What are the best metrics and KPIs for manufacturing companies?
Manufacturing is a bit of a different beast to facilities management, which means that the most useful metrics and KPIs to track are also somewhat different.
Downtime and uptime are the heartbeats of a manufacturer – when the facility has too much downtime, everything trends downwards and the health of the organization suffers.
With that being said, tracking equipment downtime (amount of downtime, downtime per asset/area, why downtime occurs) is vital for both understanding a facility’s health and administering solutions to those problems.
When we understand where downtime occurs and why it happens, we can fix issues and shift a facility’s maintenance percentage away from reactive and emergency maintenance.
This all applies to planned downtime as well – sometimes equipment needs to be put down for routine maintenance, which is an important thing to track.
2. Yield, Cost, and Throughput
In tandem with downtime, tracking production metrics like product yield and input costs is also important for optimizing a facility’s profit.
One particular important facet of this is throughput, which measures the amount of product created over a specific period of time. When we measure throughput, we can understand how specific assets perform as well as which assets underperform (diagnosing areas for maintenance).
3. Customer Rejects and Lead Time-To-Customer
Just as it’s important to track products before and during their creation, it’s equally critical to understand how your products fare after the customer has them in their hands (or when they send it back to you).
One key customer metric is customer rejects, which involves the number of products that are poorly reviewed or returned by the customer for a refund/replacement. Ultimately, these products are either dead in the water or require significant financial and time commitment to rework, quantifying them as a form of waste. Too many rejects indicates problems somewhere in the manufacturing process.
It’s also important to track the efficiency with which products get to your customers. What’s the fill rate of your product with customers? Are we delivering products on schedule? This metric tells us the efficacy of a facility’s customer service efforts.