LMC Performance Measurement and Lean Metrics 3 — Questions and Answers
Question 1: When applying the DMAIC framework, during which phase are baseline metrics first formally established?
- Measure (Correct answer)
- Define
- Analyze
- Control
Correct answer: Measure
The Measure phase collects current-state data to establish a baseline against which improvements are compared.
Question 2: A plant tracks 'escaped defects' versus 'internal defects.' Why is this distinction important in Lean metrics?
- Escaped defects directly impact customer satisfaction and carry higher cost than internally caught defects (Correct answer)
- Internal defects are ignored in lean accounting
- Escaped defects are easier to measure
- Internal defects always indicate equipment failure
Correct answer: Escaped defects directly impact customer satisfaction and carry higher cost than internally caught defects
Defects that escape to customers damage relationships and cost far more to resolve than those caught in-process.
Question 3: What is the primary purpose of a control chart in Lean performance measurement?
- To distinguish between common-cause and special-cause variation (Correct answer)
- To calculate takt time
- To map the value stream
- To track kanban card counts
Correct answer: To distinguish between common-cause and special-cause variation
Control charts use statistical limits to identify whether variation is inherent to the process or caused by an assignable event.
Question 4: A company introduces a new metric: 'Lean Savings Rate' measured in dollars saved per improvement project. What weakness does this metric have?
- It focuses on financial output and may discourage small continuous improvements with low dollar impact (Correct answer)
- It is too easy to game
- It does not align with takt time
- It measures lagging indicators only
Correct answer: It focuses on financial output and may discourage small continuous improvements with low dollar impact
Emphasizing financial savings can lead teams to ignore low-cost kaizen events that build culture and eliminate small wastes.
Question 5: Which calculation correctly determines inventory turns?
- Cost of goods sold divided by average inventory value (Correct answer)
- Average inventory divided by sales revenue
- Units produced divided by units in WIP
- Lead time divided by cycle time
Correct answer: Cost of goods sold divided by average inventory value
Inventory turns = COGS / average inventory, showing how many times inventory is sold and replaced in a period.
Question 6: In a Lean metrics hierarchy, what does 'Safety → Quality → Delivery → Cost' as a priority order signify?
- Improvements should not sacrifice safety or quality in pursuit of faster delivery or lower cost (Correct answer)
- Cost reduction is the last priority and should be ignored
- Delivery metrics are more important than quality
- Safety metrics are only tracked during audits
Correct answer: Improvements should not sacrifice safety or quality in pursuit of faster delivery or lower cost
This sequence reflects the Lean belief that fixing quality and delivery naturally drives cost reduction without compromising safety.
Question 7: A value stream produces 500 units/day with 12 defects. After a kaizen, defects drop to 3. What is the improvement in Defects Per Unit (DPU)?
- DPU improved from 0.024 to 0.006, a 75% reduction (Correct answer)
- DPU improved from 12 to 3, a 100% reduction
- DPU improved from 0.024 to 0.003, a 50% reduction
- DPU improved from 2.4% to 0.6%, a 60% reduction
Correct answer: DPU improved from 0.024 to 0.006, a 75% reduction
DPU = defects/units: 12/500=0.024 and 3/500=0.006; the reduction is (0.024-0.006)/0.024 = 75%.
LMC Performance Measurement and Lean Metrics 3
When applying the DMAIC framework, during which phase are baseline metrics first formally established?