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Level 2 indicators - Value Tree
Variable Unit Cost
Objective
Measure the variable unit cost per ton.
Definition 
See in relevant sections for a definition of those 2 elements.
In EUR or legal entity currency
Calculation
Calculation formula in the EXCEL spreadsheet
Comments
The full variable cost includes Upstream CNP & Depreciation.
FULL VARIABLE COST = CP at origin ("pure CP") + CNP Upstream + DEP Upstream
Variable cost (CP)
Objective
Measure the total variable cost per Value Stream.
Definition
The VS variable costs are composed by the variable costs elements from RCS which are:
- The material variable elements: Raw material at a VS perimeter (incl. raw mat. supplied by other Rhodia VS) + packaging
- The activities variable elements
- Tolling and other manufacturing outsourcing.
- In EUR or legal entity currency
Calculation
The variable costs are coming from the process orders or purchase orders (MM tolling) of the materials produced in the VS:
...
- RM, Pack & utilities: monthly semi-standard price (cf related procedure in intranet finance)
- Tolling: Invoiced amount (or receipt amount if not yet invoiced)
Good practice to obtain accurate actual costs
In order to obtain the more accurate actual costs and therefore the minimum variance, the following key principles must be applied:
- Productions & Consumptions: weekly analysis of production costs and variances (ZWPP40A) and relevant corrections of process orders.
- Utilities : monthly analysis and updating of at least one process order
- Utility & waste Prices: The semi-standard prices must updated on a regular basis and especially in case of important variance
Comments
The full variable cost includes Upstream CNP & Depreciation.
FULL VARIABLE COST = CP at origin ("pure CP") + CNP Upstream + DEP Upstream
Fixed costs (CNP)
Objective
Measure the non-proportional costs of the value Stream
Definition
Fixed costs from direct production costs centers, with possible allocation to several Value Streams.
The actual CNP are identified through a cost element belonging to the element group ZRCS-AC (highest level in CNP element hierarchy).
The direct production costs centers are defined in the FUNCT0 hierarchy of the controlling area according to RHODIA costing rules.
In EUR or legal entity currency
Calculation
The sites direct production costs centers are labeled or not "multivs":
...
Allocation key calculation:
The fixed costs distribution per VS is based on the absorption by the materials produced (process orders). The reference is the cumulated end of period cost centers amount per VS (total costs x % allocated to VS).
The monthly amount allocated to the VS is equal to the difference between last month cumulated amount vs. current month cumulated amount.
Comments
- See Appendix 1 for detailed analysis.
- This way of calculating the key, based on the end of period cumulated amount, might generate negative amount for a VS for a given month.
Absorbed fixed costs
Objective
Measure the fixed costs absorption
Definition
Fixed costs are absorbed through:
...
In EUR or legal entity currency
Calculation
The absorbed actual CNP are identified through a cost element belonging to the element group ZRCS-ABCNP.
Same calculation as for fixed costs with same VS allocation key.
Depreciation (AMO)
Objective
Measure the depreciation associated to the Value Stream
Definition
The depreciation costs (AMO) are identified through a cost element belonging to the element group ZRCS-ACAMO (highest level in AMO element hierarchy).
In EUR or legal entity currency
Calculation
Same calculation as for fixed costs with same VS allocation key.
Absorbed depreciation
Objective
Measure the absorption of the depreciation associated to the Value Stream
Definition
The absorbed depreciation (AMO) are identified through a cost element belonging to the element group ZRCS-ACAMO (highest level in AMO element hierarchy).
In EUR or legal entity currency
Calculation
Same calculation as for fixed costs with same allocation key.
Manufacturing cost
Objective
Measure the manufacturing costs
Definition
Manufacturing costs = variable costs - Full + fixed costs + depreciation
In EUR or legal entity currency
Calculation
Calculation formula in EXCEL spreadsheet
Freight cost
Objective
Measure the delivery costs to the final customer from the manufacturing site.
Definition
Amount of the relevant freight cost issued with the order (to final or to distribution center). In EUR or legal entity currency
Calculation
The allocation of freight costs to the relevant VS is made through the articles associated to the freight order (all distribution costs not included in freight order are not taken into account in the current calculation).
