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2026Oct 22

QCDSE Manufacturing KPIs: Formulas Japanese Plants Use

Maintenance & QualityUpdated October 23, 202622 min read

The monthly report template arrives from your Japanese parent company, or from a Japanese customer's supplier quality team. The columns look familiar: first pass yield, customer ppm, OEE, on-time delivery, frequency rate, energy intensity. Then the questions start. Should reworked parts count as good? Is "frequency rate" the same as your OSHA incident rate? Why does headquarters want energy per ton every month?

A common way to organize plant key performance indicators (KPIs), and one you will often meet in Japanese reports, is QCDSE: quality, cost, delivery, safety, and environment. Within each area, you pair a results metric (what happened this month) with a leading metric (what the shop floor can change today). That structure fits a whole plant's KPIs onto one page.

The names are easy to match. The definitions are where reports go wrong. This guide gives the QCDSE KPI set with the formula for each metric, the Japanese term you will see in reports, and the places where Japanese definitions differ from what you may use. It then explains how Japanese plants set KPI targets and finishes with a definition sheet template and questions to ask the Japanese side. All worked examples use fictional numbers.

If you want to know what a Japanese plant manager does with these numbers, see Plant Manager Role in a Japanese Plant: Duties and KPIs. This article focuses on the metrics themselves: how each one is calculated and defined.

Contents
  1. The QCDSE KPI Set at a Glance
  2. Quality (Q) KPIs and Formulas
  3. Cost (C) and Productivity KPIs and Formulas
  4. Delivery (D) and Inventory KPIs and Formulas
  5. Safety (S) KPIs: Frequency Rate and Severity Rate
  6. Environment (E) KPIs and Formulas
  7. How Japanese Plants Set KPI Targets
  8. Daily, Weekly, and Monthly KPI Reviews
  9. Quick Reference: Japanese KPI Terms
  10. Template: KPI Definition Sheet
  11. Limits of This Guide
  12. FAQ
  13. Sources

The QCDSE KPI Set at a Glance

Here is the full picture. The table splits the metrics Japanese plants commonly use into the five areas, with results metrics on the left and leading metrics on the right.

Figure 1: Plant KPIs by QCDSE Area

Each area pairs results metrics with leading metrics.

Results metrics
Leading metrics (watched daily on the floor)
Q: Quality
Customer complaints, customer (outflow) defect rate in ppm, in-process defect rate
First pass yield, rework rate, process capability index, inspection findings
C: Cost and productivity
Manufacturing cost, cost variance, labor productivity
OEE, utilization, material yield, material and energy use per unit
D: Delivery and inventory
On-time delivery rate, manufacturing lead time, inventory turnover
Production plan attainment, work-in-process, late orders
S: Safety
Lost-time injuries, frequency rate, severity rate
Near-miss reports, risk assessments completed, share of findings corrected
E: Environment
Energy intensity, CO2 emissions, waste generated
Electricity and steam use by equipment, waste sorting

The split between results and leading metrics is a guide, not a rule. Choose metrics to fit your products and production method.

A KPI is a number that shows how far an important target has been reached. ISO 22400, the international standard for KPIs in manufacturing operations management, defines KPIs in the same way. Part 2 (ISO 22400-2:2014) lists KPIs in current practice together with their formulas; a white paper by the standard's editors puts the count at 34. The editors present them as candidates to choose from, not a set every plant must use. An amendment added energy management KPIs in 2017, and ISO lists the standard as under revision.

Why Japanese Plants Add Safety and Environment to QCD

Quality, cost, and delivery (QCD) are the core of production management. JIS Z 8141, the Japanese Industrial Standard for production management terms, describes production management as producing to a set quality, cost, quantity, and delivery date. QCDSE adds safety (S) and environment (E).

A plant that tracks only QCD can show better output and lower cost while safety risks and environmental impacts rise unnoticed. Keeping all five areas side by side is a check that no number is being bought at the expense of another area.

You may also see longer versions. The Japan Institute of Plant Maintenance (JIPM) groups TPM results under seven headings, PQCDSME, adding productivity (P) and morale (M). On shop-floor boards you may also see SQCDP (safety, quality, cost, delivery, people). The labels differ, but the idea is the same: split the plant into areas so nothing is missed. This guide covers productivity under cost.

