We found an interesting article titled “28 Manufacturing Metrics That Actually Matter” by Mark Davidson, a manufacturing operations analyst. Davidson outlines 28 different metrics that can be used to improve operations in production plants and in the manufacturing industry. The article was posted by LNS Research; a company that researches and provides insights into metrics, business operations, and the various technologies involved in achieving highly-efficient manufacturing operations management.
Davidson groups the metrics into 8 different categories so that you can easily see which metrics you need to focus on to improve particular areas of your business. Choose a few of the metrics and processes to work on and monitor the high level goal to find out your progress.
We have outlined the metrics below, but for more details and definitions you can read the full article here.
28 Performance Metrics to Improve Manufacturing Operations:
Improve Customer Experience
- On-Time Delivery to Commit
- Manufacturing Cycle Time
- Time to Make Changeovers
Improve Product Quality
- Yield
- Customer Rejects, Return Material Authorizations, and Returns
- Supplier’s Quality Incoming
Improve Manufacturing Efficiency
- Throughput
- Capacity Utilization
- Overall Equipment Effectiveness (OEE)
- Schedule or Production Attainment
Reduce Inventory
- WIP Inventory/Turns
Ensure Compliance
- Reportable Health and Safety Incidents
- Reportable Environmental Incidents
- Number of Non-Compliance Events Per Year
Reduce Machine Maintenance
- Percentage of Planned vs. Emergency Maintenance Work Orders
- Downtime in Proportion to Operating Time
Increase Flexibility and Innovation
- Rate of New Product Introduction
- Engineering Change Order Cycle Time
Reduce Costs and Increase Profits
- Total Manufacturing Cost per Unit Excluding Materials
- Manufacturing Cost as a Percentage of Revenue
- Net Operating Profit
- Productivity in Revenue Per Employee
- Average Unit Contribution Margin
- Return on Assets/Return on Net Assets
- Energy Cost Per Unit
- Cash-to-Cash Cycle Time
- EBITDA
- Customer Fill Rate, On-Time Delivery, and Perfect Order Percentage
Davidson notes that multiple metrics may be required to achieve specific goals, and that it’s important for you to recognize the relationship between your high level goals, the objectives you have set for yourself, and the actions you need to take in order to achieve them. If you understand this process and establish your targets to measure your progress.
We hope these metrics help you determine areas you can improve on in your shop, establish measurable targets, and reach your business goals.
Related Articles:
Improve Your Shop’s Production: An Intro to Lean Manufacturing
Want to Increase Shop Production? Change the Way You Speak to Workers
Shop Talk: The True Cost of Downtime in the Manufacturing Industry
