Measure Performance with These 6 Manufacturing KPIs

Managing a manufacturing company’s production is a daily challenge for operations managers. Overseeing manufacturing, engineering, logistics, and maintenance involves multiple responsibilities to ensure operational profitability. Monitoring key Manufacturing KPIs is essential for effective operations management and informed decision-making. Implementing systems to evaluate and monitor plant performance and human capital optimization is crucial. Specific manufacturing KPIs provide precise, comprehensive data to answer critical strategic questions:

• What is the plant’s overall rate of return?
• Is the equipment operating at full capacity?
• Is my human capital optimally involved?
• What is the average downtime of the production line?

Productivity

KPIs for the performance of a manufacturing processing chain measure all components involved. These indicators, whether for machine efficiency, resource utilization, or delivery times, provide a clear view of your production rate. Key manufacturing KPIs include:

• Overall rate of return (RGH);
• Productivity rate;
• Production level;
• Productivity rate per shift;
• Number of products produced over the period;
• Unused production capacity;
• Etc.

By closely monitoring these KPIs, you gain valuable insights into optimizing your manufacturing processes and improving overall efficiency.

Processes

Because processes have a great influence on operational efficiency, it is advisable to target KPIs that can provide information for this purpose. These KPIs will help you obtain clues about your production cycles, the reliability of your delivery times and also help you prevent possible slowdowns on the assembly line.

• Average production time per product;
• Average production cycle time;
• Reliability of planning and forecasting;
• Queue density;
• Etc.

The deadlines

Since estimating and respecting delivery time is an issue on which a client bases his or her level of satisfaction, it is advisable to monitor the related data as closely as possible.

• Average delivery times;
• Number of deliveries received within the estimated timeframe;
• Average time to process an order;
• Average time taken to process disputes (return requests, refunds, credits, etc.);
• Etc.

Inventory and stock management

Because the production rate of a manufacturing firm is subject to the rate at which it receives the goods it needs to operate, it is important to properly supervise the activities related to it. The use of KPIs for inventory management can avoid several problems such as: stock shortages when procuring raw materials or components, inefficient rotation of finished products, etc.

• Inventory turnover rate;
• Level of work-in-process inventory;
• Coverage of critical inventories;
• Downtime rate due to out-of-stocks;
• Number of days inventory in advance;
• Etc.

Resources

In collaboration with your maintenance manager, it is necessary to evaluate the level of reliability and performance of the equipment. It is possible, using various KPIs based on specific data on the behavior of your machines, to evaluate, among other things, their capacity of use, downtime according to the reliability of the equipment and the related maintenance costs.

• Use of the equipment;
• Equipment reliability;
• Downtime cost per equipment;
• Average duration of equipment shutdowns;
• Etc.

The quality

Together with your quality control manager, these measurements are relevant mainly to measure the reliability of your transformation processes based on the output rate of products with no manufacturing defects.

• Rate of compliant products;
• Rate of defective products;
• Rate of conform and defective products per machine;
• Compliance and failure rates per shift;
• Etc.

However, depending on the level of digital maturity of a manufacturing company, the use of KPIs in management processes can discourage some people from using them, particularly because of the upstream work that is often necessary to access certain data.

Remember that to ensure the reliability of a KPI, it is important to involve data that is as accurate as possible. A company that refers to data coming from manual or semi-manual processes is at greater risk of involving data corrupted by human error than a company that refers to data generated by proven and automated processes.

Concrete results

With the advent of Industry 4.0, manufacturing companies can leverage real-time data connectivity and analysis to enhance operational monitoring. Implementing KPI display solutions directly on the production floor boosts productivity and supports continuous improvement processes.

Incorporating productivity enhancement into your strategic planning begins with an Industry 4.0 audit to analyze current processes and identify future needs.

Measure your potential for tomorrow today by harnessing the power of Industry 4.0 and manufacturing KPIs.

For more detailed insights into key performance indicators and their application, you can read our article on the 10 Key Performance Indicators to Monitor Using a MES.