Results Metrics vs. Leading Metrics

A results metric (often called a lagging indicator) is a number you only know after the month closes. Customer complaints, manufacturing cost, and frequency rate are examples. They tell you how big the problem was, but by the time you see them it is too late to change that month's result.

A leading metric moves before the result and responds to what people do on the floor. First pass yield, OEE, and the number of near-miss reports are examples. When the plant manager reviews results metrics monthly and the floor watches leading metrics daily, the monthly report gets much shorter.

Quality (Q) KPIs and Formulas

Inspector checking a machined part with a pin gauge on a granite surface plate

Japanese plants track quality in two groups: defects caught inside the plant, and defects that reached the customer. The common formulas are:

  • In-process defect rate (koteinai furyo-ritsu, 工程内不良率) = defects ÷ units inspected (or units produced)
  • First pass yield (chokko-ritsu, 直行率) = units that passed the first time without rework ÷ units started
  • Rework rate (tenaoshi-ritsu, 手直し率) = units reworked ÷ units started
  • Customer (outflow) defect rate, ppm (ryushutsu furyo-ritsu, 流出不良率) = defects found by the customer ÷ units shipped × 1,000,000
  • Material yield (budomari, 歩留り) = product output ÷ main raw material input

Watch the word "yield." JIS Z 8141 defines budomari as the ratio of product actually produced to the main raw material put in, which is a material yield. In English, "yield" is often used for good units divided by total units. First pass yield and defect rate, on the other hand, are not defined in the JIS production management terms, so each company sets its own numerator and denominator.

The ISO 22400 white paper also lists quality KPIs that match these: first pass yield, scrap ratio, and rework ratio.

Figure 2: Quality Metrics from 1,000 Units Started (Fictional Example)

The same 1,000 units give different numbers depending on what you count as "good."

Started: 1,000 unitsUnits started in one process in one month (fictional)
After inspection
Passed first time: 940Went to the next process without rework
Passed after rework: 40Passed after repair or reprocessing
Scrapped: 20Could not be reworked; handled as defects
First pass yield = 940 ÷ 1,000 = 94.0% / Rework rate = 40 ÷ 1,000 = 4.0% / Scrap rate = 20 ÷ 1,000 = 2.0%
Good-unit rate including reworked parts = (940 + 40) ÷ 1,000 = 98.0%

Numbers are fictional. Decide in writing whether reworked parts count as good.

In Figure 2, the good-unit rate is 98.0% but first pass yield is only 94.0%. The 4-point gap is what rework saved, and the labor spent on that rework goes into cost. Track both: the good-unit rate shows whether you could ship, and first pass yield shows whether you made it right the first time. Together they make causes much easier to trace.

Track defects that reach the customer both as a count and as a rate. If a plant ships 500,000 units in a year and the customer finds 15 defects, the outflow defect rate is 15 ÷ 500,000 × 1,000,000 = 30 ppm (fictional example). When shipment volume swings a lot, the count alone can make things look better or worse than they are.

To catch variation in dimensions or characteristics before defects appear, use the process capability index (Cp, Cpk) as a leading metric. It shows how much margin the process spread leaves inside the tolerance, and it helps most when defect rates are already so low that differences are hard to see.

Related: Cpk 1.33 Explained: Cp vs Cpk, Sample Size, Japanese Specs

Cost (C) and Productivity KPIs and Formulas

Accurate cost figures only come out after the monthly close. So day to day, the floor manages the physical quantities that drive cost. Figure 3 lists cost metrics alongside productivity and equipment metrics.

Figure 3: Key Cost and Productivity Metrics

Money metrics are reviewed monthly; quantity metrics daily or weekly.

Manufacturing cost
CostMaterials + labor + other expenses. Convert to cost per unit and compare with budget or last year
Cost variance
CostThe difference between standard cost and actual cost. Split by materials, labor, and expenses to see where it moved
Unit consumption
CostMaterial or energy used ÷ output. The amount used to make one unit
Labor productivity
ProductivityOutput ÷ total labor hours (physical), or value added ÷ total labor hours
Utilization
Equipment / peopleEffective operating time ÷ available time (machines) or working hours (people)
OEE
Equipment / peopleAvailability × performance × quality rate. Combines stoppage, speed, and defect losses

How costs are classified and allocated depends on each company's cost accounting rules.

