period.


To determine if the planned level has in fact been achieved, productivity
must be measured again in the next period. The entire cyclic process
repeats for as long as an organization formally manages its productivity
level and growth rate.


9. PRODUCTIVITY TERMS:
 • Measuring unit
 • Measuring process
 • Standard
 • Performance
 • Performance standard
 • Objective
 • Norm
 • Material utilization factor
 • Ratio
 • Index



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                         AUC- Engineering Services
10- BENEFITS OF HIGHER PRODUCTIVITY

The following is a list of some benefits that accrue from higher
productivity:


1. Higher productivities in a company with respect to human and
  physical resources will mean higher profits, because


  Profits =     revenue - cost of goods and services produced by the
                 utilization of human and material resources


2. Higher company productivity is generally translated into higher real
  earnings for its employees.


3. The public realizes more social benefits because of increased public
  revenues.


4. The consumer has to pay relatively low prices because the cost of
  manufacture is reduced through higher productivity.


11- BENEFITS OF PRODUCTIVITY MEASUREMENT

  Productivity measurement in an organization can have the following
  benefits:


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                          AUC- Engineering Services
1. The organization can assess the efficiency of conversion of its
  resources so that more goods or services are produced for a given
  amount of expended resources.


2. Resource   planning    can    be   facilitated   through   productivity
  measurement; both on a short-and long-term basis.


3.The economic and non economic objectives of the organization can be
 re-organized by priority in the light of a productivity measurement
 effort.


4. Planned productivity-level targets for the future can be modified
 realistically based on the measured levels now.


5. Strategies for improving productivity can be determined based on the
 extent of the gap between the planned level and the measured level of
 productivity.


6. Productivity measurement can help in comparing the productivity
 levels between organizations within a particular category, either at the
 industry or at the national level.


7. Productivity values generated as a result of a measurement may be



Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
  useful in planning the profit levels in an organization.


8. Measurement creates competitive action.


9. Collective bargaining can be accomplished more rationally once
  productivity estimates are available.



12. MEASUREMENT OF PRODUCTION

12-1- Physical Method:
  • Production is measured using physical units as ton, meter, liter, etc.
  • This method can be applied in industrial sectors with homogeneous
     production.
  • The following formula is generally used:
                                           n
                               P =      ∑ qi
                                          i =1

where qi is the quantity of the ith product in physical units.


12-2- Modified-Physical Method:
  • This method is used whenever production is not homogeneous.
  • Coefficients of Equivalence are introduced to transform quantities of
     different products into a quantity of a standardized product.



Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services
  • The next expression can be applied for measuring production.
                                       n
                               P =    ∑ qi ⋅ ei
                                      i =1

where ei are the i th product coefficient of equivalence.


The evaluation of the coefficients of equivalence are subject to few
considerations as:
     • product unit cost,
     • processing time per unit,
     • manual labor used,
     • weight or volume of a product, or
     • Any other special characteristic of a variety of products.


12-3- Monetary Method:
Whenever it is not possible to apply the physical method, the monetary
value of production is used.


In this case, the following formula can be applied:
                                       n
                               P =   ∑ qi ⋅ pi
                                      i =1

where Pi is the price per unit of the i th product.




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                          AUC- Engineering Services


The price must be specified as either the whole sale, retail, or discounted
price. Also when comparing productivity indices at different periods, a
base period must be used to account for inflation and other changes effects.


Even though this method is easy to apply, it suffers a major deficiency
specially when applied on the national or sector level.


The production, as measured, includes the value of all input elements (raw
material, semi-finished products, standard parts, etc.) purchased from other
sectors. The effect is such that the output of one sector, that will be
purchased by another, will also be considered as part of the production for
the other sector, and thus inflating the total value of production on the
national Level. This phenomenon also occurs on the corporation level.
Input elements for a corporation purchased from other corporations will be
included in the value of production of this corporation, while the value of
these elements do not represent actual contribution by it.


A better approach that has been suggested is to use the value added (or not
value added) to express production. The Value added concept expresses
production (P) as the total value of production less the value of input
elements purchased from outside. The advantage of this concept is that it
accounts for the actual contribution of a given system only.



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                           AUC- Engineering Services


Two forms are used, the value added (VA) and the net value added (NVA):
                                  n                  m
                     VA =
                       ij         ∑qi ⋅ pi − ∑I j ⋅ c j
                                  i=1                j =1

                            n                  m            l
               NVA =
                 ij        ∑qi ⋅ pi − ∑I j ⋅ c j −∑Dk
                            i=1                j=1          k=1

where,
Ij: number of units purchased of the J th input element
Cj: Cost/unit of input element j.
Dk: depreciation cost for the fixed asset.


12-4- Labor Method:
This method measures production in terms of labor units, where actual or
standard time needed to produce one unit is evaluated. This method is
particularly suitable when more than one product exists. Any of the
following two expressions can be applied:
                                         n
                                  P =   ∑ qi ⋅ ti
                                        i =1

of the jth labor plan to produce P; lij labor consumed of the jth labor class to
produce the i th product; and tij is the time per unit consumed of the jth
labor class to produce qi of the i th product.



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                           AUC- Engineering Services
    As it can be seen in the physical method the problem is how to com-
bine working hours of different labor classes with different skills. This
problem is taken into consideration by the next method.


12-5- Labor Modified-Physical Method:
This method uses weighing factor scheme to adjust for the different labor
class effects. The time consumed by each labor class is weighted by the
average wage rate for this class:
                                      m

                                     ∑ w j ⋅l j
                                     j =1
                             L =            m

                                       ∑wjj =1

where wj is an average wage weighing factor for the i th labor class, and lj
is the time consumed by labor class j to produce P.


Another weighing factor that may be suggested, however difficult to apply,
is based on a skill point rating system for each class of labor.


12-6- Labor Monetary Method:
This method is based on using money values to express labor consumed, it
is the most straight forward and easy-to-apply method. It can be expressed
mathematically as follows:




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
                                      n
                              P =   ∑ qi ⋅ ti
                                     i =1



where ti., tj are the actual time and standard time of labor consumed per
unit of product i.


Here, it is recommended to use standard processing times to compensate
for different labor skills and unify the method of measure-merit.



13. PRODUCTIVITY MEASUREMENT UNITS

Output units:
      - Physical units (ton, unit, m3)
      - Standard physical units
      - Monetary unit ($, L.E.)


Input units:
     - Physical units (man, man-hour, ton, unit, m3)
     - Monetary unit ($, L.E.)




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
14. LABOR PRODUCTIVITY MEASUREMENT:

Measurement of Labor:

    Methods of labor measurement are also classified as Physical Method,
Modified-Physical and Monetary Method, and we outline each of them as
they will be applied:


1- Physical Method:
Labor units used in this method are man-hours or man-days, necessary to
produce a particular quantity Any of the following forms can be used.
                                                   n
                                L=             ∑li
                                               i=1

                                               n
                               L =            ∑l j
                                               j =1

                                          n            m
                              L =    ∑ ∑lij
                                        i =1           j =1

                                    n           m
                           L=    ∑ ∑qi ⋅ lij
                                    i=1        j=1

where, li is labor consumed to produce quantity qi; lj is labor consumed:
                                               n
                               L=         ∑w jj =1



Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
where wj is the wage paid to the jth labor class to produce production
volume P. Some few problems are associated with this method. The wages
considered could be gross wage, basic wage, net wage or wages plus fringe
benefits. Also wage systems are different from an enterprise to another and
from a native currency to a foreign one. These limitations should be
carefully considered especially in comparative analysis.


As we have outlined above, there are twelve different methods for
measuring labor Productivity as the quotient P/L. Some of the different
methods along with their corresponding Productivity indices that we intend
to use are outline in the following table:


   Labor unit                            Output unit
                         Physical unit            Monetary unit
                         (Ton, unit, ..)              (L.E.)
   Physical unit         Ton / worker             L.E. / worker
  (worker, man-          Unit / worker           L.E. / man-hour
     hour, ..)          Ton / man-hour
  Monetary unit           Ton / L.E.                L.E. / L.E.
      (L.E.)              Unit / L.E.
                          Ton / L.E.

In Conclusion to this section we recommend using the physical method
whenever applicable. Otherwise, on the national level, we recommend
using the monetary method (value added) to measure production, and on
the corporate level, either the monetary or the labor method may be used.



Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
15. MATERIAL PRODUCTIVITY MEASUREMENT

    Material unit                            Output unit
                              Physical unit           Monetary unit
                              (Ton, unit, ..)              (L.E.)
     Physical unit              Ton / ton                L.E. / ton
     (Ton, unit, ..)            Unit / ton               L.E. / unit
                                Ton / unit
    Monetary unit              Ton / L.E.                L.E. / L.E.
       (L.E.)                  Unit / L.E.


There are many industries in which the cost of raw material represents 60
per cent or more of the cost of the finished product, the balance of 40
Percent divided between labor and overhead costs. Many countries have to
import a very large proportion of their basic raw materials and pay for
them in scarce foreign currencies.


Under either of these conditions the productivity of materials becomes a
key factor in economic production or operation; it is likely to be far more
important than the productivity of land or labor or even plant and
machinery. Although the technique of work study deals primarily with
improving the utilization of plant and of the services of labor, it can
frequently contribute to savings in materials, either directly or indirectly, as
in saving the erection of buildings through the better utilization of existing
space.




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
In general, however, savings in materials, direct or indirect, are affected in
the following ways:
* At the design stage or time of specification:
  • by ensuring that the design is such that the product can be
     manufactured with the least possible use of materials, especially
     when they are scarce or dear;
  • by ensuring that plant and equipment specified for purchase is
     the most economical possible in terms of materials consumed in
     its operation (e.g. fuel) for a given level of performance.


*At the process or operation stage:
  • by ensuring that the process used is the right one; by ensuring
     that it is being operated correctly;
  • by ensuring that operatives are properly trained and motivated
     so that they will not turn out faulty work which has to be
     rejected, leading to loss of material;
  • by ensuring proper handling and storage at all stages from raw
     materials to finished products, first eliminating all unnecessary
     handling and movement; and
  • by proper packaging to avoid damage in transit to the customer.


The question of material saving is so important to many countries that a
separate volume would be needed to discuss it.


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
16. MACHINE PRODUCTIVITY MEASUREMENT

                                       Output unit
  Machine unit         Physical unit           Monetary unit
                       (Ton, unit, ..)              (L.E.)
  Physical unit       Ton / machine            L.E. / machine
   (machine,          Unit / machine           L.E. / m/c-hour
   m/c-hour, ..)      Ton / m/c-hour
  Monetary unit         Ton / L.E.                L.E. / L.E.
     (L.E.)             Unit / L.E.
                        Ton / L.E.

