Takt KPIs
Takt KPIs
Key performance indicators (KPI) can vary greatly by culture, type of project, needs of the company, resources, and so on but with Takt planning, the KPIs paired with the system are not that subjective. They are tied to production laws and the way the system works. By tracking the KPIs, you are also recovering the project. They do not simply put you into a “push” mindset that causes bad behavior. Here are the Takt KPIs we recommend as of this writing:
Roadblock Removal Average (RRA): Clearing roadblocks is paramount with Takt planning. Removing roadblocks ahead of the work is the name of the game. When a roadblock is removed days ahead of the current date, it is recorded as it gets removed. A weekly or daily average can be calculated from that data by trade foremen, superintendents, or the project team. This is a leading indicator that shows the distance ahead where we are clearing roadblocks and making the work ready. Preparing the work is one of the greatest indicators of how well we are doing and our ability to track to the plan. The roadblock in the work package or step is being removed and can be recorded by entering how many days ahead it is being removed and the date it would impact the flow of work. The numbers recorded in this tracking will allow us to do the following:
- Know how many roadblocks we have at one time.
- See how many were removed before they could have affected the work.
- Realize the average days ahead we are removing roadblocks. If we remove roadblocks after the needed date, we log that as a negative number.
The ideal metric for this is over 15 working days.
Note: We are striving to reduce the latency between finding and solving problems
Takt increases the long-term accuracy of the plan due to the focus on what will need to happen and not what might happen. That is the difference between Takt and CPM. Takt identifies what will need to take place to create flow. CPM guesses what might happen. This difference is important because we handle both differently. When an interruption happens in CPM, we simply make another projection of what might happen and this can have an almost infinite number of variations. With Takt, there are only a few right ways to maintain flow and so the dates must be held and work prepared.
The difference between Takt and CPM:
Takt – It is a scientific projection of what we will have to do to create flow and knowing what we have to do to create flow and follow the production laws.
CPM – Guessing what might happen and not knowing what we have to do to create flow and most of the time ending up fighting the production laws.
KPI:
Measurement: The average time roadblocks are removed before they impact the flow of work.
Target: Over 15 working days.
Negotiations with Current Partner (NCP): This is a measurement of how many times a performing contractor had to negotiate re-entry into a space where work was unfinished but ready for the next trade partner. This includes non-planned come-back work, unfinished work steps, or rework. To calculate this, we ask trades the number of instances that occurred in a Takt time scale per Takt wagon. The number is counted and compared with the number of Takt wagons in the current time scale. The number of NCPs should be less than 20% of the number of Takt wagons in the current Takt time scale.
KPI:
Measurement: The number of times a trade had to negotiate re-entry into an area where their process has been completed. The number of times is divided by the total number of Takt wagons in that week’s Takt time scale.
Target: <20%
Perfect Handoff Percentage (PHP): The number of times a trade partner successfully completes the scope of work and hands off a perfectly clean space in comparison to the total number of handoffs. This begins to measure the reliability of our trade partner commitments. The target for this is over 85%. Over 85% of the handoffs should be perfect.
KPI:
Measurement: The number of times a trade handed off the Takt zone area perfectly to the next trades per the Takt time.
Target: >80%
Remaining Buffer Rate (RBR): The amount of buffer that is still remaining in the Takt plan. This could be measured in three different ways with capacity (cRBR), material inventory (iRBR), and/or remaining time ratio (tRBR).
cRBR (capacity remaining buffer rate)- This is calculated by taking one representative Takt sequence and dividing the average amount of time each Takt wagon takes by Takt time (Takt time scale) to complete the work in comparison to how much time is available. The average should be below 90% whenever measured.
KPI:
Measurement: Average duration Takt wagons in a sequence/average available duration = capacity remaining buffer rate
Target: Average <90%
iRBR (inventory remaining buffer rate): This is calculated by counting the number of work packages on a project site at any given time and the number of areas in the Takt phase that need those work packages. When dividing the number of available work packages and the number of available areas, the target ratio should be 85% to 95%.
KPI:
Measurement: Total number of work packages/Takt zones = material inventory remaining buffer rate
Target: Between 85% and 95%
tRBR (time remaining buffer ratio): The time RBR is a bit different than the others because this is a ratio. The tRBR is calculated by taking the remaining end buffer divided by the original calculated end buffer (CEB). This will produce a percentage. Additionally, you will divide the current remaining days by the original contract number of days and obtain a percentage. The percentage of remaining buffer should be greater than the percentage of remaining days. This shows if you are burning buffers at a slower rate than finishing the actual value add work.
KPI:
Measurement: (current end buffer/original end buffer)/(remaining duration/original duration ) = tRBR
Target: Should be > 1.0
STA Elementary Classroom Clarity (ECC): This is a measurement of whether a local third-grade class can understand what is happening on your project site. To measure this you can take 3rd graders and ask them how much of the plan they understand or ask the team to grade the plan on a percentage basis using the same parameters. The ideal target is over 80%.
KPI:
Measurement: The percentage of the plan a 3rd grader understands of the overall project plan on a macro level.
Target: >80%
These KPIs can be tracked throughout the project and in whatever format you are using. And again, as you track them, they also inherently drive project success by following Little’s Law, the Law of Bottlenecks, The Law of the Effect of Variation, and Kingman’s Formula. We would rather you have KPIs that work with production laws than metrics that fight against them. We find Takt to be the only system and way to track and drive production based on these laws and theories studied in all industries and sectors. When a Takt wagon pushes past the stage indicator, the Takt phase is then optimized in a flow. The only recovery options available are to reduce batch sizes, limit work in process, optimize processes, better prepare work, or separate work as a segmented phase. The path remains the same so there is little or no variation keeping the project stable as a constant and not something we allow. Takt KPIs are virtuous in that they naturally obey law. This takes us to our next subject. Let’s talk about…