Manufacturing Cost and Cost Variance

Japanese plants normally break manufacturing cost into three cost types: materials, labor, and other expenses (keihi, 経費, which covers more than overhead). This follows the classification by cost type in Japan's Cost Accounting Standards, the 1962 reference for cost accounting in Japan.

Cost variance (genka sai, 原価差異) is the gap between the standard cost set in advance and the actual cost. The Cost Accounting Standards define it, under a standard costing system, as the difference between standard cost and actual cost incurred.

The breakdown matters more than the total. Did the unit price of material go up, did usage go up, or did work take longer? Each answer calls for a different fix, so ask for the variance to be reported split into price and quantity factors. Agree in advance on the sign convention (whether a favorable variance is plus or minus); mixed conventions are a common source of misread reports.

Labor Productivity

Productivity is output divided by input. The Japan Productivity Center separates physical labor productivity, which measures output in units, from value-added labor productivity, which measures it in value added.

Take a work area that makes 12,000 units a month with 2,400 total labor hours. Physical labor productivity is 12,000 ÷ 2,400 = 5.0 units per labor hour. If value added that month is JPY 36 million, value-added labor productivity is JPY 36,000,000 ÷ 2,400 hours = JPY 15,000 per labor hour (both fictional examples).

If the product mix changes from month to month, figures converted to standard hours or value added compare better than raw unit counts.

Utilization and OEE

JIS Z 8141 defines utilization (kadoritsu, 稼働率) as the ratio of effective operating time to working hours (for people) or to available time (for machines). The same JIS gives overall equipment effectiveness (OEE, setsubi sogo koritsu, 設備総合効率) as availability × performance × quality rate.

A machine with 85% availability, 90% performance, and a 98% quality rate has an OEE of 0.85 × 0.90 × 0.98 = 0.7497, or 75.0% (fictional example). For what the three rates mean and how plant managers use OEE, see the OEE section of our plant manager guide.

Related: OEE and the 7 Big Losses vs. Six Big Losses in TPM

Do not set utilization or OEE as stand-alone targets. Making more than you can sell raises both numbers, but the extra just becomes inventory. Read equipment metrics next to inventory and delivery metrics.

Delivery (D) and Inventory KPIs and Formulas

Delivery metrics fall into two groups: whether you kept your promises to the customer, and whether you have the capacity to keep them.

  • On-time delivery rate (noki junshu-ritsu, 納期遵守率) = deliveries made by the promised date ÷ total deliveries
  • Production plan attainment (seisan keikaku tassei-ritsu, 生産計画達成率) = quantity completed as planned ÷ planned quantity
  • Manufacturing lead time = time from when material is ready to when it becomes finished product
  • Inventory turnover (zaiko kaiten-ritsu, 在庫回転率) = requirements over a period ÷ average inventory
  • Inventory turnover period = length of the period ÷ inventory turnover

If 388 of 400 deliveries in a month arrive as promised, the on-time delivery rate is 388 ÷ 400 = 97.0% (fictional example).

This metric is not defined in the JIS production management terms, and the number changes depending on whether the "promised date" is the customer's requested date or your confirmed date. Write down whether you count orders or quantities and how you treat split deliveries.

Measure production plan attainment by item. Overproducing one item can cover a shortfall in another and bring the total to 100%, but the short item still ships late. Report the total next to the share of items that hit their plan.

JIS Z 8141 defines lead time as the time from ordering to delivery, or from when material is ready to when it becomes finished product. Where you start and stop the clock changes what you fix, so agree on it first.

JIS Z 8141 describes inventory turnover as the number of times inventory turns over in a set period, calculated as requirements over the period ÷ average inventory. With annual requirements of JPY 240 million and average inventory of JPY 30 million, inventory turns 8 times a year. The same JIS treats turnover as the inverse of the turnover period, so the turnover period is 12 months ÷ 8 = 1.5 months (fictional example). Splitting it into raw materials, work-in-process, and finished goods shows where stock is piling up.

Safety (S) KPIs: Frequency Rate and Severity Rate

Worker in a hard hat standing on a walkway beside a press machine enclosed by safety fencing

Of the five areas, safety has the most standardized definitions. Japan's Ministry of Health, Labour and Welfare (MHLW) defines the frequency rate and severity rate and how to calculate them in its Survey on Industrial Accidents.