The transfer orders from RHODIA to RHODIA are not considered (as the corresponding amount is included in the CP of the relevant plant)
Comments
The detailed analysis is to be done in BW TRANSPORT.
To be added : transport types taken into account.
Delivered costs
Objective
Measure the delivered product costs
Definition
Delivered costs = Manufacturing costs + freight costs
In EUR or legal entity currency
Calculation
EXCEL Spreadsheet
Production of the VS
Objective
Measure the tonnage produced by the Value Stream.
Definition
The Value Stream production is the total amount of all its constituent articles produced minus what is consumed inside the VS (which is called "neutralization of the productions at the VS perimeter).
By default, all the articles for which there are production movements (including sub-product, waste) are taken into account to calculate total volume produced by the VS.
If some of them should not be considered in this ratio, they need to be marked specifically (in BW) to be excluded from the calculation base.
A User Request must be created by the relevant site key user.
Calculation
Based on inventory movements linked to process orders.
See detailed calculation in Appendix 3.
Comments
Detailed analysis is to be done with the workbook "BW – Production by material" in "BW – Monitoring value stream" ("End user analysis" folder).
Neutralisation process
This document is an example of the neutralization process and is not representative of all movement codes.
Need to add neutralisation document
Unit Manufacturing cost
Objective
measure the unit manufacturing cost per ton of the VS mix.
Definition
Unit Manufacturing cost = Manufacturing costs / Production
In EUR / Ton or legal entity currency / Ton
Calculation
EXCEL Spreadsheet.
Unit delivered cost
Objective
Measure the unit delivered cost per ton of the VS mix.
Definition
UDC = Delivered costs / Production
In EUR / Ton or legal entity currency / Ton
Calculation
EXCEL spreadsheet.
Productivity Improvement Ratio (IPROD*)
Objective
Measure the productivity improvement in terms of unit manufacturing cost.
Definition
IPROD* is the current Month Unit Manufacturing Cost divided by last year Unit Manufacturing Cost.
Calculation
Monthly calculation
YTD calculation 
Where 
Data Source
Excel formula in level 2 datasheet
Comments
IPROD < 100% is positive (unit manufacturing cost has decreased).
Productivity Gains *
Objective
Measure savings of productivity program in terms of manufacturing costs.
Definition
Difference of Unit Manufacturing Costs between last year and current month.
Calculation
Monthly GAINPROD = (Last year Unit Manufacturing Cost - Current Month unit Manufacturing Cost) x Production of the Month
Unit Manufacturing Cost = (Fixed Cost + Variable Cost + Depreciation) / Volume
Yearly GAINPROD = (Last year Unit Manufacturing Cost - Current YTD Unit Manufacturing Cost) x (Current YTD Volume)
= Sum of monthly GAINPROD
Unit Manufacturing Cost YTD = (Fixed Cost YTD + Variable Cost YTD + Depreciation YTD) / Volume YTD
Comments
Calculation formula in excel spreadsheet at level 2.
Fixed Cost + Variable Cost + Depreciation & volume are defined in the herein relevant sections.
Inventory
Objective
Measure the valuated stock of the VS
Definition
Valuated stock: Last day of the month accounting value.
The stock material valuation is the same as in RCS, it is measured at the end of the period (last day of the month at 24h) including updates made until the uploading date (D+10). Updates, if any, after D+10, will be taken into account for the considered month at next upload (at each upload, all the previous months are updated).
The valuated stock of a Value Stream is the total valuation of its constituent articled (through the profit centers) on all the controlling areas.
Calculation
Sum of each articles value.
The level 4 of the stock is taken from the JNI dashboard allocated to the relevant VS, except the "achieved" line which is identical to the level 2 one.
Data source
- RCS for level 2 (using the BW Stocks application data(
- JNI Dashboard located in the eRoom INVENTORY STEP CHANGE for level 4.
See the OEE & JNI Value Stream dashboard upload process.
Comments
The stock value for a given plant is equal to the sum of all this plant's Value Stream stock amount for the same articles perimeter.
Nevertheless, because Value Stream can also include allocated articles from other divisions, the total stock value of a given VS can be superior to its relevant plant total one.