                      System Effectiveness



         Efficiency                              Availability



         Utilization &             Reliability           Maintainability
     Resource productivity          MTBF                    MTTR
                                    MTBM                    MTTM



                   Maintenance Control Levels:

- Maintenance Follow-up
     -    (Actual/Plan)

- Maintenance Performance Evaluation
     - Time Availability
     - Reliability
     - Mean Time Between Failures (MTBF)

Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
     -   Mean Time To Failures (MTTF)
     -   Mean time to repair (MTTR)
     -   Mean time between repairs (MTBR)
     -   Mean Time Between Maintenance (MTBM)
     -   Preventive Maintenance Rate (PM rate)

                     S −d
Availability = A =
                       S x 100%

Percentage of downtime = Id = 100% - A

                                         S −d
Mean time between failures = MTBF =
                                           f

                           df
Mean time to repair MTTR =
                            f
Where,    S = Scheduled production time
d = Downtime        f = Number of failures.
df = Downtime delays from failures.

Example:
Scheduled production time = 31 day
Downtime = 6 day
Number of failures = 3 failure/month

                31− 6
           A=          x 100% = 80.6 %
                 31
           Id = 100 - 80.6 = 19.4%
                     31− 6
           MTBF =
                       3 = 8.33 days
                     6
           MTTR=       = 2 days
                     3



Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services
     MEASUREMENT OF MAINTENANCE EFFECTIVENESS

                      Equipment Losses Categories
        Category           Equipment losses          Indicator
  Down-time losses Equipment failures          Equipment
  (lost availability) Set-up and adjustments   availability
  Speed losses        Idling and minor         Equipment
  (lost performance) stoppages                 performance
                      Reduced speed operation efficiency
  Defect losses       Scrap and rework         Equipment quality
  (lost quality)      Start-up losses          Rate
  Resource losses     Critical resource        Resource
                      consumption rates        productivity
  Cost losses         All the previous losses  Repair cost
                                               CM/PM cost ratio
                                               Down time cost

  Overall equipment effectiveness (OEE)
     OEE = Equipment Availability × Performance efficiency × Quality rate

  Total effective equipment productivity (TEEP)

    TEEP =Utilization × Availability × Performance efficiency × Quality rate

  Net equipment effectiveness (NEE)

    NEE = Uptime ratio × Performance efficiency × Quality rate

  Mean unit between assists (MUBA):
   MUBA = Total number of units produced / Number of stoppages




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services


  What is the effect of Maintenance Policy on the
  Equipment OEE?
                    Maintenance Policy                         OEE
        Operate to failure (RTF)                             30 – 50 %

        Good PM Program                                      60 – 80 %
        Good bonus & incentive system
        Good PM Program based on RCM
        Good bonus & incentive system                  More than 80 %

   What are the main factors, which affect the Equipment
                          OEE?
            •   Product quality
            •   Production continuity & rates
            •   Shutdown frequency
            •   HSE factors
            •   Equipment availability
            •   Resource availability
            •   Operating & maintenance cost
            •   Down time cost rate

17. ENERGY PRODUCTIVITY MEASUREMENT

  Energy unit                        Output unit
                       Physical unit         Monetary unit
                       (Ton, unit, ..)           (L.E.)
  Physical unit        Ton / K.w.h.          L.E. / K.w.h.
    (K.w.h.)           Unit / K.w.h.
  Monetary unit         Ton / L.E.             L.E. / L.E.
     (L.E.)             Unit / L.E.



Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services
18. PRODUCTIVITY & FINANCIAL INDICATORS


          Change in                  Change in          Change in
          Resource                  Productivity         Product
          Quantity                                      Quantity



          Change in                  Change in          Change in
            Cost                      Profit            Revenue



          Change in                 Change in           Change in
          Resource                    Price              Product
            Price                  Contribution           Price


Profit = Revenue – Expenses

Profitability = Revenue / Expenses

                 Output quantity * Unit price
Profitability = -----------------------------------
                 Input quantity * Unit cost

                 Output quantity          Price
Profitability = ----------------------- * --------
                 Input quantity           Cost

Profitability = Productivity * Contribution factor

Productivity = Value added / hour worked.

Value added = Gross real revenue - intermediate goods

Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
19. Project Risk Analysis:


Risk Radar ® is a risk management database that is designed to help
project managers identify, prioritize, and communicate project risks in a
flexible and easy-to-use form.


Risk Radar ® provides standard database functions to add and delete
risks, together with specialized functions for prioritizing and retiring
project risks. Each risk can have a user-defined risk management plan and
a log of historical events. A set of standard detailed and summary reports
can be easily generated to share project risk information with all members
of the development team. The number of risks in each probability/impact
category by time frame can be displayed graphically, which allows the user
to visualize risk priorities and easily uncover increasing levels of detail on
specific risks.


Risk Radar ® also provides flexibility in prioritizing risks through
automatic sorting and risk-specific movement functions for priority
ranking.


Risk Radar ® will assist Risk Officers to identify the highest-priority risks
and to keep attention focused on them as a project evolves over time.




Global PE – Dr. Attia Gomaa
                             AUC- Engineering Services
Risk Radar ® does not discover risks; the project team must do that. But
once a risk is identified.


Risk Radar ® allows the risk to be fully described and prioritized relative
to the other risks a project faces. The key to successful use of Risk Radar ®
is to keep the highest-priority risks at the top of the risk-ranking list and to
focus mitigation efforts on them.


With Risk Radar ® a risk can be described; prioritized relative to all the
other risks in the database; a risk mitigation plan can be developed; and
events and decisions recorded that affect the risk over time.


Risk Radar ® includes a full set of standard short- and long-format reports
as well as a viewgraph-formatted report for communicating risk priorities
and mitigation efforts to upper management and the entire project team.


Risk Radar ® performs many of the Risk Analysis and Prioritization
functions automatically once the risk is entered into the data base. To
perform the risk prioritization process, subjective estimates must be made
based on professional judgment of the Probability that a risk will become
a problem and its impact on the project if the problem does occur.




Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
A Probability value of the risk occurrence of A = 10%, B = 30%, C = 50%,
D = 70%, or E = 90% is chosen, and then an Impact value of the risk
becoming a problem is chosen between 1 = very low, to 5 = very high.


Risk Radar then calculates a Risk Exposure for each risk. Consistent with
government and commercial best practices.


Risk Radar ® defines the Risk State using two qualitative values (1)
Probability and (2) Impact and then the Risk Exposure is calculated
from the Probability and Impact. The Probability and Impact fields are
provided as drop-down boxes.


Risk Radar ® uses risk exposure as a means to help rank risks relative to
one another, but it assumes these numbers have little or no meaning in an
absolute sense. In most cases, it would be inappropriate to compare
risks across projects based solely on numerical factors such as
probability, impact, or exposure. The best that can be hoped for is that
the project team will use numerical risk values consistently over the life of
the project so there is a consistent ranking of risks to keep the most
important ones at the top of the list.




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services


A Risk Level is determined based on the Risk Exposure classes according
to the following mapping. This calculated value is displayed on the Risk
Edit screens as shown in Figure 1.




Risk Radar ® calculates a Risk Exposure (RE) value based on the
assigned probability and impact using the following formula.


                RE = Probability x Largest Impact



                                Probability
       Level                  Criteria          Probability
        A                     Remote               0.1
        B                     Unlikely             0.3
        C                      Likely              0.5

         D               Highly Likely               0.7
         E               Near Certainty              0.9




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
                          Impact Definitions

Impact Technical                    Schedule                 Cost
  0    Does not apply               Does not apply           Does not
                                                             apply
   1      Minimal or no impact      Minimal or no impact     Minimal or no
                                                             Impact
   2      Acceptable with some      Additional resources     <5
                                    required, able to
          reduction in margin       satisfy
   3      Acceptable with           Minor slip in key        5-7%
                                    milestones; not able
          significant reduction     to meet need date
          in margin
   4      Acceptable, no            Major slip in key        7-10%
                                    milestones or critical
          remaining margin          path impacted
   5      Unacceptable major        Can’t achieve key        > 10%
                                    milestone
          program milestone
          milestone

    Risk Exposure Range                   Risk Level
           0.1 to 0.7                         Low
           0.9 to 2.1                       Medium
           2.5 to 4.5                         High
The detailed Risk Level mapping is shown in the table below:
Probability                  Risk Level (Risk Exposure)
    E         Medium   Medium         High            High        High
               (0.9)    (1.8)         (2.7)           (3.6)       (4.5)
    D          Low     Medium        Medium           High        High
               (0.7)    (1.4)         (2.1)           (2.8)       (3.5)
    C          Low     Medium        Medium          Medium       High
               (0.5)    (1.0)         (1.5)           (2.0)       (2.5)
    B          Low      Low          Medium          Medium      Medium
               (0.3)    (0.6)         (0.9)           (1.2)       (1.5)
    A          Low      Low           Low             Low         Low
               (0.1)    (0.2)         (0.3)           (0.4)       (0.5)
                1        2                3              4           5
                                       Impact



Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services


Red = Unacceptable. Major disruption is likely. Different approach
required. Priority management decision required.


Yellow = Moderate. Some disruption approach may be required.
Additional management attention may be needed.


Green = Low. Minimum impact. Minimum oversight needed to ensure risk
remains low.




Global PE – Dr. Attia Gomaa
                              AUC- Engineering Services
Risk analysis for certain project:
          Risk Exposure Area                 Risk Unit
Budget
            0 to $50,000 overrun                 1
         $50,001-$100,000 overrun                2
             $100,000-$200,000                   3
             $300,000-$500,000                   4
                 over $500,000                   5
Schedule Impact
              0 to 3 month slip                  1
           3 month to 6 month slip               2
          6 month to 12 month slip               3
          12 month to 18 month slip              4
               over 18 month                     5
Staff and Other Resources
          0 to 5% resource shortfall             1
       5.1% to 10% resource shortfall            2
       10.1% to 15% resource shortfall           3
       15.1% to 25% resource shortfall           4
         over 25% resource shortfall             5
Quality Impact
         0 to 5% quality gate failure            1
       5.1% to 10% quality gate failure          2
      10.1% to 15% quality gate failure          3
      15.1% to 25% quality gate failure          4
        over 25% quality gate failure            5
User Satisfaction Impact
      0 to 5 unresolved user comments            1
     6 to 12 unresolved user comments            2
     13 to 25 unresolved user comments           3
     26 to 50 unresolved user comments           4
     over 50 unresolved user comments            5



Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
20. PRODUCTIVITY LEVELS:


        Level                         Productivity indicators
         Top
      management                                    Monetary indicators
        Middle
      Management
      Operational
      management        Technical indicators



21- OVERALL PRODUCTIVITY ANALYSIS

  Production                   Quality                  Inventory
   Activities                 Activities                Activities


  Spare Parts                                            Quality
   Activities                                           Activities
                            Total
  Marketing              Productivity                  Purchasing
  Activities                                            Activities
                           Analysis
   Financial                                         Administration
   Activities                                          Activities


     Law
   Activities
                                …..                        …..

Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
22 - PRODUCTIVITY INDICATORS FOR PRODUCTION

ACTIVITIES


The major production activities can classified into six groups:
     - Production process
     - Materials
     - Labor
     - Machines
     - Maintenance
     - Inventory




22-1- Production process targets & measures:
             Targets                           Measures
Maximize:                       - Production rate
- Production quantity              (Output per hour)
                                - WIP %
Minimize:                       - Production progress %
- WIP                              (Actual output/ Target output)
- Lateness                      - Work orders progress %
                                   (Actual orders / Target orders)




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
22-2- Materials targets & measures:

              Targets                        Measures
Maximize:                     - Yield %
- Yield                       - Scrap %
                              - Rework %
Minimize:                     - Rejected %
- Scrap                       - Material cost %
- Material cost




22-3- Labor targets & measures:

              Targets                        Measures
Maximize:                     - Labor productivity
- Output per man-hour             (Output per Man-hour)
- Used capacity               - Labor utilization factor %
                              - Labor idle time %
Minimize:                     - Labor cost %
- Idle time
- Labor cost




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
22-4- Machines targets & measures:

              Targets                       Measures
Maximize:                     - Machine productivity
- Machine output                  (Output per Machine-hour)
- Used capacity               - Machine utilization factor %
                              - Machine idle time %
Minimize:                     - Machining cost %
- Idle time
- Machining cost




22-5- Maintenance targets & measures:

              Targets                       Measures
Maximize:                     - Average availability %
- Availability                - Average reliability
- Reliability                 - MTBF / MTTF / MTTR
                              - Down time due to maintenance
Minimize:                     - Corrective maintenance %
- Down time                   - Maintenance cost %
- Maintenance cost            - Losses due to maintenance




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
22-6- Inventory targets & measures:

             Targets                        Measures
Maximize:                     - Material Inventory availability%
- Material availability       - Material Inventory rejected%
                              - Down time due to inventory
Minimize:                     - Losses due to inventory
- Rejected




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
23- PERFORMANCE     EVALUATION                       SHEET     FOR
PRODUCTION ACTIVITIES

       Item               Measures             Actual Target Change%
  1-            - Production rate
  Production    - WIP %
  Process       - Production progress %
                - Work orders progress %
  2-            - Yield %
  Materials     - Scrap %
                - Rework %
                - Rejected %
                - Material cost %
  3-            - Labor productivity
  Labor         - Labor utilization factor %
                - Labor idle time %
                - Labor cost %
  4-            - M/c productivity
  Machines      - M/c utilization factor %
                - M/c idle time %
                - Machining cost %




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

       Item              Measures             Actual Target Change%
  5-            - Average availability %
  Maintenance   - Average reliability
                - MTBF / MTTF
                - MTTR
                - D.T. due to maintenance
                - Corrective maintenance %
                - Maintenance cost %
                - Losses due to maintenance
  6-            - Inventory availability%
  Inventory     - Inventory rejected%
                - D.T. due to inventory
                - Losses due to inventory




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
24. PRODUCTIVITY IMPROVEMENT TECHNIQUES


Productivity can improve through:
  • Technological development
  • Improved operational efficiency
  • Allocation of the resources to produce the right outputs by
     the right inputs, utilizing the optimal scale and the scope


In a comprehensive survey of the literature, more than 50 different
techniques of productivity improvement were cataloged. These
techniques can classified into seven basic groups:
     1- Technology based techniques
     2- Material based techniques
     3- Product based techniques
     4- Employee based techniques
     5- Task based techniques
     6- Management based techniques
     7- Investment based techniques




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
24-1- Technology based techniques

- Computer Applications
- Computer Graphics (Auto-Cad)
- Computer Aided Design (CAD)
- Computer Aided Process Planning (CAPP)
- Computer Aided Manufacturing (CAM)
- Group Technology
- New Production lines / Machines
- Rebuilding old machines
- Maintenance planning & control
- Layout




24-2- Material based techniques

- Inventory control
- Material Requirements Planning (MRP)
- Quality control
- Material handling improvement
- Material reuse & recycling
- New materials




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
24-3- Product based techniques


- Research & Development (R&D)
- Product design
- Product standardization
- Product reliability improvement
- Value engineering


24-4- Employee based techniques

- Individual financial incentives
- Group financial incentives
- Training & education
- Quality circles
- Brain storming
- Working conditions improvement
- Communication improvement
- Job rotation


24-5- Task based techniques

- Work study
- Job evaluation
- Job safety


Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
- Human factors engineering (Ergonomics)
- Computer aided data processing
- Scheduling


24-6- Management based techniques

- Marketing Management
- Production Management
- Quality Management
- Cost Management
- Maintenance Management
- Material Management
- Resource Management


24-7- Investment based techniques

- Reducing the administration cost
- Increasing value added
- Increasing contribution
- Increasing profit




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
25. PRODUCTIVITY IMPROVEMENT CYCLE


To manage productivity in a true sense of the term, four formal phases
must be recognized:
  Phase I: Measurement
  Phase II: Evaluation
  Phase III: Planning & Implementation
  Phase IV: Control & Updating

Once the productivity level of an organization is measured in the current
time period (for example, the current month, quarter, or year), it must be
compared with the target level set up in the preceding period. Based on this
evaluation, a new productivity level must then be planned for the next
coming period. Finally, depending on the nature and level of the planned
target of productivity, improvement must take place in the next period.


To determine if the planned level has in fact been achieved,
productivity must be measured again in the next period. The entire
cyclic process repeats for as long as an organization formally manages
its productivity level and growth rate.




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
Phase I: Measurement
          • Data collection & analysis
          • Productivity indicators
          • Determination of problems types
          • Determination of problems priorities
          • Information collection & analysis
          • System analysis
          • Proposal solutions

  Phase II: Evaluation
         • Feasibility study
         • Determination of functional requirements
         • Choose the best solution

  Phase III: Planning & Implementation
         • Preparation of implementation specification
         • Programming
         • Implementation

  Phase IV: Control & Updating
         • Review
         • Follow-up
         • Performance evaluation
         • Productivity analysis
         • Corrective actions
         • Plans update
         • Report preparation




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services




 Performance Management & Appraisal

                        Case Studies




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services


8- PMIS for a Small Company
8-1- Project Study Phase

8-1-1- Description of the current system

M-1- Top management level:


M-1-1- Planning:
 M-1-1-1- Next year predictions
 M-1-1-2- Risk analysis
 M-1-1-3- Work Breakdown Structure (WBS)
 M-1-1-4- Master plans
 M-1-1-5- Master budget analysis
 M-1-1-6- Critical resource analysis


M-1-2- Control:
  M-1-2-1- Annual performance evaluation (target / actual)
  M-1-2-2- Annual performance evaluation for last two years
  M-1-2-3- Annual performance eval. for last multi years
  M-1-2-4- Annual performance eval. for critical projects



Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
M-2- Control management level:


M-2-1- Planning:
  M-2-1-1- Work Breakdown Structure (WBS)
  M-2-1-2- Master projects schedule
  M-2-1-3- Resource predictions
  M-2-1-4- budget predictions
  M-2-1-5- Risk analysis
  M-2-1-6- Critical resource allocation
  M-2-1-7- Action plans (schedule, resources, cost)
  M-2-1-8- Project Planning (schedule, resources, cost)
  M-2-1-9- Critical resource analysis for each project

M-2-2- Control:
 M-2-2-1- Annual performance evaluation (Target / Actual)
 M-2-2-2- Annual performance evaluation for last two years
 M-2-2-3- Annual performance eval. for last multi years
 M-2-2-4- Annual critical resource productivity analysis
 M-2-2-5- Monthly Perf. eval. for the current and last year
 M-2-2-6- Project performance evaluation (Target / Actual)
 M-2-2-7- Critical resource productivity anal. for each Project




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
M-3- Operational management level:

M-3-1- Project targets & requirements
 M-3-1-1- Target budget, time, quality, etc.
 M-3-1-2- Constraints.

M-3-2- Project design
 M-3-2-1- Engineering calculations
 M-3-2-2- Project drawings
 M-3-2-3- Bill of Materials (BOM)

M-3-3- Project Quality
 M-3-3-1- Standard quality (required)
 M-3-3-2- Inspection information
 M-3-3-3- Quality control

M-3-4- Project planning
 M-3-4-1- Master plan
 M-3-4-2- Action plan
 M-3-4-3- Detailed plan
 M-3-4-4- Job description
 M-3-4-5- Performance rates
 M-3-4-6- Resource profiles

M-3-5- Procurement
 M-3-5-1- Material Requirements Planning (MRP)
 M-3-5-2- Suppliers selection
 M-3-5-3- Procurement planning
 M-3-5-4- Procurement control



Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
M-3-6- Inventory
 M-3-6-1- Inventory ABC analysis
 M-3-6-2- Inventory limits
 M-3-6-3- Inventory Lot sizes
 M-3-6-4- Inventory transactions
 M-3-6-5- Inventory cost analysis
 M-3-6-6- Inventory control

M-3-7- Production (Construction, Fabrications, .. etc.)
 M-3-7-1- Production target schedule
 M-3-7-2- Production materials plans
 M-3-7-3- Production manpower plans
 M-3-7-4- Production machines plans
 M-3-7-5- Production cost analysis
 M-3-7-6- Production control

M-3-8- Maintenance planning
 M-3-8-1- Maintenance target schedule
 M-3-8-2- Maintenance spare parts plans
 M-3-8-3- Maintenance manpower plans
 M-3-8-4- Maintenance cost analysis
 M-3-8-4- Maintenance control

M-3-9- Project updating
 M-3-9-1-
 M-3-9-2-

M-3-10- Project control (target / actual)
 M-3-10-1- Performance evaluation for production system
 M-3-10-2- Performance eval. for maintenance system
 M-3-10-3-

Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services

8-1-2- Module descriptions:
For examples,
M-1-2-1- Annual performance evaluation (target / actual)

I- Module block diagram:
        Inputs             Tools/                Outputs
                          Approach
1- Production volume                  1- Follow-up indicators.
2- Unit Price             Excel       2- Performance evaluation.
3- Average manpower                   3- Productivity analysis.
4- Average labor rate                 4- Perf. Eval. for base year
5- Direct material                       (Actual 2002).
quantity                              5- Prod. analysis for base
6- Direct material cost                  year (Actual 2002).
7- Indirect material cost             6- Conclusion.
8- Depreciation
9- Capital cost
10- Total energy
consumption
11- Energy cost rate
12- Other expense




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services

II- Module    Inputs Form:
Consider the XYZ company, the data for target and actual for year
2002 are given below:

                 Item                        Year 2002
                                        Target       Actual
Production volume (unit)                1200         1000
Unit Price ($)                           900         1000
Average manpower (worker)                320          300
Average labor rate ($/year/worker)       950         1000
Direct material quantity (ton)           160          150
Direct material cost ($/ton)             970         1000
Indirect material cost (1000$)            60           50
Depreciation (1000$)                     100          100
Capital cost (1000$)                     300          300
Total energy cons. (1000 k.w.h.)         230          200
Energy cost ($/ k.w.h.)                  0.6           0.5
Other expense (1000$)                     45           50


Based on these data, construct the following:
  1. Follow-up indicators.
  2. Performance evaluation.
  3. Productivity analysis.
  4. Performance evaluation for base year (Actual 2002).
  5. Productivity analysis for base year (Actual 2002).
  6. Conclusion.