  • Frequency rate (dosu-ritsu, 度数率) = deaths and injuries from work accidents ÷ total hours actually worked × 1,000,000
  • Severity rate (kyodo-ritsu, 強度率) = total workdays lost ÷ total hours actually worked × 1,000
  • Annual rate per 1,000 workers (nensennin-ritsu, 年千人率) = deaths and injuries in a year ÷ average number of workers in that year × 1,000

The frequency rate shows how often accidents happen, per 1 million hours worked. The severity rate shows how serious they are, as workdays lost per 1,000 hours worked.

Lost workdays follow fixed values. A death or permanent total disability counts as 7,500 days, and a permanent partial disability counts as 50 to 5,500 days depending on its grade. For a temporary injury, lost days are the calendar days off work × 300/365. The annual rate per 1,000 workers can be calculated even without hours data.

Here is a fictional example. A plant with 300 employees works 600,000 total hours in a year and has one accident that keeps a worker off for 30 days. The frequency rate is 1 ÷ 600,000 × 1,000,000 = 1.67. Lost workdays are 30 × 300 ÷ 365 = 24.66, so the severity rate is 24.66 ÷ 600,000 × 1,000 = 0.04.

Figure 4: Frequency and Severity Rates in Japan (2025, Sites with 100+ Workers)

Compare with sites of the same industry and size.

Group
Frequency rate
Severity rate
All surveyed industries
2.01 (2024: 2.10)
0.09
Manufacturing
1.33 (2024: 1.30)
0.07 (2024: 0.06)
Manufacturing, 1,000+ workers
0.36
0.02
Manufacturing, 500–999
0.99
0.07
Manufacturing, 300–499
1.40
0.08
Manufacturing, 100–299
1.93
0.09

Source: MHLW, 2025 Survey on Industrial Accidents. Counts deaths and injuries with one or more days off work or loss of a body part or function. Injuries with no lost time are not included.

In MHLW's 2025 survey, manufacturing had a frequency rate of 1.33 and a severity rate of 0.07. Within manufacturing, sites with 1,000 or more workers had a frequency rate of 0.36, while sites with 100–299 workers had 1.93. Smaller sites tend to have higher rates.

Before comparing, check two things. First, scope: this survey covers sites that regularly employ 100 or more workers and counts injuries with at least one day off work. If your plant includes no-lost-time injuries in its frequency rate, the numbers are not comparable. Second, size: in the example above, a single lost-time injury puts a 300-person plant at 1.67, above both the manufacturing average of 1.33 and the 1.40 for manufacturing sites of 300–499 workers. At small sites, one injury swings the rate a lot, so read it together with the injury count and the number of days without a lost-time injury.

Comparing with OSHA Rates and Other Countries

US plants usually report the OSHA total recordable incident rate (TRIR): recordable cases × 200,000 ÷ hours worked. The 200,000 base equals 100 employees working 40 hours a week for 50 weeks. The Japanese frequency rate uses 1,000,000 hours as its base and counts only injuries with lost time, while OSHA recordable cases also include medical treatment beyond first aid. Dividing a Japanese frequency rate by 5 puts it on the same hours base, but the cases counted are still different. Do not put the two numbers in the same column without a note. India has its own standard for these rates, IS 3786; check its definitions before comparing an Indian plant's figures with Japanese ones.

The better a plant's safety record, the less the injury count tells you. After months of zero, the number carries no information. That is why Japanese plants also track leading metrics: risk assessments completed, the share of safety findings corrected, and the number of hiyari hatto (near-miss) reports and the share closed out.

Environment (E) KPIs and Formulas

The central environmental metric is energy intensity (enerugi shohi gentan'i, エネルギー消費原単位): the energy used to make one unit of product.

  • Energy intensity = energy use in crude oil equivalent ÷ production volume (or another value closely linked to energy use)
  • Waste recycling rate = amount recycled ÷ waste generated (one common way to calculate it)

Japan's Energy Conservation Act requires companies that use 1,500 kL or more of energy per year (crude oil equivalent) to file regular reports on their energy use. These companies are expected to reduce energy intensity by an average of 1% or more per year over the medium to long term. It is an effort target rather than a mandatory one, but it is one of the few KPI targets backed by law. This is one reason energy intensity appears on Japanese KPI lists.