Level 3 - WCM Indicators
Customer complaint rate (CCR)
Objective
Measure the degree of dissatisfaction expressed by customers.
Definition
Number of customer complaints per 1000 deliveries. Notes:
- A customer is any entity receiving a delivery in response to a formal order for a given quantity of a product due on a certain date.
- A delivery is a product receipt by a customer in response to a formal order from that customer (or in response to a call-off in the case of an open order)
- A complaint is a formally registered dissatisfaction expressed by a customer which requires a response, or any returns or rejected goods
Calculation
in a given period of time
The complaints are extracted from SMART CORE tool.
The complaints are assigned to the relevant VS through the couple plant x material code, as mentioned in the complaints. The number of monthly deliveries is obtained from the Business Objects Premier Sales application.
Comments
- The detailed analysis of those complaints is to be done in SMART
- The complaints which are entered in QM are transferred in SMART
- No historical data for 2007
- When input the CCR in SMART, the zone for the material code is not always filled, therefore they can't be associated to a value stream. Up to date, the quality of the result depends of the good practice consisting in filling the material code zone in SMART and QM.
- Claims for products coming from distribution plants are assigned to the right VS (the VS that produced the material) if those products have been assigned to the right producing VS.
- General claims, that are not directly concerning a material, are not counted in the VS perimeter
- Of course CCR calculation is only possible if relevant claims were in SMART. (i.e. Brazilian claims entered in RCS are not transferred to SMART).
- CCR at the VS perimeter can be different from CCR at the plant perimeter : for a VS, the perimeter of claims can include products delivered from distribution plants to final customers.
Forecast accuracy rate (FA and FA*)
Objective
Identify and evaluate:
- our visibility on the markets (customer collaboration)
- our capacity to manage the customer demand
- our flow smoothing
- our OTIF improvement opportunity
Definition
Value, expressed as a percentage, measuring for a given period (month) gaps between sales forecasts and registered orders.
Calculation
FA calculation is made in APO at the VS perimeter. Only the monthly percentage value is uploaded in the dashboard.
Assumptions : For both FA & FA:*
...
FA
The forecast figures are the ones from the sales collaborative forecast from SMART.
FA*
The forecast figures are the ones from POST SOIP COMMITED PLAN in APO DP.
Comments
The detailed analysis of the FA / FA* ratios is to be done in BW APO, thanks to the query "ZRCS_FA_VALUE_STREAM_CORE".
Customer On Time In Full (OTIF-C)
Objective
Measure the delivery performance with respect to customer demand and engagement of Rhodia.
Definition
Proportion of deliveries from Rhodia received by customer with the confirmed quantity and quality, at the confirmed date and time.
- A customer is any entity receiving a delivery in response to a formal order for a given quantity/quality of a product or service due on a certain date.
- A delivery is a receipt by a customer in response to a formal order from that customer (or in response to a call-off for products or services in the case of an open order)
- On time corresponds to the last confirmed date to the customer. Deliveries before the date or after the date are not on time.Delivery dates can be defined with time interval (date mini, date maxi, delivery planned on a week…). Nevertheless, our practice until now in RCS is not to use the time interval.
- Requested quantity is the quantity of product confirmed to the customers.
Calculation
in in a given period of time;
With:
- Number of deliveries requested: It corresponds to the number of order lines with a Requested Date by Customer (max) (as in BO) within the period considered.
- Number of deliveries "On Time In Full": It corresponds to the number of order lines ranked On Time and In Full.
- In Full: An order line is in full if the Despatch quantity (BUQ) (as in BO) is equal to the Confirmed quantity line (BUQ) -EST- (as in BO) +/- Quantity tolerances min/max defined in the order.The quantity tolerance used corresponds to the tolerances specified in the order. By default these tolerances correspond to the tolerances defined for the material.
- On Time: An order line is on time if the Exec. date for end of Shipment (as in BO) (which corresponds to the actual date of delivery at
...
- customers’ plant) is equal to the Requested Date by Customer (max). If the Exec. Datefor end of shipment is not available, the Planned date for end of Shipment (as in BO) is used. These dates come from the Transport documents/files. No tolerances are considered. A tolerance of +/- 3 days exists for maritime shipments only. ZOR orders are considered on time.