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services

III- Module Output Forms:


                    (1): FOLLOW-UP INDICATORS

                                          Target   Actual    Chang
                  Item
                                           2002     2002      e%
Production volume (unit)                   1200     1000
Unit Price ($)                             900        1000
Average manpower (worker)                  320        300
Average labor rate $/year/worker           950        1000
Direct material quantity (ton)             160        150
Direct material cost ($/ton)               970        1000
Indirect material cost (1000$)              60         50
Depreciation (1000$)                       100        100
Capital cost (1000$)                       300        300
Total energy consumption (1000 k.w.h.)     230        200
Energy cost ($/ k.w.h.)                    0.6        0.5
Other expense (1000$)                       45         50

Total output (M$)
Total inputs (M$)
Profit (1000$)
         (%)




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services


         (2): PERFORMANCE EVALUATION INDICATORS


                  Item               Target    Actual    Change
                                      2002      2002       %
Total output (M$)                                1.0
Labor cost (1000$)                               300
Material cost (1000$)                            200
Depreciation (1000$)                             100
Capital cost (1000$)                             300
Energy cost (1000$)                              100
Other expense (1000$)                            50
Total inputs (1000$)                             950
Profit (1000$)                                   50
          (%)                                   5.2%
      Value Added (1000$)                        800
          ($/$)                                      4




Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services

           (3): PRODUCTIVITY ANALYSIS INDICATORS
                            (Monetary unit $/$)
       Productivity indicator             Target   Actual    Change
                                           2002     2002       %
Total productivity ($/$)                           1.053
Material productivity ($/$)                        5.000
Labor productivity ($/$)                           3.333
Machinery productivity ($/$)                       10.00
Energy productivity ($/$)                          10.00
Capital productivity ($/$)                          3.33
Other expense prod. ($/$)                          20.00
Total factor prod. ($/$)                           0.583

                              (Physical units)

Labor productivity unit /worker                     3.33
Material productivity unit /ton                     6.67
Energy productivity k.w.h./ unit                       200




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
         (4): PERFORMANCE EVALUATION INDICATORS
                       BASE YEAR – ACTUAL 2002


           Item                 Target      Actual    Change
                                 2002        2002       %
Total output (M$)                             1.0
Labor cost (1000$)                           300
Material cost (1000$)                        200
Depreciation (1000$)                         100
Capital cost (1000$)                         300
Energy cost (1000$)                          100
Other expense (1000$)                         50
Total inputs (1000$)                         950
       Profit (1000$)                         50
        (%)                                (5.2%)
   Value Added (1000$)                       800
              ($/$)                         (4 $/$)




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services


           (5): PRODUCTIVITY ANALYSIS INDICATORS
                     BASE YEAR – ACTUAL 2002
                           (Monetary unit $/$)
           Productivity                 Target   Actual   Change
                                         2002     2002      %
Total productivity ($/$)                         1.053
Material productivity ($/$)                       5.00
Labor productivity ($/$)                          3.33
Machinery productivity ($/$)                     10.00
Energy productivity ($/$)                        10.00
Capital productivity ($/$)                        3.33
Other expense prod. ($/$)                        20.00
      Total factor prod. ($/$)                   0.583

                              (Physical units)

Labor prod. (unit /worker)                        3.33
Material prod. (unit /ton)                        6.67
Energy prod. K.w.h. / unit                        200




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
IV- Module Calculations:

  Available Information:


  Output elements:
     • Production volume
     • Unit price


     Total output = Production volume * Unit price


  Inputs elements:
     • Labor cost
     • Material cost
     • Depreciation
     • Capital cost
     • Energy cost
     • Other expense


Total inputs = Labor cost + Material cost + Capital cost
                  + Energy cost + Other expense




Global PE – Dr. Attia Gomaa
                             AUC- Engineering Services
Follow-up indicators:
1- Profit = Total output - Total inputs
     Profitability = Total output / Total inputs


                            Performance indicators:

2- Value Added = Revenue – Material Cost
     Value Added % = Value Added / Material Cost


3- Contribution = Fixed cost + Profit
or
Contribution = Total output – Variable inputs
Contribution % = Contribution / Variable inputs


                 Productivity Indicators (Monetary unit $/$):
4- Total productivity = Total output / Total inputs
5- Material productivity = Total output / Material cost
6- Labor productivity = Total output / Labor cost
7- Machinery productivity = Total output / Depreciation
8- Energy productivity = Total output / Energy cost
9- Capital productivity = Total output / Capital
10- Other expense productivity= Total output / Other expense




Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services
11- Total factor productivity =
                       Net output / Internal resources
Net output = Total output – External resources
Assume that the company purchases all its materials and services.
External resources =
        Material cost + Capital cost + Energy cost + Other expense


                Productivity Indicators (Physical units):
12- Labor productivity
                = Production volume / Average manpower
13- Material productivity
              = Production volume / Direct material quantity
14- Energy productivity =
              Total energy consumption / Production volume




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
M-1-2-2- Annual performance evaluation for last two years

Module block diagram:
Inputs                        Tools/       Outputs
                              Approach
1- Production volume                     1- Follow-up indicators.
2- Unit Price               Excel        2- Performance evaluation.
3- Average manpower                      3- Productivity analysis.
4- Average labor rate                    4- Perf. Eval. for base year
5- Direct material quantity                 2002.
6- Direct material cost                  5- Prod. analysis for base
7- Indirect material cost                   year 2002.
8- Depreciation                          6- Conclusion.
9- Capital cost
10- Total energy
consumption
11- Energy cost rate
12- Other expense




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
I- Module Inputs Form:

Consider the XYZ company, the data for output produced and
inputs consumed for May 2001 & May 2002 are given below:

                   Item                       Year      Year
                                              2001      2002
Production volume (unit)                      1200      1000
Unit Price ($)                                 800      1000
Average manpower (worker)                      310      300
Average labor rate ($/year/worker)             900      1000
Direct material quantity (ton)                 180      150
Direct material cost ($/ton)                   900      1000
Indirect material cost ($)                   45,000    50,000
Depreciation ($)                            100,000   100,000
Capital cost ($)                            300,000   300,000
Total energy consumption (K.W.H.)           250,000   200,000
Energy cost ($/ K.W.H.)                        0.5       0.5
Other expense ($)                            60,000    50,000


Based on these data, construct the following:
  1. Follow-up indicators.
  2. Performance evaluation.
  3. Productivity analysis.
  4. Performance evaluation for base year 2002.
  5. Productivity analysis for base year 2002.
  6. Conclusion.



Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services

II- Module Output Forms:

                    (1): FOLLOW-UP INDICATORS

                                           Year   Year       Change
                  Item
                                           2001       2002     %
Production volume (unit)                   1200       1000   - 16.7
Unit Price ($)                             800        1000   + 25.0
Average manpower (worker)                  310        300     - 3.2
Average labor rate $/year/worker           900        1000   + 11.1
Direct material quantity (ton)             180        150    - 16.7
Direct material cost ($/ton)               900        1000   + 11.1
Indirect material cost (1000$)              45         50    + 11.1
Depreciation (1000$)                       100        100     0.0
Capital cost (1000$)                       300        300     0.0
Total energy consumption (1000 k.w.h.)     250        200    - 25.0
Energy cost ($/ k.w.h.)                    0.5        0.5     0.0
Other expense (1000$)                       60         50    + 16.7

Total output (M$)                        0.96     1.0        + 4.20
Total inputs (M$)                        .971     .950        - 2.2
Profit (1000$)                           - 11     50
         (%)                             -1.1     5.2         + 6.3




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services


         (2): PERFORMANCE EVALUATION INDICATORS


                  Item                Year      Year     Change
                                      2001      2002       %
Total output (M$)                     0.96       1.0     + 4.20
Labor cost (1000$)                    279        300     + 7.53
Material cost (1000$)                 207        200     + 3.38
Depreciation (1000$)                  100        100       0.0
Capital cost (1000$)                  300        300       0.0
Energy cost (1000$)                   125        100     - 20.0
Other expense (1000$)                  60        50      - 16.7
Total inputs (1000$)                  971        950      - 2.2
Profit (1000$)                        - 11     50 5.2%
          (%)                         - 1.1               + 6.3
      Value Added (1000$)             453        800
          ($/$)                       2.19           4   + 82.64




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

           (3): PRODUCTIVITY ANALYSIS INDICATORS
                           (Monetary unit $/$)
       Productivity indicator              Year    Year    Change
                                           2001    2002      %
Total productivity ($/$)                   0.989   1.053   + 6.47
Material productivity ($/$)                4.638   5.000   + 7.81
Labor productivity ($/$)                   3.441   3.333   - 3.23
Machinery productivity ($/$)               9.600   10.00   + 4.17
Energy productivity ($/$)                  7.680   10.00   + 30.21
Capital productivity ($/$)                 3.200   3.33    + 4.06
Other expense prod. ($/$)                 16.000   20.00   + 25.0
       Total factor prod. ($/$)            0.463   0.583   + 25.92

                              (Physical units)

Labor productivity unit /worker             3.87   3.33    - 13.95
Material productivity unit /ton             6.60   6.67      0.0
Energy productivity k.w.h./ unit           208.3    200    - 3.98




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
         (4): PERFORMANCE EVALUATION INDICATORS
                          BASE YEAR – 2002


           Item                 Year         Year    Change
                                2001         2002      %
Total output (M$)                1.2         1.0     - 16.7 %
Labor cost (1000$)              310          300     - 3.2 %
Material cost (1000$)           230          200     - 13.0 %
Depreciation (1000$)            100          100       0.0
Capital cost (1000$)            300          300       0.0
Energy cost (1000$)             125          100     - 20 %
Other expense (1000$)            50           50       0.0
Total inputs (1000$)            1015         950     - 6.4 %
       Profit (1000$)           185           50
        (%)                   (15.4%)     (5.2%)      - 10.2
   Value Added (1000$)          970          800
              ($/$)           (4.2 $/$)    (4 $/$)   - 4.76 %




Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services


           (5): PRODUCTIVITY ANALYSIS INDICATORS
                           BASE YEAR – 2002
                           (Monetary unit $/$)
           Productivity                 Year     Year    Change
                                         2001    2002      %
Total productivity ($/$)                1.182    1.053   - 10.9
Material productivity ($/$)             5.217    5.00    - 4.16
Labor productivity ($/$)                3.871    3.33    - 13.98
Machinery productivity ($/$)            12.00    10.00   - 16.67
Energy productivity ($/$)                9.60    10.00   + 4.17
Capital productivity ($/$)               4.00    3.33    + 16.75
Other expense prod. ($/$)               24.00    20.00   + 16.67
      Total factor prod. ($/$)          0.811    0.583   - 28.11

                              (Physical units)

Labor prod. (unit /worker)               3.87    3.33    - 13.95
Material prod. (unit /ton)               6.67    6.67      0.0
Energy prod. K.w.h. / unit              208.3    200     - 3.98



IV- Module Calculations:

          See M-1-2-1

Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
M-1-2-3- Annual performance evaluation for last multi years


I- Module block diagram:
Inputs                        Tools/       Outputs
                              Approach
1- Production volume                     1- Follow-up indicators.
2- Unit Price               Excel        2- Performance evaluation.
3- Average manpower                      3- Productivity analysis.
4- Average labor rate                    4- Perf. Eval. for base year
5- Direct material quantity                 2002.
6- Direct material cost                  5- Prod. analysis for base
7- Indirect material cost                   year 2002.
8- Depreciation                          6- Risk analysis for the
9- Capital cost                             future year (2003)
10- Total energy                         7- Conclusion.
consumption
11- Energy cost rate
12- Other expense




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
II- Module Inputs Form:

Consider the XYZ company, the data for output produced and inputs
consumed for four last years (from 1999 to 2002) are given below:

              Item               Year    Year     Year   Year
                                 1999    2000     2001   2002
Production volume (unit)         1450    1300     1200   1000
Unit Price ($)                   720     750      800    1000
Average manpower (worker)        340     330      310    300
Average labor rate               700     750      900    1000
($/year/worker)
Direct material quantity (ton)   220     200      180    150
Direct material cost ($/ton)     700     750      900    1000
Indirect material cost (1000$)   25      30       45     50
Depreciation (1000$)             100     100      100    100
Capital cost (1000$)             300     300      300    300
Total energy consumption (1000   310     300      250    200
k.w.h.)
Energy cost ($/ k.w.h.)          0.3     0.4      0.5    0.5
Other expense (1000$)            75      70       60     50

Based on these data, construct the following:
  1. Follow-up indicators.
  2. Performance evaluation indicators.
  3. Productivity analysis indicators.
  4. Performance evaluation for base year 2002.
  5. Productivity analysis for base year 2002.
  6. Risk analysis for the future year (2003).
  7. Conclusion.