Fictional example: last year a plant used 1,200 kL (crude oil equivalent) to make 8,000 metric tons; this year it used 1,180 kL to make 8,100 metric tons. Energy intensity fell from 0.1500 kL/t to 0.1457 kL/t, which is 97.1% of last year, a 2.9% reduction.

Energy intensity also tends to worsen when output drops, because air conditioning, lighting, and idling equipment use energy regardless of volume. The law lets companies use another value closely tied to energy use as the denominator instead of production volume. Choose a denominator that fits your operation, and separate fixed energy use from use that scales with production; that makes changes easier to explain.

CO2 emissions fall under Japan's mandatory greenhouse gas reporting scheme. For energy-related CO2, it covers companies whose total energy use across all sites is 1,500 kL or more per year (crude oil equivalent), and the Energy Conservation Act report can be used for the emissions filing. Plants may also add waste and water metrics depending on the product and local conditions. Recycling rates change with choices such as whether heat recovery counts as recycling, so define the numerator and denominator in writing.

How Japanese Plants Set KPI Targets

Once the metrics are fixed, the next question is what the target should be. The short answer: there is no single correct value that fits every plant. Products, equipment, production methods, and metric definitions all differ. Figure 5 shows a practical order for setting them.

Figure 5: Six Steps to Setting KPI Targets

Agree on purpose, definitions, and the current level before choosing a number.

01Confirm the higher-level targetFrom company and plant policy, narrow down what must be achieved this period
02Define the metricWrite down the numerator, denominator, scope, and data source
03Measure the current levelUse the agreed definition on several months of data and check the spread
04Set the target and deadlineState in numbers what level you will reach and by when
05Choose actions and leading metricsPick the means to reach the target and the metrics that track progress
06Review regularlyCheck the gap against results and adjust the actions or the target itself

Break Down the Higher-Level Target

JIS Q 9023 is the Japanese standard for hoshin kanri (方針管理, policy deployment), the target-setting system used in many Japanese companies. It defines a target as the point to be reached in an effort to achieve a purpose, and a measure (hosaku) as the means chosen to reach the target. An item chosen as the yardstick for managing a target is a kanri komoku (管理項目, control item). A KPI is a control item: it links the target above to the actions on the floor.

Split the plant target by area, then break each part down into metrics the floor can move. Figure 6 shows one example for manufacturing cost.

Figure 6: Breaking a Target Down to Shop-Floor Metrics (Manufacturing Cost)

The lower the level, the more the metric responds to daily action on the floor.

Plant targetLower manufacturing cost per unit below last year's level by fiscal year-end
Split by cost type
MaterialsUsage and unit price
LaborWork hours and headcount
OverheadEnergy, repairs, outsourcing, and so on
Translate into shop-floor metrics
Material yield / first pass yieldCut material loss and rework
Labor productivityRaise output per labor hour
OEE / unit consumptionCut stoppage losses and material and energy use
Give each shop-floor metric an owner, a target value, a deadline, and actions, and put them all on one sheet.

This is one way to break it down. Plants with a high share of material cost and plants with a high share of labor cost will weight different branches.

Fix Definitions and the Current Level First

The same "defect rate" gives different numbers depending on whether the denominator is units inspected or units produced, and whether reworked parts are included. Before anyone argues about target values, write a one-page definition for each metric: numerator, denominator, scope, data source, and who compiles it.

Then measure the current level using that definition. A target set without knowing the current level usually ends up either out of reach or too easy. Look at the month-to-month spread as well, so a single good or bad month does not throw you off.

Write the Deadline and Target as Numbers

JIS Q 9023 recommends that a target state the condition to be reached and the deadline, and stresses that whether it was achieved should be objectively clear. "Reduce defects" gives no one a way to judge success at year-end. "Raise first pass yield on Line A from 94.0% to 96.0% by fiscal year-end" states the scope, the current level, the target, and the deadline (fictional example).

The same standard calls for agreeing targets with senior managers and related departments, and revising them if needed. That is also the point at which to check for conflicts with other departments' targets.

Set Conflicting Metrics as Pairs

Some plant metrics pull against each other. Building ahead to raise utilization lowers inventory turnover. Cutting inventory too far lowers on-time delivery. Tighter inspection reduces outflow defects but makes first pass yield look worse. For this reason, set targets for metrics that tend to conflict as pairs: OEE with inventory turnover, inventory turnover with on-time delivery, productivity with frequency rate. When only one side of a pair improves, check what happened to the other. The plant manager guide covers how these trade-offs reach the plant manager.

