In simple words, whether its production capacity is used effectively or not.Here are some of the most important KPIs to track in manufacturing.An effective manufacturing operation can offer its customers a wider range of services and products.A good manufacturing company also thinks about their employees wellbeing, has healthy financial indicators, and is able to adapt to the changing environment.
No matter what they are, to understand whether the company is moving in the right direction it is crucial to be able to track all of the changes happening. The use of indicators helps the manufacturer to better understand the current situation and help evaluate the effectiveness of strategy implementation. These areas can vary in different companies, depending on the current circumstances at any given time. Another thing to keep in mind is that effective indicators must be both measurable and actionable there should be a clear understanding what is measured, how it is done and what actions can lead to the improvement of the indicator in the future. Some measures are more important during one period of company developments when this period ends, others become more important and need to be focused on. In case of increased number of customer complains the manufacturer has to turn extra attention towards the quality of the products and its yield. During this research, a total of 28 manufacturing performance indicators have been identified as the most important by decision makers. The number shows how effectively the current resources are utilized, whether human resource and equipment usage cost is on track. This can be calculated on several levels, on a company level, on a department level and even production line level. Revenue per employee shows areas with the lowest and biggest ROI. This ratio is a direct indicator of asset availability for production. ![]() If the ratio is 0.5 this means that the production lines were stopped half of the time. If the quality of materials supplied is low, spending for product repairs is increased. This can be calculated also in different ways: by supplier; by product category; as a percentage of faulty materials vs good materials. Tracking this KPI helps to understand whether the supplier is reliable or not. It will also help to identify possible issues in customer logistics. It is the number of good units without rework or scrap coming from the production line. ![]() Low yield might mean that there are problems somewhere during the manufacturing process. This is one of the key metrics that signal that something is wrong and a closer investigation into the process is needed.
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