Calculating Rolled Throughput Yield (RTY)
by Ron Pereira on September 12th, 2007.One of the most poweful operational metrics I know of is Rolled Throughput Yield (RTY). It’s used to assess the “true” yield of a given process. This includes what we often call the “hidden factory” that plagues so many organizations… sucking profit right off their financial statements!
Traditional Yield
Let’s use an example to demonstrate how some, let’s call them, traditional manufacturing folks attempt to measure things.
Say there is a manufacturing process with 3 steps - Processes 1, 2, and 3 (original, eh?). Let’s also say that on a particular day they note the following performance:
- Process 1: 100 parts passed through this process and 84 “good” parts left this process (scrapped 16).
- Process 2: With some WIP laying around 110 parts passed through this process with 82 “good” parts passing (28 scrapped)
- Process 3: With even more WIP laying around this process they managed to produce 138 parts with 126 parts passing (12 scrapped).
Since the manufacturing manager only cares about “what goes out the door” the process they are most concerned with is the last one - process 3. And since they had a great day (only scrapped 12 parts) they report a “yield” of 91% (126/138). The manager even calls his buddy Sal, the sales manager, to brag about all the product they shipped!
Not So Fast Buddy
There are some fundamental flaws with this technique. The most severe issue is the fact they are ignoring all the scrapped parts process 1 and 2 created. This “hidden factory” is not known by Sal or really anyone else short of the folks on the line.
Here is how the manufacturing manager should be measuring the performance of their line.
RTY
Process 1 had a daily yield of 84% (84/100) while process 2 had a daily yield of 75% (82/110) and finally process 3 had a daily yield of 91% (126/138).
So, to calculate RTY we simply multiply these yields together giving us a composite yield for the day. Doing this gives us:
- 84% x 75% x 91% = 57%
Our Opportunity
This value of 57% is a more accurate representative of how this production line is performing. And more importantly this 57% is our opportunity as lean and six sigma practitioners!
Sure, the manager will probably not call old Sal telling him the latest RTY. And that’s fine. But we must not kid ourselves into believing we are performing better than we are. By focusing on RTY we can be sure we stay focused on the true pulse of the organization.
Note: All the WIP I mentioned in the example is another problem! But we will save that for another day.
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i WOULD LIKE TO KNOW THE DIFFERENCE BETWEEN FIRST PASS YIELD AND ROLLED THROUGHPUT YIELD CAN YOU GIVE ME AN EXAMPLE - THANKS
Whats if the processes are in parallel and then feed into a series system?
And when can we read the article that considers the WIP
What is considered as Wolrd Class with regards to RTY e.g. above 0.7
How do you Benchmark RTY ?
Hi Adrian, good question. I am not sure if I’ve ever heard of what a world class RTY is. With this said, personally I don’t spend a lot of time thinking about benchmarking since, in the end, we can always improve. So, even if you have a RTY of 95% I’d challenge you to get better.
I don’t mean to be a stick in the mud, but this technique is taking first pass yield and multiplying them together. I understood RTY to equal “e” to the minus DPU. I have also seen it as equalling “1-DPO.” Your calculation shows nothing about DPU, DPO etc. maybe some review is needed here.
Hi Mark,
You’re not being a stick in the mud at all!
There are actually two ways to calculate RTY. Method 1, as you describe, assesses dpu when all that is known is the final number of units made and the number of defects. In this case RTY = e^-dpu. So, for example, if you had 8 defects over 6 units the dpu would be 1.33 and plugging this into the formula our RTY = 0.264.
The method I described is the other, and I contend superior, method of calculating RTY since we determine throughput yield (Ytp) for each step. And if we have this information for each step we simply multiply them together for RTY.
Make sense?
Isn’t what Mark is getting at is that these methods tend to blur the difference between yields based on overall defects per unit rather than numbers of units that manage to pass at various process steps? Whenever the multiplied yields method is displayed for RTY, people have a tendency to assume each entry represents the yield of good units rather than the long term probabilistic absence of defects among units at each step. There is a subtle but important difference here that demands that we get more specific about “yield” — of what, relattive to what?. Mikel Harry has a cogent explanation of this in his Six Sigma Breakthrough Management book (2000, pp. 83-88.) I haven’t found a better explanation anywhere. I’m still looking.
To flip this around the other way, consider a unit with 10 potential defects. In one sample of 10 units there may be 5 defects all stuffed into one unit. The good “unit” yield would be 0.9. In another sample of 10 with 5 defects there may be one defect on each of 5 units, giving a good “unit” yield of 0.5. But both samples have the same probabilistic level of defects. The reference to yields on a unit basis is of little use in these cases and even shrouds the truth about the extent and risk of defects. This goes way past the confusion about which WIP belongs to which sample batch and how a step-after-step unit yield might be hard to track– a legitimate challenge in any real world plant or heavy transaction environment.
RTY - Rolled throughput yield as I can see is more concerned with how effective the current process is. It accounts for how many parts are accepted with or with out defect. Unacceptable parts are scrapped. Therefore this is a measure of yield throughout an entire process which is a different measure than DPU and DPMO.