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Most manufacturing organizations are already measuring KPIs, to some extent or another, and realize the importance of doing so. The question then becomes how can they leverage this new technology to further enable the organization to make timelier and better informed decisions? Defining the company strategy, identifying KPIs and assigning ownership of KPIs now become the most difficult parts of this endeavor.
Some of the basic production performance KPIs are listed below:
- 1. Overall equipment effectiveness
- 2. Scheduled production
- 3. Open orders
- 4. Quality tracking-six sigma
- 5. WIP
- 6. Cycle time
- 7. Material costing, usage
- 8. Labor usage, costs-direct and indirect
- 9. Forecasts
- 10. On-time orders
- 11. On-time shipping
- 12. Job, product costing
- 13. Inventory
These production and operational level metrics provide the basis for higher level KPIs, which provide corporate wide performance measurement. These higher level KPIs can be drilled down to the lower level KPIs which comprise it, to zero in on problem areas.
Higher level KPIs:
1. Overall production efficiency of a department, plant or division
2. Comparative analytics for products, plants, divisions, companies
3. Spend analytics
4. Demand forecasting
5. Supplier trending
The big advantage
One of the biggest advantages of a KPI software system is the ability it gives corporate entities to compare the performance of various products, plants, divisions and even companies within the corporation. The KPI software makes it possible for team members to see where the money makers are as well as the marginal or no profit items. Disparate products or facilities can be standardized within the KPI software to allow for comparison.
Multiple data sources
KPIs can also be aggregated, and weighted, so that they are accounted for and prioritized within the software system. Data from multiple sources already in place within the corporation, such as ERP, CRM, MES and other databases and spread sheets can be incorporated into the KPI software.
On-demand KPI software
Due to on-demand KPI software’s ability to access this information in near real-time, it can be used to support decisions which improve production performance as well as corporate level strategy planning. There are several impressive advantages to the on demand model of delivery for production performance interfaces. One is that it can be configured, deployed and implemented without a lengthy development and deployment cycle. Cost savings on several levels can also be realized. There is no need for “additional IT infrastructure” with an on demand model for KPI software.
