Last Updated on October 13, 2023 by Ossian Muscad
Unearth the gems hidden in your production data by mastering the game of manufacturing metrics. As the digital age unfolds, manufacturers are no longer just making products; they are also creating vast data at every stage of their operations. If tracked and analyzed correctly, this data can reveal invaluable insights to streamline processes and outpace the competition. By keeping an eagle eye on the right key performance indicator (KPI) metrics, you can transform your manufacturing operations from a complex labyrinth into a high-speed highway to success.
This article will spotlight 50 crucial manufacturing KPI metrics that serve as your compass in this endeavor, guiding you toward operational excellence. Buckle up; it’s time to accelerate your manufacturing prowess!
What is a Manufacturing KPI?
A Manufacturing KPI, or Key Performance Indicator, is the North Star guiding your manufacturing operations. These measurable values indicate how effectively a manufacturer achieves key business objectives. Think of them as your operation’s vital signs—the pulse of your productivity, the blood pressure of your efficiency, and the temperature of your overall operational health.
They’re not just numbers; they are a narrative, telling you where you’re succeeding and where you might need a little manufacturing TLC. Whether it’s tracking the amount of scrap produced or your production cycle time, these KPIs are the secret sauce to cooking up success in the manufacturing world. So, are you ready to don your data hat? Let’s dive in!
The Importance of Tracking the Right KPIs in Manufacturing
Just as a compass is pointless without a destination, tracking KPIs without purpose will lead you in circles. The key is to identify those indicators that align with your company’s goals and strategic objectives. This will offer you a snapshot of your current operational performance and help chart a roadmap for future success. Let’s understand why this is so crucial in the manufacturing realm.
Clarifying the Vision
Manufacturing KPI metrics are not just about number-crunching; they represent your organization’s aspirations. They give a definite shape to what could otherwise be abstract goals, anchoring your vision with measurable outcomes.
Detecting Operational Hiccups
A sudden spike in production costs, a drop in the yield ratio, or an increase in unfulfilled orders are signs of operational hiccups. Tracking relevant KPIs can help you detect these signs early and respond proactively, maintaining the rhythm of your manufacturing symphony.
Benchmarking Success
Your KPIs also serve as a yardstick for success, enabling you to benchmark your performance against industry standards or past performances. This not only helps you identify your competitive edge but also highlights areas where there is scope for improvement.
Driving Continuous Improvement
In the ever-evolving manufacturing landscape, staying static is not an option. Your KPIs can help you identify trends and patterns, inspiring data-driven strategies for continuous improvement.
Facilitating Informed Decision Making
Guided by data and not darts in the dark, manufacturing KPI metrics equip you with the necessary insights to make informed strategic decisions, aligning your operations with your overall business objectives.
In the following sections, we will delve into the 50 essential manufacturing KPIs that every manufacturer should be tracking. Let’s get started, shall we?
50 Important KPIs to Track on Your Shop Floor
Embarking on the road to manufacturing excellence, it’s time to grasp the KPI metrics that matter. So, let’s roll up our sleeves and dive headfirst into the first 20 essential manufacturing KPI metrics that should be the bread and butter of your manufacturing operations.
- Asset Utilization: This KPI measures how effectively your organization uses its assets in production. A higher percentage signifies better utilization.
- Opportunity Gap: The difference between your potential and actual production capacity. It’s like the gap between what your manufacturing genie can do and what it’s actually doing.
- Avoided Cost: This metric tracks cost savings that result from preventive measures. It’s all about celebrating your manufacturing victories, however small they may seem.
- Capacity Utilization: This KPI helps you understand how much of your total manufacturing output capacity is utilized.
- Cycle Time: This is the total time from the beginning to the end of your process, as defined by you and your customer. It’s the life span of your manufacturer’s ‘cycle of life.’
- Demand Forecasting: Your crystal ball into future sales, allowing for smoother production planning and stock management.
- Plant Uptime and Downtime: Yup, just as it sounds—it’s when your plant is up and running vs. when it’s down. Simple, but oh-so-critical.
- Labor as a Percentage of Cost: This metric shows how much your total production cost is from labor. Essentially, it’s about counting the cost of manpower.
- Labor Usage: This KPI measures the amount of human resources allocated and used during the manufacturing process.
- Maintenance Cost per Unit: The total maintenance cost incurred for each unit produced. A mini health check for your machines, if you will.
- Manufacturing Cost per Unit: The cost associated with producing individual units of your product. It’s like the price tag on your manufacturing prowess.