The calculations detailed above are applied with the following criteria:
- The following commercial documents are not considered in the OTIF-C calculations:
ZL3;G2;ZG3;ZG2;L2;ZL2;B4;B3;B2;ZL4;ZG4;B1;RE;KA;KR;REB;ROB;ZDAG;ZFAC;ZKA;ZRAG;ZREB;ZROB
- Only the orders with an order flow code = C are considered.
- Orders with an order system equals to BSP400 (Bluestar system) are excluded.
- Order lines with a type code equals to ZZZZ are excluded as well.
- About the exclusions on Commercial document types, here are the details:
The OTIF-C results per value stream and material are extracted from BO Sales (CORE application). A monthly table, read by BW, is generated with the number of delivery OTIF and non OTIF by article.
The calculation at VS perimeter is done through the matching of each article to a VS.
Comments
- This indicator can be applied at different levels, e.g. for all products, for a family of products, for one particular product or for key customers. Tolerances for delivery dates and/or quantities may be integrated into the definition only if they are negotiated as part of the contract. Orders for samples should be treated in exactly the same manner as orders for products.
- No historical data for 2007
Supplier On Time in Full (OTIF-S)
Objective
Measure the delivery performance of our suppliers.
Definition
Proportion of deliveries from suppliers received by Rhodia with the requested quantity and quality, at the requested date and time
- Rhodia is an entity receiving a delivery in response to a formal order for a given quantity/quality of a product or service due on a certain date.
- A delivery is a receipt by a customer in response to a formal order from that customer (or in response to a call-off for products or services in the case of an open order)
- On time is delivery inside the time interval accepted by both customer and supplier and registered. That time interval can't be modified afterwards and should be measured with the same precision (week, day, hour…) as the order time interval.
- Requested quantity is the quantity of product that Rhodia demands.
Calculation
in a given period of time
The calculation is done in the purchasing CORE application GSV.
The deliveries considered are the one attached to an article matched to a VS. Consequently, the deliveries corresponding to purchasing orders on costs centers & on projects are excluded.
Comments
The detailed analysis is to be done in GSV.
The following types of Purchase orders are not taken into account in order to have a reliable ratio:
...
Only standard vendors are considered, as in GSV Cores queries (Info object 0ACCNT_GRPV <> Z010, supplier characteristics C_VENDOR)
Scheduling Adherence Rate (SA)
Objective
Measure the internal respect of production schedules achieved during scheduling.
Definition
Value in percentage measuring, for a given period (month), gaps between scheduled production and actual production.
Calculation
A schedule:
- Is defined by material x work-center,
- Gives for all the materials the quantities to manufacture by day,
- Should have a horizon of 7 days (Monday – Sunday)
- Should not be modified: the 7-day horizon must be fixed.
...
- Planned production sum = sum of planned production for each material x workcenter weekly scheduled from preceding week generated schedule (process orders & fixed planned orders)
- Achieved production = Quantities reported in PP for the week considered (data input could take place during the week or after the week, backdate possible)
- Deviations between Planned/Achieved quantities is done by week, by product and by work-center.
- Variances sum = sum of absolute values of differences between weekly scheduled production and actual production of the same week.
- SA is calculated only for workcenters without a schedule change. Any time there is a schedule change for one article x workcenter, the complete workcenter is excluded from SA calculation for the week considered.
Comments
- The production forecasts are stored every Sunday at midnight.
- Analysis of SA is to be done in the « Production Planning » BW application.
- Workbook calculating KPI SA with planned production fixed and work centers with fixed schedules, as explained in the definition above : RCS – Schedule Adherence (Core Workbook).
- Workbook with additional information such as excluded workcenters, exclusion cause, total plan production Other workbook: RCS – Schedule Adherence Detailed Analysis
...
- Date and qty initially scheduled modified
- Qty initially scheduled modified
- Date initially scheduled modified
- New initially scheduled order
Good practices to obtain an actual weekly production
Weekly Production is calculated from Monday 0h to Sunday 24h.
In particular, production of the week-end has to be declared with a posting date included in the WE.
