A manufacturing enterprise without Key Performance Indicators (KPI) or Key Metrics is like a rudderless ship in the ocean. It keeps on operating without any definite aim or ambition in sight. To achieve any desired goal, enterprises need to measure their everyday operations using advanced technological solutions so that they can manage them better. To do this, they need to track performance, efficiency and productivity.
Tracking these parameters represents the overall health of an enterprise and enables it to make informed decisions, optimize existing processes, and ensure your business is on track to achieve desired goals.
Let us look at key manufacturing metrics that you should be tracking in 2024.
Inventory
Inventory is one of the main drivers of production efficiency. A manufacturer’s capability to ensure optimum inventory levels is a direct indicator of their overall efficiency and on-time delivery.
Accurately tracking inventory movement and consumption right from procurement to delivery ensures the availability of the right materials at the right time, thereby reducing job delays, rescheduling, and emergency procurement costs.
Overall Equipment Effectiveness (OEE)
OEE is one of the primary parameters to measure manufacturing efficiency. A manufacturer’s ability to make full use of machines, equipment and tools to manufacture high-quality products at lower costs indicates high OEE.
To do this, manufacturers must use technology to its fullest potential to track machine run-time, downtime and idle time. Any deviations should be swiftly acted upon to prevent future breakdowns. OEE has a direct impact on the quality of the production yield.
Shop Floor Metrics
The shop floor is the heart of a manufacturing enterprise. To run a highly efficient shop floor, manufacturers need to track parameters for each job, machine and personnel. Tracking operator or machine-wise cycle time and lead time allows manufacturers to identify inefficiencies and take corrective measures. With capable ERP software, manufacturers can track real-time shop floor operations and improve efficiencies of machines, employees, and materials at optimum cost.
High-Quality Production Yield
Tracking quality at each manufacturing phase is one of the critical KPIs for manufacturers as it determines the final yield quality. Tracking overall scrap rates, defect rates and rework frequency allows manufacturers to meet the required quality standards and deliver high-quality goods to customers.
Scrap Rates
Containing scrap rates to a bare minimum has a direct impact on production cost and product quality. With an able ERP software, manufacturers can track scrap quantity at each phase of manufacturing per machine, operator, shift and production line. Based on the scrap weight, manufacturers can easily arrive at a Cost of Poor Quality (COPQ) for financial and audit purposes. Categorizing scrap into various categories allows them to optimize existing production processes and reduce scrap rates.
Supplier Analytics
Tracking and analyzing supplier performance is critical in achieving high-quality products and delivering them on time to customers. With capable ERP software, manufacturers can get a real-time view of their supplier’s metrics such as raw material quality, on-time delivery, procurement costs, procedure adherence etc. With this data, manufacturers can evaluate the overall performance of their suppliers and take corrective measures in case of any deviations.
Labor Productivity
Tracking labor performance and productivity is one of the critical aspects of manufacturing. Monitoring login and logout times per work center, scrap rates, yield quantity, quality, and material usage allows manufacturers to effectively determine overall labor utilization levels. It also enables them to plan training and certification to improve their skill levels, efficiency and workforce productivity.
Customer Satisfaction
The very purpose of a manufacturing enterprise and its operations hinges on customers and how satisfied they are. It is a crucial parameter for long-term success and organizational growth. Factors such as on-time delivery, high-quality products, and service efficiency impact customer satisfaction levels. Tracking customer feedback and acting upon it also determines the commitment of the enterprise towards its customers.
Conclusion
Key manufacturing metrics and KPIs are critical to a manufacturer’s success, as they allow a data-driven approach to key decision-making, process improvement and overall enterprise management. They help manufacturers stay ahead of their competition, beat market volatility and become more responsive to customer demands.
With OmegaCube ERP’s powerful tracking features for each functionality, manufacturers can get a real-time view of their day-to-day operations and track key parameters right to the bottom. From the shop floor to the top floor, everyone has data at their fingertips enabling them to make the right decisions and improve overall productivity and profitability.
Make 2024 a year of exponential growth and profitability.