- Material Costing, Usage: This measures the cost of materials in production and how efficiently they are used.
- Mean Time Between Failure (MTBF): This KPI calculates the average time between system failures. Think of it as a meter of your system’s resilience.
- Mean time to Failure: This measures a system’s elapsed time to failure. It’s the ticking time bomb of your manufacturing operations!
- On-time Delivery: This KPI monitors if products are delivered per schedule. It’s like the punctuality report of your manufacturing school!
- Overall Equipment Effectiveness (OEE): This is a gold standard for measuring manufacturing productivity. Essentially, it indicates the percentage of manufacturing time that is truly productive.
- Manufacturing Cycle Efficiency: This measures the speed of your manufacturing process. If manufacturing were a race, this would be your speedometer!
- Overtime as a Percentage of Total Hours: This KPI shows the proportion of paid hours devoted to overtime. It’s like checking the overtime thermometer of your operational health.
- Takt Time: This measures the maximum amount of time a product needs to be produced to meet customer demand. It’s like the heartbeat of your production line!
- Unit Cost: This measures the cost incurred to produce a single unit of your product. It’s like counting the coins in your piggy bank.
- Mean Time to Repair: This KPI tracks the average time to repair a failed component or system. It’s the healing factor of your production line.
- First Pass Yield (FPY): This measures the percentage of products that meet quality standards on the first production run. If manufacturing were a class, this would be your pass mark!
- Rolling Throughput Yield: This KPI is the probability that a single unit can go through each process step and meet quality standards. It’s your manufacturing success probability!
- Unused Capacity Expenditures: This measures the cost of your unused production capacity. It’s like the ghost money of your manufacturing system.
- Unplanned Capacity Expenditure: This metric tracks the cost incurred due to unexpected production capacity needs. It’s the surprise expense of your manufacturing party!
- Work-in-process (WiP): This KPI tracks the cost of the production process at various stages. It’s like peeping into the kitchen while the cooking is still on.
- Utilization: Measures how much of your capacity is actually being used. It’s like measuring the water in your manufacturing well.
- Time to Make Changeovers: This KPI tracks the time to switch from producing one product type to another. It’s the musical chairs of your manufacturing process!
- Rejects, or Customer Returns: These are the products that failed quality tests or are returned by customers. They’re like the trespassers of your manufacturing kingdom.
- Production Attainment: Your ability to meet a production target within a specified time. It’s like a report card for your manufacturing school!
- Throughput: The number of units produced on an average per time period. It’s your game score in the manufacturing arcade!
- Health and Safety Incidents: This KPI tracks the number of workplace incidents that have led to employee injuries or illnesses. It’s the safety bell in your manufacturing factory.
- Cash-to-Cash Cycle Time: This measures the time a company takes to convert its inventory investment into cash. It’s like the pulse rate of your company’s cash flow!
- Full Production Start Date: The date on which your manufacturing process starts in full swing. It’s your manufacturing calendar’s big day!
- Workforce Utilization: This measures how effectively your workforce is being used. It’s like a fitness tracker for your human resources!
- Supply Chain Efficiency: This KPI measures the efficiency of your supply chain operations. It’s like a health check-up for your supply chain!
- Digital Transformation Index: This tracks how well your company has adopted digital technologies in its operations. It’s the tech savviness meter for your business!
- Customer Satisfaction: This KPI measures your customers’ satisfaction with your products. It’s like the applause meter at your manufacturing concert!
- Inventory Turnover: This tracks how often your inventory is sold and replaced. It’s like the heart rate monitor for your stock!
- AI and Automation Adoption Rate: This KPI measures how well your company has integrated AI and automation into its operations. It’s the future-readiness gauge of your manufacturing operations!
- Rate of Return: This measures the number of products returned by customers due to defects or dissatisfaction. It’s like the boomerangs of your manufacturing operations!
- Energy consumption: This KPI tracks the amount of energy used in the process of manufacturing. It’s the fuel gauge of your manufacturing vehicle!
- Productivity per employee: This measures the output of each worker in your manufacturing business. It’s like the report card for your workforce!
- Scrap Rate: This KPI calculates the percentage of materials wasted during the manufacturing process. It’s like the waste bin of your manufacturing house!
- Gross Margin Return on Investment (GMROI): This KPI measures the profit return on the amounts invested in the stock. It’s like the fortune cookie for your manufacturing business!
- Order Status: This tracks customer orders’ status and completion rate. It’s like the progress bar for your customer’s orders!