See following item (extract from documentation PP_019).
Inventory TURN*
Objective
Measure the effective use of working capital (also an indicator of the efficiency of a combination of several core processes).
Definition
Inventory turns is the ratio of "annualized cost of goods sold", to the value of "total inventory on hand" for the current month. The ratio is measured in annual frequency ("X times per year")
It can be expressed in annual frequency ("x times per year").
- Cost of goods sold is defined as variable and non-variable cost of production, including depreciation
- Total inventory on hand is the value of inventory on hand which includes finished product valued at full manufacturing cost including depreciation, work in progress valued at estimated production cost, raw materials valued at purchase cost, and MRO's (spare parts) at purchase cost
Calculation
Annualized cost of goods sold is calculated every month: monthly value x 12.
Formula of YTD Turn to be added
Comments
- The manufacturing direction has validated that, contrary to what is specified on the WCM documentation, the numerator must be equal to the Value stream valued outflow
- Denominator: Values inventory of the VS
Overall Equipment Effectiveness (OEE)
Objective
Measure the technical performance and capacity utilization of a manufacturing asset and hence to judge the effectiveness with which an asset is being used to add value. It allows the analysis of all the sources of capacity losses, whatever their origin may be.
Definition
Overall Equipment Effectiveness is the ratio of actual good production (on grade products) over the production that could have been achieved in the same time period.
...
Sum of proportional part of the MDC of each monoproduct. Proportional part is the fraction of the day (theoretical time) allocated to the production of the monoproduct.
Example: 8/24 on product A, 10/24 on product B, 6/24 on product C. The MDC of A-B-C mix is equal to: MDC(A)*8/24+MDC(B)*10/24+MDC(C)*6/24.
Calculation
in the same given period of time
in the same given period of time and with following definitions:
...
It is equivalent to:
in the same given period of time.
OEE can be broken into three factors:
OEE = AVAILIBILITY x PERFORMANCE x QUALITY x 100 %
with
Comments
- The OEE ratio is taken from the OEE Dashboard associated to the VS
- The production values of the OEE dashboard are calculated at bottleneck; therefore they are different from the VS production values reported at level 2.
- Rules & recommendations concerning e-room files are in page ...
Need to add link to OEE recommendation page
Material and Energy Yield (MATY)
Objective
Measure the performance of a Value Stream through the consumption of raw materials and utilities.
Definition
Ratio of best performance of raw material and utility usage (in currency) for a process compared to actual raw material and utility usage (in currency) for the same process.
Calculation
In the same given period.
Where :
cus i, j = standard specific unit consumption of raw material and utility j to produce one ton of finished good i (units of j / ton of i).
cur i, j = actual specific unit consumption of raw material and utility j to produce one ton of finished good i (units of j / ton of i).
pricej = unit price of raw material and utility j (€/unit of j).
Ti = tons of finished good i (tons of i)
Utilities = steam, gas, nitrogen, water & electricity (RCS cost element 120)
Comments
in the same given period of time
...
In case of a new built process, we can use theoretical consumption given by the supplier or the developer. This must be done by manual calculation
Right first time (RTF)
Objective
Measure the first time conform rate of a production entity.
Definition
Percentage of first time conform produced tons over total produced tons.
- A product is conform when all characteristics (viscosity, density, color…) are within specification limits known and required by customer standards.
- RFT measures first time conformity rate: non conform units becoming conform after rework are not considered.
- When conformity is measured by production lots: conform lots are converted into conform tons for the indicator calculation.
Calculation
Comments
RCS model don't allow RFT calculation for the time being.
- ^ Intracampaign changeovers time are included in cycle time and are therefore not taken into consideration as an OEE Loss. If those intracampaign changeovers time are longer than expected, the gap should be reported in the process/operations category.
- ^ Includes the loss of rate due to activity of catalyst, poisoning, aging for semicontinuous production.
- ^ Second choice product with identified market is not considered as production loss. If it needs to be reworked to be sold, than it is Quality OEE loss.
APPENDICES – DETAILED SPECIFICATIONS
Appendix 1: Detailed spec. => Fixed cost allocation per VS
Objective:
The objective is to allocate the actual fixed costs to the VS. In case, the cost center is "multiVS", the fixed costs are distributed by VS pro-rated to the absorbed costs.
