ISO 22400-1:2014

DRAFT INTERNATIONAL STANDARD ISO/DIS 22400-1
ISO/TC 184/SC 5 Secretariat: ANSI
Voting begins on Voting terminates on

2013-05-29 2013-08-29
INTERNATIONAL ORGANIZATION FOR STANDARDIZATION  •  МЕЖДУНАРОДНАЯ ОРГАНИЗАЦИЯ ПО СТАНДАРТИЗАЦИИ  •  ORGANISATION INTERNATIONALE DE NORMALISATION

Manufacturing operations management — Key performance
indicators —
Part 1:
Overview, concepts and terminology

ICS 25.040.01
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©  International Organization for Standardization, 2013

ISO/DIS 22400-1
©  ISO 2013
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ii © ISO 2013 – All rights reserved

ISO/DIS 22400-1
Contents Page
1 Scope . 1
2 Normative references . 1
3 Terms and definitions . 1
3.1 Definitions . 1
3.1.1 Capability . 1
3.1.2 Integration . 1
3.1.3 interoperability . 2
3.1.4 Key performance indicator . 2
3.1.5 Key result indicator . 2
3.1.6 Manufacturing operations management . 2
3.1.7 Manufacturing resource . 2
3.1.8 Performance indicator . 2
3.1.9 Performance measure . 2
3.2 Abbreviations . 2
4 Overview and introduction . 4
4.1 Value creation processes . 4
4.2 Collaborative manufacturing . 4
4.3 Functional and physical hierarchies . 4
4.4 Manufacturing operations management . 4
4.4.1 Categories of operations . 4
4.4.2 Activity model . 5
4.4.3 Resources . 5
4.5 Concepts of production operations . 5
4.5.1 Production methodology . 5
4.5.2 Production execution through work orders . 5
4.5.3 Physical structure . 5
4.5.4 Single product/multiple products . 6
4.6 Concepts of improvement methods . 6
4.6.1 Introduction . 6
4.7 Concepts of targets-and-measures and drivers-and-enablers . 6
5 Concept of key performance indicators . 7
5.1 What is a KPI? . 7
5.2 Criteria for KPIs . 7
5.3 Characterisation of KPIs . 7
5.3.1 General . 7
5.3.2 Content information . 7
5.3.3 Context information . 8
5.4 Types of KPIs by unit-of-measure . 9
5.5 Categories of KPIs by purpose . 9
5.6 Generating KPIs from measurements . 9
5.6.1 Elements . 9
5.6.2 Weighting . 9
5.7 Identification and selection of KPIs . 10
5.8 Structure of KPI . 10
5.9 Presentation of KPI . 10
6 Definitions and descriptions . 11
6.1 General model . 11
6.2 Table structure . 11
6.3 Elements . 11
6.4 Time models . 11
6.5 Effect model diagrams . 11
ISO/DIS 22400-1
7 Exchange and use . 13
7.1 Introduction . 13
7.2 Abstract structure to be used for exchange purposes . 13
7.2.1 KPI model . 13
8 Relationships and dependencies . 15
8.1 Introduction . 15
8.2 Model . 15
9 Completeness, compliance and conformance . 16
10 Outline of the standard . 17
Annex A (informative) Collaborative manufacturing . 18
Annex B (informative) Functional and physical hierarchies . 19
Annex C (informative) Manufacturing operations management . 21
C.1 Categories of operations . 21
C.1.1 Introduction . 21
C.1.2 Production operations domain . 21
C.1.3 Inventory handling operations domain . 21
C.1.4 Quality assurance testing operations domain . 21
C.1.5 Maintenance operations domain . 21
C.1.6 Other operations domain . 21
C.2 Activity model . 22
C.3 Resources . 22
C.4 MOM vs MES . 22
Annex D (informative) Production . 23
D.1 Production methodology . 23
D.2 Physical structure . 23
D.3 Classification by number of products . 25
Annex E (informative) Improvement methods . 26
E.1 Lean manufacturing (LM) . 26
E.2 Total productive maintenance/manufacturing (TPM) . 26
E.3 Six sigma . 26
E.4 World class manufacturing (WCM) . 26
E.5 Theory of constraints (TOC) . 26

