Manufacturers invest in data collection technology because the information that’s available contributes to better decision-making.
Gathering the data, however, represents partial progress toward improvement and when you analyze the information you’ve collected, you get even more value out of it.
The Manufacturing Enterprise Solutions Association conducted research and developed a list of 28 metrics that manufacturers must measure in order to achieve essential goals. Today, we will dive into the metrics related to Customer Experience and Responsiveness, Quality and Efficiency.
Improving Customer Experience and Responsiveness
- On-time Delivery to Commit: The percentage of deliveries that are completed according to the schedule promised to the customer.
- Manufacturing Cycle Time: Amount of time to complete production, from releasing the order to the finished good.
- Time to Make Changeovers: Time required to switch a manufacturing line or plant in order to make a different product.
Improving Quality
- Yield: Percentage of products that are correctly manufactured the first time through the process (e.g., without waste, scrap, or reworking)
- Customer Rejects/RMA/Returns: Number of incidences of product rejections, returns, or return requests that result from unacceptable quality.
- Supplier’s Quality Incoming: Percentage of quality materials from the total provided by an incoming supplier.
Improving Efficiency
- Throughput: Amount of product—on a particular line or machine—manufactured over a specific period of time.
- Capacity Utilization: Percentage of total manufacturing output capacity that is utilized at a specified time.
- Overall Equipment Effectiveness (OEE): Multiply Availability X Performance X Quality to evaluate the overall effectiveness of a piece of production equipment or an entire line.
- Schedule or Production Attainment: The percentage of time that the target level of production is achieved within a specified schedule.
Reducing Inventory
- WIP Inventory/Turns: Multiply the cost of goods sold (COGS) by the average inventory used to produce the goods, in order to determine the efficiency of the use of materials in inventory.
Are you a manufacturer? Be sure to check back soon for part two of this blog series, which will address Ensuring Compliance, Reducing Maintenance, Increasing Flexibility & Innovation, Reducing Costs and Increasing Profitability.
Questions?
About the Author:
RAD DeRose is the President & CEO of L-Tron Corporation. He has over 30 years experience in industrial automation and data collection technology solutions and brings a deep industry knowledge-base on the challenges faced in the commercial and public safety sectors. RAD can be reached at (800) 830-9523 x114; rad.derose@L-Tron.com