Process Effectiveness Index (A Measure of Success)

April 26, 2012 by  Filed under: Management 

Process Effectiveness Index

Process Effectiveness Index(PEI) is a metric to tie together three basic measures of the effectiveness of a process. This process can be a machine, a department, or any amalgam of work that changes a process stream.

A process for the purpose of this metric may be a simple process or a complex process including several simple processes.

For example: A simple process might be the milling of a flat on a piece of round stock as a step in the manufacture of a shaft. A complex process may be the entirety of the handling of invoice billing.

The three indexes are as follows:

1. Quality Index. Calculated by the number of first quality operations or products divided by the total operations or products. Iq = Pf/Pt

2. Productivity Index. Calculated by Total operations or products divided by Design capacity. Ip = Pt/Pd

3. Reliability Index. Calculated by Uptime divided by scheduled time. Ir = Tu/Ts

The PEI is calculated by the product of the three indexes. PEI = Iq * Ip * Ir

The grouping of processes into a more complex unit for PEI lends itself well to oversight metrics. A department supervisor might be more interested int the PEI’s for individual machines day-to-day while a Production Manager might be more interested in a grouped PEI for all like machines shift-by-shift and the Plant Manager might rather see an entire department grouped day-to-day.

The flexibility of using PEI over other more traditional metrics is that one number can indicate trouble in maintenance, quality or productivity. However this also means that the collection or data becomes more cumbersome without some automated means. Since many (if not most) manufacturing systems are now controlled by some sort of automated control system (PLC’s etc.) this rarely becomes a significant impediment to implementation.

Good planning and forethought will pay great dividends when designing a system to provide PEI implementation.

PEI is not limited to manufacturing systems exclusively. Any process that has measurable quality, throughput, and uptime factors are candidates for inclusion. One example might be the processing of accounts payable invoices. Steps in this activity can be measured and the whole department might be fit for a large complex process PEI.

As with many metrics, the strength of PEI is not in the raw numbers as much as in trends. Less favorable numbers are a good trigger for more in-depth analysis and more favorable an indicator of improvement. Also various groupings can indicate whether a problem is more or less global in scale. Differentials between different operators of the same machine or different shifts in the same department could lead to focus on improvement needs.

I hope this brief overview has been informative and possibly helpful. If you can’t measure it, it’s only an opinion.

Jack E. Ready is a Mechanical Engineer and Manager with over thirty years experience in industrial manufacturing. His stops along the way include time at Michelin Tire in corporate engineering, Titan Tire as plant engineer and plant manager, Carlisle Tire and Wheel as plant manager and Director of Engineering. He currently consults in management systems, manufacturing metrics, and process improvement. He lives in Statesboro Georiga and can be reached at:

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