iv © ISO 2010 – All rights reserved

ISO/DIS 22400-1
Foreword
ISO (the International Organization for Standardization) is a worldwide federation of national standards bodies
(ISO member bodies). The work of preparing International Standards is normally carried out through ISO
technical committees. Each member body interested in a subject for which a technical committee has been
established has the right to be represented on that committee. International organizations, governmental and
non-governmental, in liaison with ISO, also take part in the work. ISO collaborates closely with the
International Electrotechnical Commission (IEC) on all matters of electrotechnical standardization.
International Standards are drafted in accordance with the rules given in the ISO/IEC Directives, Part 2.
The main task of technical committees is to prepare International Standards. Draft International Standards
adopted by the technical committees are circulated to the member bodies for voting. Publication as an
International Standard requires approval by at least 75 % of the member bodies casting a vote.
Attention is drawn to the possibility that some of the elements of this document may be the subject of patent
rights. ISO shall not be held responsible for identifying any or all such patent rights.
ISO 22400-1 was prepared by Technical Committee ISO/TC 184, Automation systems and integration,
Subcommittee SC 5, Interoperability, integration and architectures of automation systems and applications.
ISO 22400 consists of the following parts, under the general title Manufacturing operations management —
Key performance indicators
Part 1: Overview, concepts and terminology
Part 2: Definitions and descriptions
Part 3: Exchange and Use
Part 4: Relationships and dependencies

ISO/DIS 22400-1
Introduction
Measure about performance enables an enterprise to quantify aspects of operations and thereby monitor the
impact of changes in operational activities. This International Standard will focus on the measure found to be
particularly meaningful for the monitoring of operational performance improvement. The performance
measures can be achieved through combining measurements from operations and forming "key performance
indicators", abbreviated as KPI. The performance they monitor is specific to identified objectives of the
enterprise and they are most useful when their values can be used to identify trends toward a particular
operational objective.
Within an enterprise, the various operations areas such as sales, manufacturing, engineering, marketing, and
other business support functions have different sets of performance indicators. These various performance
indicators are used together to monitor realization of enterprise’s business goals.
An International Standard for KPIs is beneficial for comparing enterprise operations over extended periods of
time and for comparing similar operations of enterprises within an industry.
The management of manufacturing operations is normally associated with some intermediate level within the
functional hierarchy of a manufacturing enterprise. In IEC 62264, the International Standard for Enterprise-
control system integration, the intermediate level (Level 3) is referred to as the Manufacturing Operations
Management (MOM) domain. The MOM domain, is the intermediate domain between the business domain
(level 4) and the process control domain (Level 1-2).
The KPIs defined in this standard are intended to be calculated based on data from the process control
domain (level 1-2) and to provide both the business domains and the manufacturing operations domain with
decision support information to manage the manufacturing operations domain of the enterprise.
This part of the standard (Part 1) will present Overview, concepts and Terminology for KPIs. Other parts of the
standard will cover guidelines for computing and for measuring the components of a KPI (Part 2), definitions
for the content and context of the exchange and the use of KPIs (Part 3) and specifications of relationships
and dependencies among KPIs (Part 4).
vi © ISO 2010 – All rights reserved

ISO/DIS 22400-1
Manufacturing operations management — Key performance
indicators — Part 1: Overview, concepts and terminology
1 Scope
This part of ISO 22400 specifies an industry-neutral framework for defining, composing, and using key
performance indicators (KPI) at the level of Manufacturing Operations Management. This part of the standard:
 provides an overview of what a KPI is and how KPIs can be used,
 presents concepts of relevance for working with KPIs including a criteria for constructing KPIs, and
 specifies terminology related to KPIs.
In this standard the KPIs are focused on company’s internal processes at the level of Manufacturing
Operations Management. The KPIs are, if not noted otherwise, applicable to all types of industries; batch
continuous and discrete.
2 Normative references
The following referenced documents are indispensable for the application of this document. For dated
references, only the edition cited applies. For undated references, the latest edition of the referenced
document (including any amendments) applies.
IEC 62264-1:2003, Industrial-process measurement, control and automation — Enterprise-control system
integration — Part 1: Models and terminology
IEC 62264-3:2007, Industrial-process measurement, control and automation — Enterprise-control system
integration — Part 3: Activity models of manufacturing operations management.
ISO 13053-1:2011, Quantative methods in process improvements – Six Sigma –Part1: DMAIC Methodology.
ISO 18435-1: 2009, Industrial automation systems and integration -- Diagnostics, capability assessment and
maintenance applications integration -- Part 1: Overview and general requirements
3 Terms and definitions
For the purposes of this document the following terms and definitions apply. Terms and definitions given in
IEC 62264 and ISO 18435-1 also apply and are given below for convenience.
3.1 Definitions
3.1.1 Capability
ability to perform actions
NOTE definition includes attributes on qualifications and measures of the ability, as in the definition of capacity