Hypothesis:
In order to smooth the seasonality & production shutdowns effect, the monthly fixed costs are calculated by comparing the end of period cumulated amount of current month vs. previous month.
There are 4 types of fixed costs:
...
Stages of loading:
1/ Extraction from ODS_CCA9 to ODS_CCVS => Load key + CNP actual + CNP absorbed + DEP actual + DEP absorbed. (Update rule between ODS_CCA9 and ODS_CCVS).
We take into account in the ODS only monthly data with cost element belonging to fixed cost cost element group.
2/ Extraction from CUB_CCA02 to ODS_CCVS => Load key + CNP Target + DEP Target. (Update rule between CUB_CCA02 and ODS_CCVS)
We take into account in the ODS only monthly data with cost element belonging to fixed cost cost element group, and type of data (0VTYPE) = 30 (target).
3/ Calculation within this ODS_CCVS of actual CNP for the VS (in proportion to the absorbed CNP) and the actual DEP for VS. (Update rule between ODS_CCVS and itself) The key is based on the cumulated amounts from the beginning of the year until the current period. That key, calculated on actual data, is used for target and actual data.
4/ Extraction from ODS_CCVS to ODS target for Value Streams _CCVS => Load key + CNP Target + DEP Target. (Update rule between CUB_CCA02 and ODS_CCVS)
We calculate monthly amount by the difference (total cumulated amount of the year minus previous total cumulated previous amount)
Appendix 2: Detailed Spec. => Variables costs (CP)
Objective :
The target is to split actual variable costs between each value stream. Variable costs are made up of several elements detailed below.
All CP elements coming from a "Z100" process order are not taken into account (info object in BW 0COORD_TYPE=Z100 for the process order); the CP individual line isn't taken into account.
Non proportional Costs of a VS:
...
« Pure Proportional costs » worked out
= CP from VS – CNP & DEP upstream stages
Appendix 3: Detailed spec. => Production
Functional description
The purpose of this FFS is to describe how to calculate key figures for production, in B/W at Value Stream level
In the first part, we will describe how to identify material that should be taken into account in the calculation of neutralized key figures for production, in B/W at Value Stream level.
In a second step, we will describe the rules production/consumption neutralisation at value stream level.
Definition: We name "VS produced material" a material that will be select in Value stream production calculation.
This list "VS produced material" is a subset of the "regular" material that are included in VS production. These "regular" material have one of the following property:
...
- C_MATPLNT__C_EXCVSF <> "X" (material not excluded from VS production).
APPENDIX 4: FA DETAILED SPECIFICATION
For the Helpdesk: Technical documentation of the FA calculated in APO.
Every 5th of each month, the FA is calculated into APO at material x plant level.
At this stage, it is not yet published to the dashboard.
Every 8th of each month, at 03:00, the result of this calculation is transferred into APO into the ZRCS_FA cube which is the cube sourced by BW dashboard.
1- To check if the calculation of the 5th was successful, log into APO WAP.
T-code : ZWFP01
Variant : ZRCS_MONTHLY
There is one process chain per enterprise.
Check that the following process chains are green:
...
2- To check if the calculation of the 5th was successful, log into APO WAP. T-code : ZWFP01
Variant : ZRCS_MONTHLY - Check that the process chain ZRCS_KPI_WCM_FA is green.
APPENDIX 5 - TURN* DETAILED SPECIFICATIONS
TURN = TURN - Consumption for production + TURN - External Sales + TURN - Sales consignment + TURN - Sales Inter company + TURN - Sales inter plant + TURN - Other issues.
1 - TURN - Consumption for production: Calculated on movement codes 261, 262, 543, 544.
2 - TURN - External Sales: Calculated on movement codes 601, 602, 453, 454.
3 - TURN - Sales Consignment:
Calculated on movement codes 633, 634.
4 - TURN - Sales Inter Company: Calculated on movement codes 643, 644, 645, 646, 675, 676, 673, 674 .
We have to include only movements where the value streams are differents (origin and destination).
Value stream are being compared between 2 plants
...