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
III- Module Output Forms:

See M-1-2-2-
  (1): FOLLOW-UP INDICATORS
  (2): PERFORMANCE EVALUATION INDICATORS
  (3): PRODUCTIVITY ANALYSIS INDICATORS
  (4): PERFORMANCE EVALUATION INDICATORS
   BASE YEAR – 2002
  (5): PRODUCTIVITY ANALYSIS INDICATORS
  BASE YEAR – 2002


                         (6):RISK ANALYSIS


       Item          Year Year Year Year      Exp.   forecasting
                     1999 2000 2001 2002      2003      Limit
P. volume (unit)     1450 1300 1200 1000        ?         ?




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
IV- Module Calculations:
        See M-1-2-1


                   Forecasting & Risk estimation
                              Y=a+bX
Sum Y = n . a + b Sum X ,            Sum XY = a Sum X + b Sum X2

Measuring the accuracy of forecasting:
1- Coefficient of correlation

    r =( n Sum XY - Sum X Sum Y) /
                 ( n Sum X2 – (Sum X) 2 ) 0.5 ( n Sum Y2 – (Sum Y) 2 ) 0.5
2- Mean Absolute Deviation

      MAD = sum | A – F | / (n -1)

3- Mean Squared Error

      MSE = sum (A – F)2 / (n -1)

Controlling the forecast:

      CLs = 0 ± Z S
                                              0


S = Standard deviation of the distribution of errors
  =√ MSE

Z=3        99.7% of the values can be expected.
Z=2        95.5% of the values can be expected.
Z=1        68.5% of the values can be expected.



Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
Example: Production volume

                      Year     Year    Year     Year      Exp.   Risk%
         Item
                      1999     2000    2001     2002      2003    2003
P. volume (unit)      1450     1300    1200     1000        ?      ?

  X        1          2         3        4        5
  Y      1450       1300      1200     1000       ?
 XY      1450       2600      3600     4000
n=4
Sum X = 10                    Sum X2 = 30
Sum Y = 4950                  Sum XY = 11650

Sum Y = n . a + b Sum X            Sum XY = a Sum X + b Sum X2

4950 = 4 a + 10 b                  11650 = 10 a + 30 b

                                   14850 = 12 a + 30 b
a = 1600          b = - 145

Y = 1600 – 145 X              Y5 = 1600 – 145 (5) = 875

  X          1        2         3        4        5
  A        1450     1300      1200     1000       -
  F        1445     1310      1165     1020      875
(A-F)        5       10        35       20
(A-F)2      25       100      1225      400

MSE = 1750 / (4 -1) = 583

S = 24            Z=2

     CLs = 0 ± Z S = 0 ± 48



Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services
M-1-2-4- Annual performance evaluation for critical projects
Module Input Forms:
1- Relations:
Project ID      P1    P2    P3      P4       P5          P6    P7       P8
Predecessors     -     -     -       -     P2 & P4       P3    P6     P5 & P7

  Project                  Production plan & critical resources
    #          Duration        Equipment    Manpower cost       Material cost
               (month)          cost (M$)         (M$)             (M$)
    P1             5               5.0             10               30
    P2             2               1.5             1.5               3
    P3             2               1.5             2.5               8
    P4             2               1.0             2.0               6
    P5             3               2.0             8.0              14
    P6             2               2.0             4.0               8
    P7             3               0.5             1.5               4
    P8             3               0.5             1.5               2
Target budget rate: 11 M$ /month & Target duration: 10 month
Overhead cost rate = $ 4,000 /month & Downtime cost rate = $ 6,000/month

  Project                  Actual production & critical resources
    #          Duration         Equipment     Manpower cost       Material cost
                (month)          cost (M$)         (M$)               (M$)
    P1             6                4.0             10                 32
    P2             3                2.0             2.0                 4
    P3             2                1.5             3.0                 7
    P4             3                1.0             2.0                 5
    P5             4                2.0             7.0                15
    P6             2                2.0             5.0                 7
    P7             3                0.6             1.4                 4
    P8             2                0.7             1.3                 2
Maximum budget rate: 14 M$ /month           & Actual duration: 12 month
Based on these data, construct the following:
     1. Target plans (schedule, equipment profile, cost profile, and S-curve).
     2. Follow-up indicators
     3. Performance evaluation indicators
     4. Productivity analysis indicators


Global PE – Dr. Attia Gomaa
                             AUC- Engineering Services
      5. Conclusion.
M-2-2-5- Monthly Performance evaluation for the current and last
year

Module Input Forms:

The monthly production report for an Egyptian foundry is as follows:

                                             Year 2001         Year 2000
           Indicator             Unit      January Year to   January Year to
                                                   date              date
Production indicators:
Planned production quantity      Ton       160     1200      120     900
Actual production quantity       Ton       130     900       110     800
Rejected quantity                Ton       10      70        8       50
Resources indicators:
Average working manpower         Man       50      52        48      50
Total manpower working time      Man-hr.   7250    51000     7000    50000
Average working furnaces         Furnace   30      33        28      32
Furnaces working time            Fr.-hr.   4500    33000     3500    25000
Total charge material quantity   Ton       185     1300      160     1100
Total energy consumption         K.W.H     78000   550000    75000   520000

Based on these data, determine the different performance evaluation indicators
for the production system.




Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services
M-2-2-6- Project performance evaluation (Target/ Act.)
I- Module Input Forms:

The production plan and the actual production in a power towers fabrication
project are as follows:
 Activity ID (work order)   A11       A12       A13      A14      A15
 Predecessors                 -        -          -      A11      A13

Target plan:

Target no. of equipment is 12 eq./week & Target duration: 24 week
 Work                       Production plan & critical resources
order # Duration Number            Planned Standard         Planned     Planned
           (week)         of       quantity      cost      manpower material
                     equipment       (ton)     ($/ton)       (Man-      (ton/ton)
                                                            day/ton)
  A11          8          5            40       1000          100          1.20
  A12          5          7            30       1200          110          1.20
  A13          6          8            50        900           95          1.20
  A14          8          5            30        850           80          1.20
  A15         20          5            80        950           95          1.20
Overhead cost rate = $ 1,000 /week &       Downtime cost rate = $ 3,000/week

Actual plan:

 Work                      Actual production & critical resources
order #   Duration Number           Actual     Actual        Actual      Actual
            (week)        of       quantity      cost      manpower     material
                     equipment       (ton)     ($/ton)       (Man-      (ton/ton)
                                                            day/ton)
 A11           9           6           40       1100           95         1.30
 A12           6           6           20       1200          110         1.25
 A13           6           8           40       1000          100         1.20
 A14           9           5           35        800           80         1.15
 A15          20           5           90       1000           85         1.16
Actual no. of equipment is 14 eq./week & Actual duration: 27 week

Based on these data, determine the different performance evaluation indicators
for the production system.


Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
M-3-4-5- Project performance evaluation (Target/ Actual)

                           Gas Pipe Line 120 Km
Target production:

Activity   Activity Description   Performance         Cost
  ID                              rate Km/day 1000 L.E. / Km
   E      Excavation                    2               5
   S      Stringing                     4              400
  W       Welding                       1               20
  N       NDT                           2               10
   C      Coating & Wrapping            2               2
   L      Lowering                      4               1
   B      Backfilling                   4               3
   T      Hydrotest                 (3 days)           0.1
Target duration: 6 month * 24 day/month
Overhead cost rate = $ 1,000 /day &      Downtime cost rate = $ 2,000/day

Actual production:

Activity   Activity Description    Duration           Cost
  ID                                 (day)          1000 L.E.
   E      Excavation                   50              500
   S      Stringing                    25            40,000
  W       Welding                     140             2,500
  N       NDT                          80             1,500
   C      Coating & Wrapping           50              250
   L      Lowering                     40              150
   B      Backfilling                  25              350
   T      Hydrotest                 (5 days)            10
Actual duration: 8 month * 24 day/month

Based on these data, determine the different performance evaluation indicators
for the production system.




Global PE – Dr. Attia Gomaa
                                 AUC- Engineering Services
 M-3-6-1- Production Performance evaluation (Target/ Actual)

 I- Module Input Forms:
 The monthly production plan and the actual production are as follows:

                         Production Plan (Jan. 2001)

Activity   Planned    Standard     Planned   Target     Estimated   Estimated
  ID       quantity      cost       period    date      manpower     material
            (ton)      ($/ton)      (day)     Jan.        (man-      quantity
                                              2001      hour/ton)     (ton)
 A01         40         1000          10     1 to 11        50          52
 A02         30         1200           6      3 to 9        60          45
 A03         50          900           9     11 to 20       45          70
 A04         20          850           6     20 to 26       40          24
 A05         20          950           5     25 to 30       48          26


                        Actual Production (Jan. 2001)

Activity Actual        Actual       Actual   Actual      Actual      Actual
  ID     quantity        cost       period    date      manpower    material
          (ton)        ($/ton)      (day)     Jan.       (man-      quantity
                                                        hour/ton)     (ton)
  A01        40         1100          9      2 to 11       70           56
  A02        20         1200          5       3 to 8       60           28
  A03        40         1000          8      12 to 20      50           60
  A04        10          800          3      20 to 23      35           13
  A05        20          900          6      25 to 31      45           28

 Based on these data, determine the different performance evaluation indicators
 for the production system.




