Skill management and performance in production and logistics environments

Can we automatically relate performance to skills in a production or logistics line?

In Hr Intelligence, we have done this through the PSP (Performance to Skill to Performance) model, which allows us to relate skills and activities, and generate improvement plans that directly impact performance.

Skill management: the PSP (Performance to Skill to Performance) model.

PSP is an iterative model based on continuous improvement.

It starts by analyzing the performance (e.g., productivity and defects) of the operations performed on the line, analyzes the skills associated with the operations, and takes action with an improvement plan of two types:

• if performance is related to people, action is taken on a skills improvement plan (training, on-the-job training, etc.)
• if performance is not related to people, the production method is changed.

Once the improvement plan or work method change is implemented, performance is measured and the virtuous circle starts again.

Building blocks of the PSP: how it works

Performance and line structure

First we define what performance data you need to have available, for example defects (possibly associated with a measure of severity and/or cost) and productivity.

We then identify the various locations on the line and the operations that take place there and create a simple table.

If we are then able to and can associate people with the line stations during production, this will allow us to have a robust database for the improvement of all personnel.

Defects and operations

We now need to understand which operations generate the defects we find. Since some defects may be generated by more than one operation, the link we seek is probabilistic (e.g. found of defect A there is 35% probability that it was generated by an error in operation 1 and 65% probability that it was generated in operation 15).

We then construct a defect – operation – location matrix (e.g., using the FMEA or Failure Mode and Effect Analysis method).

Skills, operations improvement actions

Now it is crucial to define what competencies are needed to accomplish the operations along the various stations of the line.

We can have a more or less strong link between competency and operation (see figure) in a range from a maximum (without competency accomplishing the operation without failure is impossible) to a minimum (poka-joke type operations-which in Japanese has the meaning of “foolproof”-where you simply cannot go wrong).

If our organization is then clear on how to develop specific competencies (courses, on-the-job training, shadowing, etc.) we can create a competency table-improvement actions.

Improvement actions can be differentiated, such as by skill level, for greater effectiveness.

Identification of improvements

At this point we have all the elements for processing. We can, for example, start with defects, mapping the posts and operators that generated them. We can then identify who is making more defects than the average over a certain period of time, to apply a strategy to improve the insufficient skills and then see if (and by how much) performance improves.

The productivity figure is appropriately integrated into the model to “weigh” the defects in different production situations (I could take more time not to make mistakes but this would limit productivity).

With PSP we can score the skills of individuals-always against a group measure-and have a much more objective and timely mapping (e.g., by individual location, operation, product, etc.) of each person’s actual level of preparedness.

Alternatively, we can start with the defects that cause the greatest problems in terms of cost and/or product lead time and target our actions through economic priorities.

The realized PSP model: a concrete example

The model we created for one of our large clients in the manufacturing sector today is fully functional in stand-alone mode (Excel – Power Pivot) but can be integrated into the company’s MES so that it is constantly fed with updated data.

A key part of the model is the dashboard, which allows various measures to be represented at various levels of aggregation.

Benefits of the PSP for skills management

Through the PSP model, the work of the HR department can be substantially reduced and countless decisions can be made in an informed way, we give below just a few examples:

• Choose which person to put in each position based on demonstrated competence
• Tracking defect trends over time and deciding whether and how to intervene in training or work methods
• Create highly customized improvement plans that are measurable in terms of actual results achieved
• Evaluate personnel based on competency in an objective and highly automated manner
• Identify the most critical stations/operations and visualize their performance over time
• Isolate major defects and evaluate their effects from both a quality and cost perspective
• Compare individuals and groups to target specific actions and changes in work mode
• Measure the polyvalence rate and suggest actions to increase it with respect to performance

Conclusions

The PSP model has many potentials that can be further improved through the use of AI to analyze the available data and, for example, automatically and optimized allocation of staff across lines. In HR Intelligence, we combine data analysis with strategic vision, offering new paradigms for finding answers with real impact.