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A KPI or key performance indicator is a way to identify how successful an organization is. By tracking key indicators, an organization can get a sense of how successful they are at meeting their primary goals. An organization’s primary goals are designed to drive a company towards success, so it’s natural that an organization would want to have some sort of indication that these goals are being met.
For this reason, the best indicators to track are the ones that fall under a specific area or goal that is important to the organization. Typically, these key indicators are tracked through intelligent software like enterprise resource planning (ERP) solutions that analyze and report on key indicators and how they are performing. You can improve your manufacturing process with ERP software by inputting your main KPIs and getting the ERP solution to track them for you.
But which exactly should you be focusing on? Here are 10 key performance indicators that manufacturers should be tracking.
1. Manufacturing Cycle Time
If your goal is to improve customer experience, then you should be tracking how long it takes to produce your product from beginning to end delivery.
2. Manufacturing Costs per Unit
Not including materials, this key indicator is meant to keep track of the amount of money spent on controllable manufacturing costs.
A key quality measurement is how many products are produced successfully the first time around without being scrapped or reworked.
4. Inventory Efficiency
A useful calculation that involves dividing the cost of goods sold by the average amount of inventory used to produce those goods.
Returns are a key indicator of the quality of your product, especially if it is being returned due to faulty manufacturing.
6. Rate of New Product Introduction
So, how does erp help in flexible manufacturing and innovation? It can measure how long it takes for a new product to get designed, produced, and introduced into the market.
7. Net Operating Profit
Measure the profits for all investors, shareholders, and/or debt holders involved in the organization
8. Revenue per Employee
See how well your employees are doing with metrics determined by revenue divided by the number of employees per plant or business unit.
9. Planned vs. Emergency Maintenance
Measures how much downtime is due to maintenance that is planned versus unplanned.
10. Compliance Indicators
Other key indicators include the ones relating to compliance and regulation, like the number of health and safety incidents, environmental incidents, and overall non-compliance events in an organization.
We Can Help
IWI Consulting Group has the expertise needed to equip you with an ERP solution that can accurately measure your KPIs and supply reports and insights that will help your business. As ERP support experts we can also help you determine which KPIs would be the best for your manufacturing business. Contact us today for more information.