[IEC 62264-1:2003]
3.1.2 Integration
state or condition wherein two or more entities are able to form and be observed as a single entity which
exhibits a structure, a behavior, and a boundary that are determined by the interoperability properties of the
forming entities
ISO/DIS 22400-1
3.1.3 interoperability
state or condition wherein two or more entities are able to exchange items or information in order to perform
their respective tasks.
Note: the entities may be devices, equipment, machines, people, processes, applications, software units,
systems or enterprises. The items of exchange may be information, material, energy, control, assets, or ideas.

3.1.4 Key performance indicator
one or several related values that provide a proxy understanding of a business or manufacturing process.
3.1.5 Key result indicator
The larger set of all measures that are of importance for the current and future success of an
organization/enterprise.
3.1.6 Manufacturing operations management
activities within Level 3 of a manufacturing facility that coordinate the resources, such as, equipment,
personnel and materials within the facility
[IEC 62264-3:2007]
3.1.7 Manufacturing resource
physical or logical entity that enables a (manufacturing) process
NOTE Manufacturing resources include (but are not limited to) manufacturing assets such as equipment, machinery,
software, automation units, control devices, instrumentation, tooling, and other resources, e.g. operators, materials, fuels
and the physical plant wherein the resources are deployed.
[ISO 18435-1:2009]
3.1.8 Performance indicator
measure defined by an organization for use in determining how well it is making progress towards achieving a
particular objective
NOTE Key performance indicators are chosen by an organization based on a specific criteria determined by its mission,
operating plans and continual improvement procedures.
3.1.9 Performance measure
The term performance measure is used in two ways
1) A measure is a factor in generating an indicator; not all measures are indicators.
2) The performance can be measured by a performance indicator.
3.2 Abbreviations
KPI Key Performance Indicator
KRI Key Result Indicator
MOM Manufacturing Operations Management
PI Performance Indicator
2 © ISO 2010 – All rights reserved

ISO/DIS 22400-1
UML Unified Modeling Language
URL Uniform Resource Locator
XML eXtensible Mark-up Language
ISO/DIS 22400-1
4 Overview and introduction
4.1 Value creation processes
A process consists of a set of activities performed with a set of resources to realize a goal within a specified
timeline.
The goal of a production-oriented enterprise is to satisfy the market demand for products. The value creation
process to reach this goal needs to be conducted in a smart, safe and sustainable manner. A set of
performance indicators provides a means to evaluate the performance of the process in order to meet the
target.
Managing a value creation process implies completing the process as planned and continuously improving the
process. An appropriate set of performance indicators is used to determine if the process was completed as
planned and the goal realized as expected. Those performance measures found to be the most useful in
monitoring and evaluating improvement or degradation of performance are called "key performance
indicators" As a very rough approximation and generally speaking; key performance indicators are the 20% of
all performance measures that account for 80% of impacts from changes in operations
4.2 Collaborative manufacturing
The complete value creation process is both external and internal. The external processes are the value chain
process, i.e., the process from suppliers to customer, and the life cycle process, i.e., the process from design
to support of a product. The internal process is the enterprise-to-plant-process, i.e., the internal process
transforming strategic enterprise decisions to operational plant actions. The internal and external value
creation processes are further explained in Annex A (Collaborative Manufacturing). This standard has its
focus on the internal processes and the internal functionalities.
4.3 Functional and physical hierarchies
The internal functionalities of an enterprise are hierarchically structured in a functional model. The different
levels in the functional hierarchy model are: business planning and logistics (level 4), manufacturing
operations management (level 3), and batch, continuous, or discrete control (level 1-2). The levels provide
different types of functionality and work in different timeframes. The Functional Hierarchy is further explained
in IEC 62264 and a brief presentation is given in Annex B (Functional and Physical Hierarchies). This
standard has its focus on the Manufacturing Operation Management level (level 3).
The equipment used in the enterprise can be structured in a hierarchical structure (ref IEC 62264-1). The
different levels are; Enterprise, Site Area, Work Cell, Work unit and lower equipment used in production. The
hierarchy is presented in Annex B (Functional and Physical Hierarchies). In this standard the term ―Operation
Cluster‖ is used as a generic term for all levels in this hierarchy.