Use Outside Benchmarks Only When You Know the Conditions

It is tempting to compare with other companies or industry figures. Only use numbers where you know who collected them, the year, the scope, and the calculation method. The frequency and severity rates above come from MHLW statistics with published scope and formulas, so they work for comparison once you match the conditions. The 1% annual cut in energy intensity is an effort target under the Energy Conservation Act.

Defect rates, OEE, and inventory turnover, by contrast, vary in definition and product from plant to plant. An unsourced "typical value" is a weak basis for a target. Your own track record, and other lines in your company measured the same way, are a firmer reference.

Daily, Weekly, and Monthly KPI Reviews

Plant staff reviewing printed charts and graphs at a meeting table

A target does nothing unless someone looks at the number at a set time and place. Match how often you review a metric to how fast you can act on it.

Figure 7: What to Review, and When

Daily reviews handle problems, weekly reviews look at trends, monthly reviews check the gap to target.

Main metrics
Where, and what is decided
Daily
Output and plan attainment, first pass yield and defect count, equipment stoppages, injuries and near misses
Morning meeting or floor board. Act the same day on yesterday's problems
Weekly
OEE, defect breakdown, late orders, work-in-process
Weekly production meeting. Read trends and adjust next week's plan, staffing, and maintenance schedule
Monthly
Manufacturing cost and cost variance, on-time delivery, inventory turnover, frequency rate, energy intensity
Monthly review. Find causes of gaps to target, agree on fixes, decide on investment or organization

This assignment is one example. Set it to fit your lot sizes and production cycle.

For daily control, set a normal range separate from the target. JIS Q 9023 calls the value or range that represents a process that is stable, or running as planned, the kanri suijun (管理水準, control level). If you also decide who does what when a number leaves that range, the daily meeting becomes a place to decide actions rather than read out figures. The monthly review checks results metrics against targets and settles causes and countermeasures. For how this fits the plant manager's daily, monthly, and yearly cycle, see the plant manager guide.

Two habits keep the system useful. First, prune metrics: they are easy to add and hard to remove. If a number takes time to compile and is only read aloud in meetings, ask whether anyone uses it to decide anything. Keep the plant-wide set within the five areas of Figure 1 and leave detailed metrics to each department's daily control. Second, do not use self-reported metrics to blame people. Defect counts and near-miss reports depend on people reporting. If the people who report bad numbers get blamed, reporting drops, and the numbers improve only because problems are no longer visible. Use these metrics to find causes, and be careful about tying them to individual evaluations.

Quick Reference: Japanese KPI Terms

Use this table when you read a Japanese KPI report or fill in a template from Japan.

JapaneseRomajiEnglishCheck before you compare
直行率chokko-ritsuFirst pass yieldDenominator: units started, inspected, or produced?
工程内不良率koteinai furyo-ritsuIn-process defect rateInspected vs. produced; are reworked parts defects?
流出不良率ryushutsu furyo-ritsuOutflow (escaped) defect rate, ppmWhich customer findings count; by shipment month or finding month
歩留りbudomariMaterial yieldJIS meaning is output ÷ raw material input, not good ÷ total units
原価差異genka saiCost varianceSign convention; split into price and quantity
原単位gentan'iUnit consumption / intensityWhich denominator (tons, units, value)
稼働率kadoritsuUtilization (sometimes "availability")Against available time or calendar time; not the same as OEE availability
設備総合効率setsubi sogo koritsuOEEHow planned stops and ideal cycle time are set
納期遵守率noki junshu-ritsuOn-time delivery rateCustomer's requested date or your confirmed date; orders or quantity
在庫回転率zaiko kaiten-ritsuInventory turnoverValue or quantity; which inventory categories
度数率dosu-ritsuFrequency rate (per 1,000,000 hours)Injuries with 1+ day off (or loss of a body part or function); not the OSHA 200,000-hour base
強度率kyodo-ritsuSeverity rate (per 1,000 hours)Fixed lost-day values (7,500 for a death)
エネルギー消費原単位enerugi shohi gentan'iEnergy intensityCrude oil equivalent conversion; denominator
管理項目 / 管理水準kanri komoku / kanri suijunControl item / control levelWho acts when the number leaves the range

Template: KPI Definition Sheet

Fill in one sheet per metric before you set targets or send your first report to Japan. It prevents most "your numbers don't match ours" discussions.