- Supplier Defect Rate (SDR): This metric tracks the percentage of defective materials received from suppliers. It’s like the red flag in your supply chain!
- Cycle Time: This measures the time it takes to manufacture a single product from start to finish. It’s like the stopwatch for your production run!
- Process Downtime: This KPI tracks the amount of time production is halted due to various issues. It’s like the pause button of your manufacturing process!
- Delivery Schedule Adherence: This measures the percentage of products delivered on time to customers. It’s like the punctuality meter for your manufacturing deliveries!
With a clear understanding of these KPIs, you’re well on your way to making data-backed decisions that can dramatically improve your manufacturing processes. Stay tuned for the next set of KPIs in our upcoming section!
Tips on How to Implement and Track Manufacturing KPIs
In the manufacturing world, the phrase “what gets measured, gets managed” is more than just a catchy saying—it’s a fundamental truth. But how do you go about doing it? Fasten your seatbelts because we’re about to embark on a rollercoaster journey into the world of KPI tracking!
Get Clear on Your Business Goals
Before you even think about tracking KPIs, you need to have a solid grasp of what you’re hoping to achieve. It’s like setting the destination before you begin your manufacturing road trip!
Choose Relevant KPIs
Not all KPIs are created equal; your chosen ones should be directly linked to your business goals. While the 50 manufacturing KPI metrics mentioned above are relevant, the reality is that you’ll only be able to track a fraction of them. So, choose the ones that matter most to your business and focus on those.
Use Technology to Track KPIs
There are plenty of software tools that can help you track your chosen KPIs in real time. It’s like having a digital assistant for your manufacturing stats! Some popular options include DATAMYTE, Microsoft Power BI, Tableau, and Google Analytics.
Train Your Team
Your team should understand what each KPI means and why it’s important. It’s like learning the rules of the manufacturing KPI metrics game! Make extra effort to educate your team on how to properly track and use KPIs to drive continuous improvement.
Review Regularly
Keep a close eye on your KPIs and review them regularly to ensure you’re on track. It’s like having regular check-ups for your manufacturing wellness! Consider setting a schedule for monthly or quarterly reviews to stay on top of any potential issues and make adjustments as needed.
Make Data-Driven Decisions
Last but not least, use the data from your KPIs to make informed decisions. It’s like using a compass to navigate your manufacturing journey! The best part about tracking KPIs is that they provide concrete data to guide your decisions and drive continuous improvement in your manufacturing processes.
Streamline Manufacturing Operations Using a Low-code Platform
Besides tracking the relevant KPIs, businesses can streamline their manufacturing operations by utilizing a low-code platform. Low-code platforms allow manufacturers to quickly and easily build customized applications for specific processes such as inventory management, quality control, and supply chain management.
DATAMYTE is a quality management platform with low-code capabilities. The DataMyte Digital Clipboard is a low-code workflow automation software that features a checklist and smart form builder. This tool lets you create a comprehensive quality control checklist for your manufacturing operations, ensuring all necessary steps are completed and documented.
To create a checklist or form template using DATAMYTE, follow these steps:
- Log in to the DATAMYTE software platform and navigate to the ‘Checklist’ module.
- Click “Create Checklist” to create a new form template.
- Define the title of the template and the category in which it belongs.
- Use DATAMYTE’s low-code capabilities by adding items to the template; click “Add Item.” You can define the description of the item, the type of answer required, and any other specifications, such as reference documents, acceptance criteria, or limits.
- Assign appropriate personnel responsible for completing the template and any required approvals, such as supervisors or quality assurance personnel.
- Save the template, and it will be available for use.
DATAMYTE also lets you conduct layered process audits, a holistic assessment of critical process steps, focusing on the areas with the highest risk of failure or non-compliance. By conducting LPA with DATAMYTE, you can effectively identify and correct defects before they become major quality issues.
DATAMYTE is the complete package for creating and implementing quality control measures, streamlining operations, and improving manufacturing performance. Book a demo with our team today to learn how DATAMYTE can help your business stay ahead of the competition!
Conclusion
And there you have it—a deep dive into the ocean of manufacturing KPIs, all 50 of them, and a roadmap to navigate these metrics to improve your manufacturing processes. Remember, it’s not about tracking every KPI under the sun but focusing on those that align with your business goals.
With the right tools like DATAMYTE and a committed team, you can use KPIs as your compass, guiding you towards efficient operations and continuous improvement. Ready to embark on this exciting journey? Fasten your seatbelts, rev up your manufacturing engines, and let’s drive your business to new heights!