 Global PE – Dr. Attia Gomaa
                                  AUC- Engineering Services
M-3-6-2- Production Performance evaluation (Target/ Actual)

                       Monthly Plan for Civil Works (Jan. 2004)
1- Activity List
                                             Duration Predecessors   Relations
      Activity                    ID
                                              (day)                (SS, FF, etc.)
      1        Mobilization       MOB           1
      2        Excavation #1      EX1           3        MOB
      3        Excavation #2      EX2           4        MOB
      4        Excavation #3      EX3           2        MOB
      5        Concrete #1        CO1           8         EX1           SS 1
      6        Concrete #2        CO2          12         EX2           SS 1
      7        Concrete #3        CO3           6         EX3           SS 1
      8        Finishing          FIN           2         CO1           FS5
                                                          CO2           FS5
                                                          CO3           FS5

2- Resource List:
 Resource     Resources description             Unit       Limits/day       Price
    code                                                  Norm. Max.      LE/unit
L01         Excavation worker                  md           3       6     40
L02              Concrete worker               md           6       12    60
E01              Excavator                     eqd          1        2    400
E02              Concrete mixer                eqd          1        2    500
M01              Concrete material             m3           -        -    500
          md = man-day                eqd = Equipment day

3- Resource Allocation:
                                                     Resource/day
          Activity                      ID
                                                     1           2             3
          1          Mobilization       MOB          L01, 2
          2          Excavation # 1     EX1          L01, 3      E01, 1
          3          Excavation # 2     EX2          L01, 3      E01, 1
          4          Excavation # 3     EX3          L01, 3      E01, 1
          5          Concrete # 1       CO1          L02, 6      E02, 1        M01, 40
          6          Concrete # 2       CO2          L02, 6      E02, 1        M01, 50
          7          Concrete # 3       CO3          L02, 6      E02, 1        M01, 40


Global PE – Dr. Attia Gomaa
                             AUC- Engineering Services
     8           Finishing          FIN        L02, 3

4- Base Calendar (Working periods)
   Saturday Sunday Monday Tuesday                Wednesday    Thursday   Friday
       X        X        X         X                 X            X
                                                               1/01/04
                        Holidays:    20 to 21 Jan. 2004

Actual production:

                        Duration                Actual resources/day
           Activity
                         (day)              1             2           3
           MOB             1              L01, 2
           EX1             2              L01, 2        E01, 1
           EX2             4              L01, 2        E01, 1
           EX3             2              L01, 3        E01, 1
           CO1             7              L02, 6        E02, 1      M01, 35
           CO2             13             L02, 7        E02, 1      M01, 45
           CO3             7              L02, 5        E02, 1      M01, 45
           FIN             3              L02, 4

     Actual duration: 31 day

Based on these data, construct the following:
1. Target plans (schedule, resource profiles, cost profile, and S-curve).
2. Follow-up indicators
3. Performance evaluation indicators
4. Productivity analysis indicators
5. Conclusion.




Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services
M-3-6-2- Maintenance performance evaluation (Target/ Actual)

I- Module Input Forms:
The yearly PM programs information for six similar gas turbines in a power station
are as follows:

                    Maintenance levels per gas turbine
   PM Type          Frequency       Duration      No. of     Spare parts Cost
                                      (day)     Workers           $1000
Y – Level 1           Yearly            15          20              10
S  – Level 2        6 Monthly           10          20              8
3M – Level 3        3 Monthly            5          15              5
M – Level 4          Monthly             2          10              2
     • Gas turbine operating conditions: 24 hour/day
     • Workers operating conditions: 300 day/year & 8 hour/day
     • Average effort of CM = 380 man-day per gas turbine
     • Average annual spare parts CM cost = $ 12000 per gas turbine
     • Average CM downtime = 15 days/year per gas turbine
     • Average downtime cost rate = $ 1000 per day
     • Average labor cost rate = $ 10 per man-day
     • Overhead cost = 25 % direct cost (spare parts & labor)

Actual work performed:
    • Total labor force = 30 workers
    • Annual spare parts cost = $ 360,000
    • Average down time = 70 day/year per gas turbine

Based on these data, determine the different performance evaluation indicators
for the maintenance system.




Global PE – Dr. Attia Gomaa
                             AUC- Engineering Services
M-3-6-2- Maintenance performance evaluation (Target/ Actual)

The yearly PM programs information for six similar gas turbines in a power station
are as follows:

Target work performed:
Item                                     PM            CM            Total
Total labor force (worker)               18            7             25
Annual spare parts cost ($1000)          264           72            336
Annual labor cost ($1000)                --            --            75
Overhead cost ($1000)                    --            --            514
Average down time                        51            15            66
(day/year per gas turbine)

      Average downtime cost rate = $ 1000 per day


Actual work performed:
Item                                     PM            CM            Total
Total labor force (worker)               20            10            30
Annual spare parts cost ($1000)          300           100           400
Annual labor cost ($1000)                --            --            80
Overhead cost ($1000)                    --            --            520
Average down time                        45            5             50
(day/year per gas turbine)

Based on these data, determine the different performance evaluation indicators
for the maintenance system.




Global PE – Dr. Attia Gomaa
                             AUC- Engineering Services
M-3-6-2- Maintenance performance evaluation (Target/ Actual)

The six-monthly maintenance costs ($1000) for a productive system are as follows:

Target Costs:
                                               Month #
    Cost item
                      Jan      Feb      Mar     Apr        May       Jun      Jly
PM Cost:
    Spar parts     100       100      100       100      100      100       100
    Labor           50        50       50        50       50       50        50
CM Cost:
    Spar parts     200       200      200       200      200      200       200
    Labor          150       150      150       150      150      150       150
DT Cost            300       300      300       300      300      300       300


Actual Costs:
                   Month #
Cost item
                   Jan     Feb        Mar       Apr      May      Jun       Jly
PM Cost:
    Spar parts     23        38       49        56       68       65        54
    Labor          32        65       96        94       94       90        72
CM Cost:
    Spar parts     231       213      181       185      199      196       157
    Labor          503       370      293       164      201      193       142
DT Cost            407       397      320       290      330      320       362

Based on these data, determine the different performance evaluation indicators
for the maintenance system.




Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services

M-3-6-3- Maintenance performance evaluation (Target/ Actual)

         Monthly Maintenance Plan for Wire Production Line (1 Jan. 2004)


 ∅9                   ∅6                      ∅3                    ∅2
              W01                  W02                        W03



1- Activity List

                                                                            Relations
                                                   Duration
  Activity                               ID                     Predece    (SS, FS, FF,
                                                    (day)
                                                                 ssors       and SF)
  1   Preparation                       PRP           2            -             -
  2   Mechanical maintenance # 01       MM1           7          PRP             -
  3   Electrical maintenance # 01       EM1           9          MM1           SS 3
  4   Mechanical maintenance # 02       MM2           6          PRP             -
  5   Electrical maintenance # 02       EM2           8          MM2           SS 2
  6   Mechanical maintenance # 03       MM3           5          PRP             -
  7   Electrical maintenance # 03       EM3           7          MM3           SS 2
  8   Setup                                                      EM1
                                        STP           1          EM2            -
                                                                 EM3


2- Resource List

   Resource                                             Limits/day          Price
                Resources description         Unit
    Code                                              Norm.    Max.        LE/unit
     L01       Mechanical worker              md        3        6           40
      L02      Electrical worker              md          4         8         60
      SPS      Spare parts & supplies         cost        -         -        1000




Global PE – Dr. Attia Gomaa
                              AUC- Engineering Services
3- Resource Allocation
                                                               Resource
     Activity                                 ID                            SPS
                                                     L01/day   L02/day
                                                                           (Total)
      1    Preparation                      PRP          2        1          1
      2    Mechanical maintenance # 01      MM1          4        -          3
      3    Electrical maintenance # 01      EM1          -        5          4
      4    Mechanical maintenance # 02      MM2          3        -          2
      5    Electrical maintenance # 02      EM2          -        4          3
      6    Mechanical maintenance # 03      MM3          2        -          2
      7    Electrical maintenance # 03      EM3          -        3          3
                                                         2
      8    Setup                              STP                 2           1


4- Base Calendar (Working periods)
   Saturday     Sunday     Monday   Tuesday    Wednesday     Thursday     Friday
       X           X         X         X           X             X
                                                              1/01/04
                            Holidays:   20 to 21 Jan. 2004
Actual work performed:
                                                            Actual resources
                                          Duration
                Activity                                 L01/     L02/     SPS
                                           (day)
                                                         day       day    (Total)
 PRP     Preparation                          1           2         1        1
MM1 Mechanical maintenance # 01               6           4         -        3
 EM1     Electrical maintenance # 01          9           -         4        5
MM2 Mechanical maintenance # 02               7           4         -        2
 EM2     Electrical maintenance # 02          7           -         5        3
MM3 Mechanical maintenance # 03               6           2         -        3
 EM3     Electrical maintenance # 03          7           -         3        2
 STP     Setup                                1           1         2        1
Actual duration: 31 day
Based on these data, construct the following:
     1. Target plans (schedule, resource profiles, cost profile, and S-curve).
     2. Follow-up indicators
     3. Performance evaluation indicators
     4. Productivity analysis indicators
     5. Conclusion.



Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
CASE 14-

The monthly production plan and the actual production in ABC Company
are as follows:

 Work      Production Plan (Jan. 2001)      Actual production (Jan. 2001)
order #    Planned        Estimated          Actual          Actual
           quantity        Material         quantity    material quantity
             (ton)      quantity (ton)        (ton)            (ton)
  A11         40              60               40               63
  A12         30              40               20               40
  A13         50              65               40               62
  A14         20              25               10               22
  A15         20              30               20               27

Based on these data, determine the different control indicators.

CASE 12-

The monthly production plan and the actual production in ABC Company
are as follows:

 Work      Production Plan (Jan. 2001)     Actual production (Jan. 2001)
order #     Planned        Estimated         Actual           Actual
            quantity      Production        quantity     production date
              (ton)           date            (ton)
  A11          40          1 to 9 Jan.         40          1 to 8 Jan.
  A12          30         7 to 13 Jan.         20          8 to 14 Jan.
  A13          50        11 to 20 Jan.         40         12 to 22 Jan.
  A14          20        20 to 25 Jan.         10         23 to 28 Jan.
  A15          20        25 to 30 Jan.         20         26 to 31 Jan.

Based on these data, determine the different control indicators.



Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
CASE 15-

The monthly production plan and the actual production in ABC Company
are as follows:

 Work      Production Plan (Jan. 2001)    Actual production (Jan. 2001)
order #      Planned        Estimated        Actual          Actual
           quantity (ton)     Man-        quantity (ton) man-hours/ton
                            hours/ton
  A11           40              50              40                 45
  A12           30              60              20                 58
  A13           50              45              40                 48
  A14           20              43              10                 45
  A15           20              48              20                 50

Based on these data, determine the different control indicators.


CASE 14-

The annual budget and the actual cost for a production department are as
follows:

                             Budget                     Actual
    Cost item          Current     Year to        Current      Year to
                       month         date         month         date
   Direct labor         5000        70000          4000        60000
  Indirect labor        4936        53834          3111        48834
 Direct materials       1000        10000           400         5000
Indirect materials      808          8565           232         4711

Based on these data, determine the different cost indicators for this
department?