FieldWhat to writeExample (fictional)
Metric name (English / Japanese)The name used in both reportsFirst pass yield / chokko-ritsu (直行率)
QCDSE area and typeArea, and results or leading metricQ, leading
FormulaNumerator ÷ denominator, with unitsUnits passed first time ÷ units started
Inclusions / exclusionsWhat counts and what does notReworked units count as failures; setup scrap excluded
ScopeLines, products, shiftsLine A, all part numbers, all shifts
Data sourceSystem or record the number comes fromInspection log in MES
Owner and compilerWho is accountable; who calculatesProduction manager; QC engineer
Review frequencyDaily, weekly, or monthly, and whereDaily at the morning meeting
Current levelAverage and range over recent months94.0% (range 92.8–95.1%)
Target and deadlineValue and date96.0% by fiscal year-end
Control level and responseNormal range; who does what outside itBelow 93%: line leader opens a defect review the same day
Paired metricThe metric that may conflictOutflow defect rate (ppm)

Questions to Ask the Japanese Side

  • For each KPI in the template, what are the exact numerator and denominator? Do you have a written definition we can follow?
  • Do reworked parts count as good in your quality metrics?
  • For on-time delivery, is the promised date the customer's requested date or the confirmed date? Do you count orders or quantities?
  • Should our safety figures use the Japanese frequency rate (per 1,000,000 hours, injuries with one or more days off work), our local rate, or both?
  • What denominator should we use for energy intensity, and which conversion factors to crude oil equivalent?
  • Which KPIs have targets set by headquarters, and which can the plant set itself?
  • Which metrics are reviewed monthly by headquarters, and which are for plant use only?
  • When does target setting for next fiscal year start, and when do you need our current-level data?

Limits of This Guide

The metrics and formulas here are common patterns, not a standard every Japanese company follows. Outside safety, where MHLW sets the definitions, each company and often each plant defines its own KPIs, and the results/leading split in Figure 1 is a guide only. Cost classification follows each company's cost accounting rules. The Energy Conservation Act, the GHG reporting scheme, and the MHLW survey apply to companies and sites in Japan; plants in other countries follow local law and local reporting rules, even when headquarters also asks for Japanese-style figures. Always confirm the definitions in your company's or customer's own template.

FAQ

What Does QCDSE Stand For?

QCDSE stands for quality, cost, delivery, safety, and environment. Japanese plants use these five areas to organize their KPIs, usually pairing a results metric and a leading metric in each area so the whole set fits on one page.

How Do You Calculate the Frequency Rate and Severity Rate?

In Japan, frequency rate = deaths and injuries from work accidents ÷ total hours actually worked × 1,000,000, and severity rate = total workdays lost ÷ total hours actually worked × 1,000. MHLW counts injuries with one or more days off work, and a death counts as 7,500 lost days.

Is the Japanese Frequency Rate the Same as the OSHA Incident Rate?

No. The Japanese frequency rate uses a 1,000,000-hour base and counts injuries with one or more days off work. The OSHA total recordable incident rate uses a 200,000-hour base and also counts recordable cases without lost time. Report them separately, or label clearly which one you are using.

What Is Chokko-ritsu?

Chokko-ritsu (直行率) is first pass yield: the share of units that pass the first time without rework. JIS does not define it, so confirm the denominator and how reworked parts are treated with the company that set the metric.

What Is a Good Target for OEE or Defect Rate?

There is no single value that fits every plant. Definitions and products differ too much. Set targets from your own measured current level, with a deadline and a stated end point, and use outside figures only when the source, scope, and calculation method are known.

Sources

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About the editor

MONOSCOPE EditorFOUNDER & EDITOR

Spent about ten years at a plant equipment maker and a plant engineering company, proposing, designing, and commissioning equipment, then moved into web marketing. Now a web consultant for B2B manufacturers, helping them explain their products and technology. Licensed in Japan as an Energy Manager and a Third-Class Chief Electrical Engineer.

Has run an engineering blog since 2017 (500+ articles) and a Japanese YouTube channel with about 20,000 subscribers. Each English guide is written from the Japanese shop-floor point of view and checked against the cited standards.

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