4.4 Manufacturing operations management
4.4.1 Categories of operations
The domain of manufacturing operations shall be composed of the following sub-domain categories of
operations (ref IEC 62264-1):
a) production operations;
b) inventory handling operations;
c) quality assurance testing operations;
d) maintenance operations;
e) rest of the other operations categories.
4 © ISO 2010 – All rights reserved

ISO/DIS 22400-1
Each category is further detailed by an Activity Model. The categories of operations are briefly presented in
Annex C (Manufacturing Operations Management). Production operation is the main type of operation
whereas maintenance, inventory and quality could be thought of as complimentary type of operations.
4.4.2 Activity model
The Activity Model includes eight activities: detailed scheduling, dispatching, execution management,
resource management, definition management, tracking, data collection, and analysis. These activities apply
to production operations, quality operations, inventory operations and maintenance operations.
The activity model is defined in IEC 62264-3 and briefly described in Annex C (Manufacturing Operations
Management). The activity called Performance Analysis takes care of the activities related to performance
indicators e.g. definitions, calculations, presentations, and exchange of KPIs.
4.4.3 Resources
A resource is an entity that provides some or all of the capabilities required by the execution of the enterprise
activities and/or business processes. The resources involved in manufacturing operational management are;
personnel, material, equipment and process segments. (IEC 62264-1). The resources are further defined in
Annex C (Manufacturing Operations Management).
Equipment also incorporates asset management.
Material also incorporates consumable materials like energy and additives/utility.

4.5 Concepts of production operations
4.5.1 Production methodology
There are many ways of classifying an enterprise. One way is according to the industry sector the enterprise
is active within. Another way is according to the type of production process that the enterprise has. Three
main types of production processes exist; continuous, discrete and batch. There are enterprises that include
all three types of production processes and there are others that operate only one of them. It is common to
refer to a production process according to the dominant type of process. Batch, continuous and discrete
production processes are briefly described in Annex D (Production).
4.5.2 Production execution through work orders
The enterprise receives customer orders that are transformed into production orders and further refined and
regrouped (merged and/or split) into executable work orders.
 Customer order = A combination of production orders (out of scope of this standard)
 Production order= a fixed quantity of a single product (out of scope of this standard)
 Work orders = a fixed quantity of a product or sub-product /intermediate (in ISA95-Part4 this is
referred to as job order).
The concept of orders is very clear in discrete and batch production whereas it is more subtile in continuous
production processes.
4.5.3 Physical structure
The order of equipment actually used or expected to be used in the execution of a work order is called the
path. A work center is classified as single path, multiple path, or network based on its physical structure.
Regardless of which structure is used, several work orders may be in progress at the same time, multiple input
materials may be used, multiple finished materials may be generated, and production units may be shared
input material sources and production storage. More about the physical structure can be found in Annex D
(Production).
ISO/DIS 22400-1
4.5.4 Single product/multiple products
A work center may be of single product type or of multiple product type. The hardest plants to operate and
evaluate are network-structured plants with multiple products.
4.6 Concepts of improvement methods
4.6.1 Introduction
An improvement method does require an understanding of the objective through which a set of KPIs has to be
managed. This set of KPIs depends on a selection criteria that will enable the objective to be realized.
These KPIs may be associated with different manufacturing operations categories in which the measures are
further derived from concurrent processes and resources at level 2 and below (see Annex B for a description
of the levels).
The use of KPIs is only one of the potential support tools for continuous improvement, compare ISO 13053-1.
Some of the better-known methods with a focus for improvements are listed in Annex E.
4.7 Concepts of targets-and-measures and drivers-and-enablers
KPIs can be related to each other, such that the value of one KPI is based on the value of another KPI. This
relationship can be structured in a network structure that is roughly hierarchical, as illustrated in Figure 1.

Figure 1: KPI netwok structure.
The KPIs at the lowest level are derived from measurements of the processes. KPIs at higher levels are
based on the KPI values from the lower level KPIs. KPIs at higher levels are derived KPIs.
Bottom-up: There are ways to collect the measures. There are ways to aggregate measures and form KPIs.
There are ways to combine KPIs to form ―higher level‖ KPIs. There are ways to visualize the KPI also in real
time. The shorter time delay, the easier the ―process‖ is to control. A long time delay makes
...