The Complete Guide to Manufacturing KPIs

Data-driven manufacturing is the key to operational excellence in today's world. Keeping tabs on the live status of production, being able to dive deep into the 'why' behind downtimes, defects & more, leveraging insights for continuous improvement ... there are myriad metrics, KPIs and data points that a manufacturer can measure at any time.

But where do you start?

This complete guide outlines a pretty exhaustive list of core KPIs manufacturers can measure to drive more data-driven decision making in their organizations. Each KPI has a short description with a link to a more detailed article where we go into the specifics of each one.

We'll be adding more to this list over time, so if there's something that is missing, give me a shout at dominic@deployferry.io and we'll add it to the list!

Overall Manufacturing Performance Metrics

These are overarching metrics that help manufacturers get a quick sense of how they are performing

1. OEE (Overall Equipment Effectiveness): measures the overall efficiency of equipment by considering availability, performance, and quality

2. TEEP (Total Effective Equipment Performance): evaluates the overall effectiveness of equipment utilization, including both planned and unplanned downtime

3. Capacity Utilization: measures the extent to which a company uses its installed production capacity

Production Costs and Efficiency

1. Production Costs: accounting for total expenses incurred in the production process

2. Unit Costs: techniques for calculating the cost associated with producing a single unit

3. Maintenance Costs: methods to assess the expenses involved in maintaining equipment and machinery

4. Total Manufacturing Cost per Unit Excluding Materials: techniques to calculate the total cost of production per unit, excluding raw material expenses

5. Manufacturing Cost as a Percentage of Revenue: keeping track of manufacturing costs relative to the top-line of the business

6. Average Unit Contribution Margin: ensuring that per unit production is profitable for the company

7. Energy Cost per Unit: ensuring that utility expenditures are appropriately managed by the manufacturing process

8. Cash-to-Cash Cycle Time: evaluates the time taken for a company to convert cash outflows into cash inflows

9. Maintenance Unit Cost: ensuring that maintenance of equipment is a minimal fraction of total operating costs on a per unit of production

10. Avoided Costs: techniques to evaluate costs avoided due to efficient practices or actions

11. Takt Time: maximum amount of time in which a product needs to be produced to satisfy customer demand

12. Process Cycle Time: total time it takes for a product to pass through the production process

13. X-Bar: statistical measure that represents the average number of defects per unit produced within a given period

14. Cpk: a numerical score that indicates how well a process can meet specification limits, considering the natural variability of the process

Quality and Defect Metrics

1. Defect Density: measures the number of defects per unit of product or process

2. On-Time Delivery: evaluates the percentage of deliveries made on time

3. First Time Right: measures the rate of producing products without any defects or rework

4. Scrap Material Value: quantifying the monetary value of scrapped materials

5. First Time Yield: techniques to evaluate the percentage of products meeting quality standards at the first attempt

6. First Pass Yield: methods to compute the percentage of products passing quality checks at the initial production phase.

7. Throughput Yield: a bit of a red herring - this is the same as first pass yield!

8. Rolled Throughput Yield: evaluates the overall yield through a series of process steps

9. Normalized Yield: an inverse geometric average measure starting with rolled throughput yield to back-calculate the 'average' throughput yield at each stage of production

10. Perfect Order Percentage: measures the percentage of orders meeting all criteria without any issues

11. Customer Reject Rate: evaluates the rate at which customers reject products due to quality issues

12. Scrap Rate: measures the percentage of materials or products discarded during production

13. Defects Per Unit: measure of the individual defects on a unit

14. Defects Per Opportunity: statistical measure used in process and quality control that represents the probability of a defect

15. Defects Per Million Opportunities: measure of quality performance that indicates the number of defects in a process per million opportunities

16. PPM Defective: number of defective parts in every million parts produced

Inventory and Work Efficiency

1. Inventory Turnover: measures the number of times inventory is sold or used in a given period

2. Work in Progress: evaluates the unfinished goods or products in the production process

3. Production Attainment: techniques to evaluate the achievement of production goals.

4. Material Yield Variance: the difference between the actual amount of material used in production and the standard or expected amount

5. Overtime rate: measuring the extra hours employees work beyond their regular working hours

Equipment Efficiency and Maintenance

1. Throughput Rate: measures the rate at which a system produces outputs

2. Mean Time Between Failure (MTBF): techniques to calculate the average time between equipment failures

3. Mean Time to Failure (MTTF): methods to determine the average time until equipment failure

4. Mean Time to Repair (MTTR): average time it takes to fully resolve a failure

5. Percentage Maintenance Planned: evaluates the proportion of planned maintenance activities

6. Percentage Planned vs Emergency Maintenance Work Orders: compares planned and emergency maintenance work orders

7. Unscheduled Downtime: quantifies the unplanned periods of equipment or system inactivity

8. Downtime in Proportion to Operating Time: measures the percentage of time equipment is inactive compared to operational time

9. Machine Set-Up Time: techniques to assess the time required to set up machinery for production.

10. Machine Downtime Rate: the percentage of time a machine is not operational during working hours.

11. Changeover Time: interval between the last good piece of a previous production run and the first good piece of the next production run.

Customer and Supply Chain Metrics

1. On-Time Delivery to Commit: adherence to committed delivery schedules

2. Lead Time: techniques to evaluate the time taken for an order to be fulfilled. Also known as customer cycle time.

3. Customer Fill Rate: evaluates the rate at which customer orders are fulfilled

4. Final Yield: methods to calculate the final yield of products after all stages of production

5. Return Merchandise Authorizations: techniques to quantify authorized returns of merchandise

6. Supplier's Quality Incoming: evaluates the quality of materials received from suppliers.