The operating curve: a method to measure and benchmark manufacturing line productivity

Every factory needs to benchmark and track its productivity level over time to remain competitive in today's marketplace. Two fundamental indicators of factory productivity are product cycle time and asset utilization, which are mathematically related to one another. The IBM Consulting Group has developed a methodology called the Operating Curve that uses these two indicators to benchmark and predict a manufacturing line's performance. With this methodology, a line's performance over any time period is measured using two parameters: the line's overall cycle time performance and the line's overall throughput performance. Each parameter is then measured against the line's theoretical best possible performance for each metric, resulting in the line's Operating Point for the time period. These two parameters are also used to compute the line's Performance Index for the time period, a measure of the line's overall level of maturity. When applying this methodology, a line's actual performance is measured using historical data, and required future performance is estimated using data from the company's business or strategic plan. The Operating Curve methodology has been successfully applied in five of IBM's semiconductor fabricators.