You can’t manage or administer something if you can’t measure it. Any manufacturer who wants to take their business to the next level needs to collect and analyze production data or metrics to evaluate their performance.
Numbers are powerful in business. Production indicators can help you find conflicting or weak points in your production line and processes, giving you the information and knowledge you need to continually improve and refine your business.
However, you can’t be piecemeal about it. In addition to collecting the right metrics, you also need a proper process for reviewing, and then acting on, the results.
What production metrics should I measure?
These are the 12 most important production metrics to measure in the manufacturing industry that are essential for a business to be successful…
1.- Manufacturing cycle time
Cycle time is the total time from the beginning to the end of a process. In manufacturing, it measures the time it takes for a product to go through all the machines, processes and cycles to become a finished product. The total time an item spends in the manufacturing system between order request and completion is the “total manufacturing cycle time.” Reducing this time can lead to lower costs, better response to customers, and greater flexibility.
2. Time to make changes
Changeover or transition is the process of making a line or machine change from manufacturing one product to another. So these types of production metrics simply measure the speed or time it takes to make this change.
Depending on your equipment, a change can last minutes, hours or even days. By monitoring this metric, you can identify how and where you could improve your shift times, for example by using equipment that is easier to set up.
3. Performance or production
This is one of the simplest but most important manufacturing metrics. Measures the average number of units produced on a machine, line, unit or plant in a specific time period, for example: units per minute.
If your performance suddenly drops, you know you have a problem on the production line. Improved performance can be achieved with automated equipment, lean processes, etc.
4. Capacity utilization
Operations staff love these kinds of production metrics because they indicate how much of the production capacity is being used at any given time. In other words, to what extent are your potential production levels being met or utilized? Displayed as a percentage of total potential production, this metric provides information on the overall capacity at your facility. So when your facility is said to be working at maximum capacity, there is 100% capacity utilization.
Tools such as an operations dashboard are very useful to track these metrics of your business.
5. Overall Equipment Efficiency (OEE)
OEE is recognized globally as a best practice metric and key performance indicator across several industries. OEE evaluates quality, speed, time and downtime (availability x performance x quality), and can be used to indicate the overall effectiveness of a piece of production equipment or an entire production line.
The better your OEE score, the more profitable your business will be. Therefore, a score of 100% means perfect production; You only make high-quality units, as quickly as possible, with no downtime.
6. Production scheduling or achievement
How often does your facility reach its target production level within the established time? This production metric helps you evaluate schedule compliance or production achievement.
This metric measures actual production as a percentage of scheduled production. Lower scores could indicate that a machine is not properly optimized or that production staff are not able to plan changes in practice.
7. Percentage of scheduled maintenance work orders vs. the emergency ones
This is another of the production metrics most used by maintenance personnel, and shows the percentage of the total number of hours spent on maintenance in a given period of time.
For example, if 300 hours were spent on planned maintenance activities out of a total of 400 hours spent on general maintenance, the percentage is 75%. This could also be displayed as a ratio metric indicating how often scheduled maintenance is performed compared to unscheduled (emergency) maintenance.
The idea is to reduce the incidence of unscheduled work as it can cost up to nine times more than scheduled maintenance due to parts having to be found quickly, downtime, overtime, etc.
This metric is the ratio of uptime to planned production time. Operation time is simply the planned production time minus downtime, which is any period of time in which production is stopped. The result is a direct indicator of production availability.
Performance is one of the most used production metrics. There are generally two types:
- The percentage of products that are manufactured correctly and according to specifications the first time, without waste or rework. It is the number of units leaving the process divided by the number of units entering the process during a given period of time.
- The percentage of products produced that may or may not require remanufacturing to meet conformity and quality standards.
10. Customer rejections/returns
This simply indicates how many times customers reject products or request returns because they have received products of poor quality or that do not meet specifications.
It is a direct test of your quality standards; However, if you are measuring all of the above correctly and acting on the result, this should never be a high number!
11. Supplier quality
Measuring supplier quality is crucial to determining the final quality of a product. This metric is the percentage of good quality materials that enter a supplier’s manufacturing process.
Alternatively, the percentage of poor quality materials entering can be measured, i.e. “supplier defect rate”.
12. Fulfillment rate, on-time delivery, percentage of perfect orders
This is another key production metric for the order management process and will ultimately determine your relationship with customers. It shows you the percentage of your orders that are shipped in full and on time. In other words, it indicates the probability that you effectively serve your customers.
The higher your compliance rate, the more likely your customers are to trust you and choose you over your competitors. It also shows how effective your production line is when it comes to getting the product out to the public and how successfully you are meeting production schedules. Your percentage should not be less than 100%.
Spend time figuring out how you can better collect, manage, and act on your business metrics with the help of dashboard software and successfully manage your business growth.