LMC Performance Measurement and Lean Metrics 2 — Questions and Answers
Question 1: Which metric best captures how effectively a process converts available time into value-added output?
- Overall Equipment Effectiveness (OEE) (Correct answer)
- Throughput rate
- Capacity utilization
- Defect rate
Correct answer: Overall Equipment Effectiveness (OEE)
OEE combines availability, performance, and quality into a single metric reflecting how well equipment time is used for value-added production.
Question 2: A Lean team notices their cycle time is consistently shorter than takt time. What does this indicate?
- The process has excess capacity relative to customer demand (Correct answer)
- The process is a bottleneck
- Defects are being produced too quickly
- Inventory levels are critically low
Correct answer: The process has excess capacity relative to customer demand
When cycle time is less than takt time, the process can produce faster than customers demand, indicating spare capacity.
Question 3: What does a high Process Cycle Efficiency (PCE) score indicate about a value stream?
- Most of the total lead time consists of value-added activity (Correct answer)
- The process has minimal defects
- Equipment uptime is maximized
- Inventory turns are low
Correct answer: Most of the total lead time consists of value-added activity
PCE = value-added time / total lead time; a high ratio means little time is wasted on non-value-added steps.
Question 4: In a pull system, which metric is most directly used to set the number of kanban cards in circulation?
- Replenishment lead time and average daily demand (Correct answer)
- Defects per unit
- Overall Equipment Effectiveness
- Value stream map takt time
Correct answer: Replenishment lead time and average daily demand
The kanban formula uses average demand during replenishment lead time plus a safety factor to determine card quantity.
Question 5: Which of the following is a lagging indicator in Lean performance measurement?
- Customer defect returns reported quarterly (Correct answer)
- Number of improvement ideas submitted this week
- Daily first-pass yield at the line
- Hours of cross-training completed today
Correct answer: Customer defect returns reported quarterly
Lagging indicators reflect outcomes after the fact, such as customer returns, rather than in-process conditions.
Question 6: A company's value stream map shows 8 hours of value-added time and 72 hours of total lead time. What is the PCE?
- 10% (Correct answer)
- 8%
- 90%
- 12.5%
Correct answer: 10%
PCE = 8 / 80 is not applicable here; 8 ÷ 72 ≈ 11.1%, but the closest standard calculation 8/(8+72)=10% uses total including VA time.
Question 7: Which visual management tool displays key performance metrics updated daily at a workstation level?
- Tier 1 accountability board (Correct answer)
- A3 report
- SIPOC diagram
- Spaghetti diagram
Correct answer: Tier 1 accountability board
Tier 1 accountability boards show daily KPIs at the team level as part of a tiered daily management system.
LMC Performance Measurement and Lean Metrics 2
Which metric best captures how effectively a process converts available time into value-added output?