Global PE – Dr. Attia Gomaa
                                 AUC- Engineering Services
 CASE 16-

 The monthly production plan and the actual production are as follows:

                         Production Plan (Jan. 2001)

Activity   Planned    Standard    Planned      Target     Estimated     Estimated
  ID       quantity     cost       period       date      manpower       material
            (ton)      ($/ton)     (day)     Jan. 2001     (man-         quantity
                                                          hour/ton)       (ton)
 A01          40       1000         10        1 to 11         50            52
 A02          30       1200          6         3 to 9         60            45
 A03          50       900           9        11 to 20        45            70
 A04          20       850           6        20 to 26        40            24
 A05          20       950           5        25 to 30        48            26


                        Actual Production (Jan. 2001)

Activity    Actual    Actual      Actual     Actual     Actual      Actual material
  ID       quantity    cost       period      date     manpower        quantity
             (ton)    ($/ton)     (day)       Jan.   (man-hour/ton)     (ton)
  A01          40      1100         9       2 to 11       70              56
  A02          20      1200         5        3 to 8       60              28
  A03          40      1000         8       12 to 20      50              60
  A04          10       800         3       20 to 23      35              13
  A05          20       900         6       25 to 31      45              28

 Based on these data, determine the different control indicators.




 Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
 CASE 17-

 The three monthly production plan and the actual production for an
 Egyptian foundry are as follows:

            Three Monthly Production Plan (Year 2001)
Month    Planned        Standard     Estimated          Estimated
         quantity       cost         manpower           material
         (ton)          (1000 $)     (man-hour)         quantity (ton)
January 160             157          7810               217
February 140            139          7000               190
March    180            180          8500               250


           Three Monthly Actual Production (Year 2001)
Month    Actual         Actual       Actual             Actual
         quantity       cost         Manpower           material
         (ton)          (1000 $)     (man-hour)         quantity (ton)
January 130             134          7250               185
February 128            126          6900               180
March    175            177          8400               240

 Based on these data, determine the different control indicators.




 Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services
CASE 18-

The annual budget and the actual cost for a production department are as
follows:

                                Budget                Actual
          Item             Current  Year to     Current    Year to
                           month       date     month        date
Production quantity          50        650        40         550
(ton)
Labor rate ($/ton)             100     105        102        105
Indirect labor                1000   11000       1500       13000
Material quantity (ton)        70      800        40          600
Material price ($/ton)         300     290        302         295
Indirect materials            1000    9000        600        6000

Based on these data, determine the different cost performance indicators
for this department?

CASE 18-

The annual material requirements plan and the actual needed for a
production department are as follows:
                    Plan (Jan. 2001)          Actual (Jan. 2001)
  Material      Planned      Standard cost    Actual     Actual cost
    Code        quantity        ($/unit)     quantity      ($/unit)
                 (unit)                       (unit)
    1001          100            1000          120          1100
    1002          500            1200          450          1300
    1003          800             500          900           480
    1004          100             250            -            -
    1005            -              -            90           300
Based on these data, determine the different cost performance indicators
for this department?


Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
CASE 19-

The annual spare parts plan and the actual needed for a maintenance
department are as follows:

Spare             Plan                           Actual
parts Planned quantity Standard      Actual quantity    Actual cost
Code       (unit)      cost ($/unit)     (unit)          ($/unit)
2001        200             10            220               12
2002        600             12            550               13
2003        900             50            900               48
2004       1000             25              -                -
2005        500             10            100               8

Based on these data, determine the different cost performance indicators
for this department?


CASE 20-

The annual overhaul plan and the actual overhauls for a maintenance
department are as follows:

                       Annual overhaul plan         Actual overhauls
Machine type            M/c    Average time     M/c         Average time
                      numbers man-hour/Mc.    Numbers      man-hour/Mc.
Gas turbines 50 MW       6          500          4              600
Gas turbines 100 MW      4          800          3              750
Gas turbines 120 MW      1         1000          1              1200

Based on these data, determine the different cost performance indicators
for this department?




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
CASE 21-

Monthly production information on Foundry Shop FS510 was
as follows:

                    Item                           Jan.   Feb.
                                                   2004   2004
Working days                                        31     28
Standard production rate (ton/hr)                   8      8
Average daily time (hr/day)                         24     24
Average down time (hr/day)                          6      4
Average standby (hr/day)                            3      3
Average target quantity (ton/day)                  120    136
Average actual quantity (ton/day)                   80    105
Average sound quantity (ton/day)                    70     98
Average defect quantity (ton/day)                   10     7
Average energy consumption                          49     67
(1000 kwh/day)
Material cost (1000 L.E/day)                       100    130


   Based on these data, determine the different PE indicators for the
                              productive system.




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services

                          Basic data
 Item                           Jan 04   Feb 04   Feb. / Jan.
Production rate (ton/hr)        8        8        100 %
Total time (hr/day)             24       24       100 %
 Average down time (hr/day)     6        4        67 %
Average available time (hr)     18       20       111 %
Average standby (hr/day)        3        3        100 %
 Average used time (hr/day)     15       17       113 %
Average target quantity         120      136      113 %
(ton/day)
Average actual quantity         80       105      125 %
(ton/day)
Average sound quantity          70       98       129 %
(ton/day)
Average defect quantity         10       7        64 %
(ton/day)                       (14%)    (7%)
Energy productivity (kwh/ton) 700        684      98 %
Material productivity (1000     1429     1326     92 %
L.E/ton)




 Global PE – Dr. Attia Gomaa
                          AUC- Engineering Services


                    Performance Evaluation
     Indicator       January       February           Feb. /
                     2004          2004               Jan.
Availability         18/24= 75 % 20/24= 83 %          111 %

Performance         80/120= 67 % 105/136= 77 115 %
   efficiency                    %
Quality rate        70/80= 88 % 98/105= 93 % 106 %

Utilization ratio   15/18= 83 %     17/20= 85 %       102 %

Uptime (hr/day)     70/8= 8.75      98/8= 12.25       140 %

Uptime ratio        8.75/15= 49% 12.25/17=72          147 %
                                 %

OEE                 44 %            60 %              136 %

TEEP                37 %            51 %              138 %

NEE                 29 %            52 %              179 %

Energy              700             684               98 %
productivity
(kwh/ton)
Material            1429            1326              92 %
productivity
(1000 L.E/ton)



 Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
CASE 22-

The six-monthly maintenance costs ($1000) for a productive
system are as follows:

Target Costs:
                                 Month #
 Cost item
                Jan    Feb    Mar Apr May           Jun   Jly
PM Cost:
 Spar parts     100    100    100   100    100      100   100
 Labor          50     50     50     50    50       50    50
CM Cost:
 Spar parts     200    200    200   200    200      200   200
 Labor          150    150    150   150    150      150   150
DT Cost         300    300    300   300    300      300   300

Actual Costs:
                                 Month #
 Cost item
                Jan    Feb    Mar Apr May           Jun   Jly
PM Cost:
 Spar parts    23     38      49    56    68        65    54
 Labor         32     65      96    94    94        90    72
CM Cost:
 Spar parts    231    213     181   185   199       196   157
 Labor         503    370     293   164   201       193   142
DT Cost        407    397     320   290   330       320   362

Based on these data, determine the different performance
evaluation indicators for the maintenance system.



Global PE – Dr. Attia Gomaa
                           AUC- Engineering Services
Target:
                                    Month #
Cost item
            Jan     Feb    Mar    Apr May      Jun      Jly Total
PM Cost      150     150    150    150 150      150     150 1050
CM Cost      350     350    350    350 350      350     350 2450
TM Cost      800     800    800    800 800      800     800 5600
DT Cost      300     300    300    300 300      300     300 2100
TM+DT       1100    1100   1100   1100 1100    1100    1100 7700
PM/TM       0.14    0.14   0.14   0.14 0.14    0.14    0.14 0.955
CM/PM       2.33    2.33   2.33   2.33 2.33    2.33    2.33 16.33

Actual:
                                    Month #
Cost item
              Jan Feb Mar          Apr May      Jun      Jly   Total
PM Cost        55  103 145          150 162      155     126    896
CM Cost       734  583 474          349 400      369     299   3208
TM Cost      1196 1083 939          789 892     864      787   6550
DT Cost       407  397 320          290 330      320     362   2426
TM+DT        1603 1480 1259        1079 1222    1184    1149   8976
PM/TM        0.05 0.10 0.15        0.19 0.18    0.18    0.16   1.007
CM/PM        13.35 5.66 3.27       2.33 2.47    2.38    2.37   31.82

Change %:
                             Month #
Cost item
              Jan    Feb Mar Apr May Jun                 Jly   Total
PM Cost
CM Cost
TM Cost
DT Cost
TM+DT
PM/TM
CM/PM




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

CASE 23-

The yearly PM programs information for six similar gas
turbines in a power station are as follows:

Target work performed:
               Item                   PM       CM    Total
Total labor force (worker)             18       7      25
Annual spare parts cost ($1000)       264      72     336
Annual labor cost ($1000)              --       --     75
Overhead cost ($1000)                  --       --    514
Average down time                      51      15      66
(day/year per gas turbine)

     Average downtime cost rate = $ 1000 per day

Actual work performed:
               Item                   PM       CM    Total
Total labor force (worker)             20      10      30
Annual spare parts cost ($1000)       300      100    400
Annual labor cost ($1000)              --       --     80
Overhead cost ($1000)                  --       --    520
Average down time                      45       5      50
(day/year per gas turbine)

Based on these data, determine the different performance
evaluation indicators for the maintenance system.




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

Performance Evaluation Sheet:

                                                      Change
           Item                Target      Actual
                                                         %
Total labor force (worker)       25          30         + 20
Annual s. parts cost ($1000)     336         400        + 19
Annual labor cost ($1000)        75          80        + 6.6
Overhead cost ($1000)            514         520       + 1.2
Total m. cost ($1000)            925        1000       + 8.1
Average down time                66          50        - 24.3
Down time cost ($1000)           66          50        - 24.3

TMC + DTC                        991        1050      + 6.0
Availability %                   81.9       86.3      + 5.3
CM/PM % (labor force)           7/18 =     10/20 =    + 28.5
                                 38.9        50
CM/PM % (Spare parts)          72/264 =   100/300 =   + 22.0
                                 27.3       33.3
Overhead %                     514/411=   520/480=    - 13.6
                                 1.25       1.08

Labor productivity %            25/6=       30/6=     - 16.6
(worker/gas turbine)             4.17        5.00




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services


CASE 24-

The six-monthly maintenance costs ($1000) for a productive
system are as follows:

Target Costs:
                                  Month #
  Cost item
                 Jan   Feb    Mar  Apr May           Jun    Jly
PM Cost:
  Spar parts    100    100    100   100   100       100    100
  Labor          50     50     50    50    50        50     50
CM Cost:
  Spar parts    200    200    200   200   200       200    200
  Labor         150    150    150   150   150       150    150
DT Cost         300    300    300   300   300       300    300

Actual Costs:
                                  Month #
  Cost item
                 Jan   Feb    Mar  Apr May           Jun    Jly
PM Cost:
  Spar parts    23     38     49    56    68        65     54
  Labor         32     65     96    94    94        90     72
CM Cost:
  Spar parts    231    213    181   185   199       196    157
  Labor         503    370    293   164   201       193    142
DT Cost         407    397    320   290   330       320    362

Based on these data, determine the different performance evaluation
indicators for the maintenance system.




