Every manufacturing business wants to be as efficient as possible. An essential way to understand if your manufacturing business is working efficiently or how it can improve is by using manufacturing metrics. Check out these manufacturing metrics that every manufacturer should use in 2022:
Overall Equipment Effectiveness (OEE)
This metric is used to measure equipment effectiveness and the total system performance. OEE captures all losses related to production, such as poor scheduling and absenteeism and includes the lost efficiency of the machine while not producing any product or while waiting for materials or utilities.
It can, therefore, be considered a “golden number” providing a single set of indicators that can be used to show overall plant performance.
This metric shows the amount of work actively in the production process at a given time. The key here is to show how much work is being carried over from one step to another in the value stream. This WIP metric gives a sense of how planned operations are being executed and what effects they have on overall plant performance.
Inventory turnover measures how many times a plant’s inventory is sold or used up during a certain period. If inventory quantities are high, there is more cash tied up in the business and this means that money can’t be used to expand operations.
For example, if an item stays in stock for six months, it will take at least six months worth of sales to get that money back.
Also called first-pass yield, this metric refers to the percentage of items that are made correctly the first time. If a fabrication shop has a 95 percent yield rate on an item, then 5 percent of the produced items are defective and need to be reworked, repaired or scrapped (in worst cases).
Yield is one of the most important metrics companies can use to optimize their production process and quality.
Lead Time (LT)
Lead Time is the time it takes for an order to be filled from when it was placed and in simplest terms, is the time elapsed between the moment a customer decides to buy and when they receive their product.
Generally speaking, shorter lead times can be beneficial in creating competitive advantage because of the increase in responsiveness and flexibility within a business.
OTIF is the percentage of customer orders that are received completely and on time. Companies can use this to measure how well they meet their customers’ demands and expectations. When OTIF rates are high, it means suppliers have a better understanding of customer fulfillment needs.
This metric is often disregarded as a financial drain on a business. But, this isn’t necessarily the case. Scrap Rate is used to show the amount of raw material or parts that are scrapped during a production process and can be a valuable measure for understanding how much product waste the facility produces. A system to measure scrap is an important tool manufacturing facilities can use to reduce waste.
Cost per Unit (CPU)
CPU shows the total cost of producing one unit of product. It is most commonly used in service industries to measure how well they are performing against their projections.
This metric is used to measure how well operations are being carried out by the supplier. This means that if a customer has an order for ten items but only nine arrive on time, then this OTIF rate will be lower than for the other metrics here.
Production downtime is the amount of time that a machine isn’t able to produce due to any stoppages, including planned and unplanned. Downtime is most commonly measured in minutes per shift. Measuring and tracking downtime can provide valuable insights to facility management, allowing for targeted process improvements.
Measuring Metrics the Right Way
For companies that want to start using these metrics, they should take into account that simply collecting this data is not enough. Getting the right information requires thorough planning and the use of the appropriate technology. Each manufacturing industry is unique in its own way, so companies have to make sure they choose a system that can accurately measure these metrics for their specific needs.
VersaCall has helped many manufacturing industries to improve their systems that measure these metrics so that they can get the most out of their business. Get more information from VersaCall of how their systems can help your business.