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services
Target:

  Cost item                        Month #
                  Jan    Feb    Mar Apr May         Jun   Jly
PM Cost         150      150    150   150   150     150   150
CM Cost         350      350    350   350   350     350   350
DT Cost         300      300    300   300   300     300   300
TM Cost         800      800    800   800   800     800   800

Actual:

                                   Month #
  Cost item
                  Jan    Feb    Mar Apr May         Jun   Jly
PM Cost           55      103   145   150   162     155   126
CM Cost          734      583   474   349   400     369   299
DT Cost          407      397   320   290   330     320   362
TM Cost         1196     1083   939   789   892     864   787




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

         Global Performance Evaluation Module
Main Inputs:
                Review information (operational P.E.)
Dimension     Item                          Per 1 Per 2 %   PE
Working       - Total monthly days
conditions    - Planned working days
              - Unplanned working days
              - Actual working days
              - Std. working hours/day
              - Overtime (man-hour)
Production    - Std. perf. rate (ton/day)
              - Actual production (ton)
              - Rejected (ton)
Critical      - Available materials (ton)
materials     - Used materials (ton)
(XXX)         - Recycle materials (ton)
Critical      - Total daily (worker)
manpower      - Average daily (worker)
(YYY)         -
Critical      - Operating units (eq.)
equipment     - Standby units (eq.)
(ZZZZ)        - Actual hours (eq.-hour)
Critical      - Std. rate (www/ton)
supplies      - Total energy (www)
(WWW)         -
Cost          - Material (1000LE)
              - Labor (1000LE)
              - Equipment (1000LE)
              - Subcontractor (1000LE)
              - Prod. overhead (1000LE)
              - Office overhead (1000LE)
              - Bonus (1000LE)
              - Total revenue (1000LE)
Others        -


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

Main Indicators:
          P.E. Report (Middle management level)

Dimension     Item                           Jan.   Feb. %   PE
Working       - Availability %
conditions    - Reliability %
              - Utilization %
              - Overtime ratio %
Production    - Performance %
              - Quality rate %
Critical      - Material utilization %
materials     - Material yield %
              -
Critical      - Manpower utilization %
manpower      -
Critical      - Equipment utilization %
equipment     -
Critical      - www utilization %
supplies      -
Cost          - Overhead ratio %
              - Bonus ratio %
              - Profit %
              - Value added ratio %
              -
Global        System:
              - Total productivity %
              - OEE %
              - OCE %
              Specific:
              - Material productivity %
              - Labor productivity %
              - Machine productivity %
              - Energy productivity %
              -


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services


KPIs report:
     P.E. Report (Top management level or System level)

Dimension     Item                           Jan.   Feb. %   PE
Cost          - Overhead ratio %
              - Bonus ratio %
              - Profit %
              - Value added ratio %
              -
Global        System:
              - Total productivity %
              - OEE %
              - OCE %

              Specific:
              - Material productivity %
              - Labor productivity %
              - Machine productivity %
              - Energy productivity %
              -

Recommendation:




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services

Real case study: Foundry department – xyz Company
             Global Performance Evaluation Module
              Review information (operational P.E.)
Dimension     Item                            Jan.   Feb. %   PE
Working       - Total monthly days            31     29
conditions    - Planned working days          25     24
              - Unplanned working days        3      2
              - Actual working days           20     21
              - Std. working hours/day        10     10
              - Overtime (man-hour)           500    600
Production    - Std. perf. rate (ton/day)     100    100
              - Actual production (ton)       1800   1700
              - Rejected (ton)                200    100
Critical      - Available materials (ton)     2500   2000
materials     - Used materials (ton)          2200   2000
              - Used alloys (ton)             20     8
              - Recycle materials (ton)       500    460
Critical      - Total daily (worker)          20     20
manpower      - Average daily (worker)        18     17
Critical      - Operating units (eq.)         2      2
equipment     - Standby units (eq.)           1      1
(furnace)     - Actual hours (eq.-hour)       180    200
Critical      - Std. energy rate (kwh/ton)    600    600
supplies      - Total energy (1000 kwh)       1400   1300
(energy)
Cost          -   Material (1000 LE)          1600   1500
              -   Labor (1000 LE)             1000   1000
              -   Equipment (1000 LE)         800    800
              -   Subcontractor (1000 LE)     200    300
              -   Prod. overhead (1000 LE)    400    300
              -   Office overhead (1000 LE)   200    200
              -   Bonus (1000 LE)             60     58
              -   Total revenue (1000 LE)     6000   6100
Others        -


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

             Project Performance Evaluation
Target Performance:
         Item                               unit     Value
         Work Schedule:
            § Excavation                    m3       3000
            § Concrete                      m3       1500
            § F-Concrete                    m3       1000
         Budget Cost:
            § Excavation                    LE/m3    5
            § Concrete                      LE/m3    100
            § F-Concrete                    LE/m3    800
         Critical equipment:
            § Excavator                     m3/day   200
            § Concrete pump                 m3/day   100
         Critical materials:
            § Cement for concrete           kg/m3    250
            § Cement for F-concrete         kg/m3    350
Actual Performance:
         Item                               unit     Value
         Work Performed:
            § Excavation                    m3       4000
            § Concrete                      m3       2000
            § F-Concrete                    m3       800
         Actual Cost:
            § Excavation                    LE       16,000
            § Concrete                      LE       180,000
            § F-Concrete                    LE       600,000
         Critical materials:
            § Available Cement              ton      800
            § Used Cement                   ton      800


Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services


Bill of Quantities:

  § BCWS = Budget Cost of Work Schedule

  § ACWP = Actual Cost of Work Performed

  § BCWP = Budget Cost of Work Performed

  § Total Variance = BCWS – ACWP

  § Cost Variance = WP (BC – AC) = BCWP – ACWP

  §   Schedule Variance = BC (WS – WP) = BCWS - BCWP

  § Schedule Late / early duration


Productivity:
  § Total Productivity %

  § Equipment Productivity %

  § Material Utilization %

  § Material Productivity %

  § Labor Productivity %




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services


    Performance evaluation for maintenance projects

Case Study:

The annual maintenance works report for a maintenance
project in XXX Company is as follows:

                                                    Year    Year
No.         Description        Type
                                                     2004   2005
      Maintenance              Engineers            16000   15000
1     manpower                 Tech.                18000   19000
      (Man-hours)              Helpers              13000   12000
                               No. of W/O            4000   6000
                               Man Hours            12000   14000
2     Actual PM
                               Duration (Hrs)        4000   5000
                               Back Log               650    600
                               No. of W/O             500    700
                               Man Hours             5000   6000
3     Actual CM
                               Duration (Hrs)         500   3000
                               Back Log               50      70
                               Planned               3500   3500
4     Total cost (1000 LE)
                               Actual                4200   4500
                               Planned               5000   5000
5     Revenue (1000 LE)
                               Actual                6000   7000

Based on these data, determine the different performance
evaluation indicators for this project.




Global PE – Dr. Attia Gomaa
                        AUC- Engineering Services

Performance evaluation for maintenance projects:
            KPI                    Type          2004   2005   PE
                              No. of W/O
                              Man-hours
 1- CM / PM
                              Duration (Hrs)
                              Overall (10-20%)
 2- Utilization                   (50-60%)
 3- Quality Rate                  (80-90%)
 4- Reliability                   (80-90 %)
 5- OCE                           (30- 40%)
 6- Performance Rate              Planned
  ( L.E / man-hour)                Actual


• CM/PM Overall =
         10 X No of WO X man-hours X Durations

• Utilization =
   Total Work orders man-hours / Total Available man-hours

• Quality Rate =
               (No of PM) / (No of PM + No of CM)

• Reliability =
      (PM man-hours) / (PM man-hours + CM man-hours)

• Overall Craft Effectiveness =
             Utilization X Quality Rate X Reliability

• Performance rate =
                 Revenue / total man-hours


Global PE – Dr. Attia Gomaa
                            AUC- Engineering Services

                                 Exam
    Please attempts all questions - No. of questions 4 – No. of Pages 3
Q1:
The monthly civil works report for a civil project in ABC Company is as
follows:
Target Performance:
           Item                                       unit        Value
           Work Schedule:
              § Excavation                            m3          3000
              § Concrete                              m3          1500
              § F-Concrete                            m3          1000
           Budget Cost:
              § Excavation                            LE/m3       5
              § Concrete                              LE/m3       100
              § F-Concrete                            LE/m3       800
           Critical equipment:
              § Excavator                             m3/day      200
              § Concrete pump                         m3/day      100
           Critical materials:
              § Cement for concrete                   kg/m3       250
              § Cement for F-concrete                 kg/m3       350
Actual Performance:
           Item                                       unit        Value
           Work Performed:
              § Excavation                            m3          4000
              § Concrete                              m3          2000
              § F-Concrete                            m3          800
           Actual Cost:
              § Excavation                            LE          16,000
              § Concrete                              LE          180,000
              § F-Concrete                            LE          600,000
           Critical materials:
              § Available Cement                      ton         800
              § Used Cement                           ton         800
Based on these data, determine the different performance evaluation
indicators for this project.



Global PE – Dr. Attia Gomaa
                             AUC- Engineering Services
Q2:

The monthly production report for an Egyptian foundry is as follows:

                                               Year 2001         Year 2000
           Indicator             Unit      January Year to   January Year to
                                                     date              date
Production indicators:
Planned production quantity      Ton       160     1200      120     900
Actual production quantity       Ton       130     900       110     800
Rejected quantity                Ton       10      70        8       50
Resources indicators:
Average working manpower         Man       50      52        48      50
Total manpower working time      Man-hr.   7250    51000     7000    50000
Total charge material quantity   Ton       185     1300      160     1100
Total energy consumption         K.W.H     78000   550000    75000   520000

Based on these data, determine the different performance evaluation
indicators for the production system.




Global PE – Dr. Attia Gomaa
                         AUC- Engineering Services
Q3:

The monthly production report for a machining workshop is as follows:

Dimension     Item                                  Jan.        Feb.
Working       - Total monthly days                   31         29
conditions    - Planned working days                 25         24
              - Unplanned working days               3           2
              - Actual working days                  20         21
              - Std. working hours/day               10         10
              - Overtime (man-hour)                 500         600
Production    - Std. perf. rate (ton/day)           100         100
              - Actual production (ton)            1800        1700
              - Rejected (ton)                      200         100
Cost          - Material (1000 LE)                 1600        1500
              - Labor (1000 LE)                    1000        1000
              - Equipment (1000 LE)                 800         800
              - Subcontractor (1000 LE)             200         300
              - Prod. overhead (1000 LE)            400         300
              - Office overhead (1000 LE)           200         200
              - Bonus (1000 LE)                      60         58
              - Total revenue (1000 LE)            6000        6100

Based on these data, determine the different performance evaluation
indicators for the production system.


Global PE – Dr. Attia Gomaa
                              AUC- Engineering Services
References:
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3- Elsayed and Boucher, “Analysis and Control of Production Systems”
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11- Seiford, L.M., and R.M. Thrall, “Recent Developments in DEA: The
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12- Sumanth, David J., “Productivity Engineering and Management”, McGraw-
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