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This is an exhaustive list of Key Performance Indicators (KPIs) for a Manufacturing Operations Manager.<\/p>\nThis is an exhaustive list of Key Performance Indicators (KPIs) for a Manufacturing Operations Manager.<\/p>\n
These KPIs are aligned with Lean initiatives–specifically, Cultural Transformation, Continuous Improvement, elimination of all Wastes, associates becoming process and problem solvers at Gemba. \u00a0The tools to be implemented after Lean culture change include 6S, Kanban, Kaizen, and Lean Six Sigma. Our goal is to bring value beyond the customers\u2019 expectations.<\/p>\n
1. On-Time Delivery to Commit<\/strong> \u2013 This metric is the percentage of time that manufacturing delivers a completed product on the schedule that was committed to customers.<\/p>\n 2. Manufacturing Cycle Time<\/strong> \u2013\u00a0Measures the speed or time it takes for manufacturing to produce a given product from the time the order is released to production, to finished goods.<\/p>\n 3. Time to Make Changeovers<\/strong> \u2013 Measures the speed or time it takes to switch a manufacturing line or plant from making one product over to making a different product.<\/p>\n 4. Yield<\/strong> \u2013 Indicates a percentage of products that are manufactured correctly and to specifications the first time through the manufacturing process without scrap or rework.<\/p>\n 5. Customer Rejects\/Return Material Authorizations\/Returns<\/strong> \u2013 A measure of how many times customers reject products or request returns of products based on receipt of a bad or out of specification product.<\/p>\n 6. Suppliers Incoming Quality<\/strong> \u2013 A measure of the percentage of good quality materials coming into the manufacturing process from a given supplier.<\/p>\n 7. Throughput<\/strong> \u2013 Measures how much product is being produced on a machine, line, unit, or plant over a specified period of time.<\/p>\n 8. Capacity Utilization<\/strong> \u2013 Indicates how much of the total manufacturing output capacity is being utilized at a given point in time.<\/p>\n 9. Overall Equipment Effectiveness (OEE)<\/strong> \u2013 This multi-dimensional metric is a multiplier of Availability x Performance x Quality , and it can be used to indicate the overall effectiveness of a piece of production equipment, or an entire production line.<\/p>\n 10. Schedule or Production Attainment<\/strong> \u2013 A measure of what percentage of time a target level of production is attained within a specified schedule of time.<\/p>\n 11. WIP Inventory\/Turns<\/strong> \u2013 A commonly used ratio calculation to measure the efficient use of inventory materials. It is calculated by dividing the cost of goods sold by the average inventory used to produce those goods.<\/p>\n 12. Reportable Health and Safety Incidents<\/strong> \u2013 A measure of the number of health and safety \u00a0incidents that were either actual incidents or near misses that were recorded as occurring over a period of time. (OSHA: Occupational Safety and Health Association.)<\/p>\n 13. Reportable Environmental Incidents<\/strong> \u2013 A measure of the number of health and safety incidents that were recorded as occurring over a period of time.<\/p>\n 14. Number of Non-Compliance Events \/ Year<\/strong> \u2013 A measure of the number of times a plant or facility operated outside the guidelines of normal regulatory compliance rules over a one-year period. These non-compliances need to be fully documented as to the specific non-compliance time, reasons, and resolutions.<\/p>\n 15. Percentage Planned vs. Emergency Maintenance Work Orders<\/strong> \u2013 This ratio metric is an indicator of how often scheduled maintenance takes place, versus more disruptive\/un-planned maintenance.<\/p>\n 16. Downtime in Proportion to Operating Time<\/strong> \u2013 This ratio of downtime to operating time is a direct indicator of asset availability for production.<\/p>\n 17. Rate of New Product Introduction<\/strong> \u2013\u00a0Indicates how rapidly new products can be introduced to the marketplace and typically includes a combination of design, development and manufacturing ramp up times.<\/p>\n 18. Engineering Change Order Cycle Time<\/strong> \u2013 A measure of how rapidly design changes or modifications to existing products can be implemented all the way through documentation processes and volume production.<\/p>\n 19. Total Manufacturing Cost per Unit Excluding Materials<\/strong> \u2013 This is a measure of all potentially controllable manufacturing costs that go into the production of a given manufactured unit, item or volume.<\/p>\n 20. Manufacturing Cost as a Percentage of Revenue<\/strong> \u2013 A ratio of total manufacturing costs to the overall revenues produced by a manufacturing plant or business unit.<\/p>\n 21. Net Operating Profit<\/strong> \u2013 Measures the financial profitability for all investors\/shareholders\/debt holders, either before or after taxes, for a manufacturing plant or business unit.<\/p>\n 22. Productivity in Revenue per Employee<\/strong> \u2013 This is a measure of how much revenue is generated by a plant, business unit or company, divided by the number of employees.<\/p>\n 23. Average Unit Contribution Margin<\/strong> \u2013 This metric is calculated as a ratio of the profit margin that is generated by a manufacturing plant or business unit, divided into a given unit or volume of production.<\/p>\n 24. Return on Assets\/Return on Net Assets<\/strong> – A measure of financial performance calculated by dividing the net income from a manufacturing plant or business unit by the value of fixed assets and working capital deployed.<\/p>\n 25. Energy Cost Per Unit – <\/strong>A measure of the cost of energy (electricity, steam, oil, gas, etc.) required to produce a specific unit or volume of production.<\/p>\n 26. Cash-to-Cash Cycle Time<\/strong> \u2013 This metric is the duration between the purchase of a manufacturing plant or business unit\u2019s inventory, and the collection of payments\/accounts receivable for the sale of products that utilize that inventory \u2013 typically measured in days.<\/p>\n 27. EBITDA<\/strong> \u2013 This metric acronym stands for Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a calculation of a business unit or company’s earnings, prior to having any interest payments, tax, depreciation, and amortization subtracted for any final accounting of income and expenses. EBITDA is typically used as top-level indication of the current operational profitability of a business.<\/p>\n 28. Customer Fill Rate\/On-Time delivery\/Perfect Order Percentage<\/strong> – This metric is the percentage of times that customers receive the entirety of their ordered manufactured goods, to the correct specifications, and delivered at the expected time.<\/p>\n","protected":false},"excerpt":{"rendered":" This is an exhaustive list of Key Performance Indicators (KPIs) for a Manufacturing Operations Manager. These KPIs are aligned with Lean initiatives–specifically, Cultural Transformation, Continuous Improvement, elimination of all Wastes, associates becoming process and problem solvers at Gemba. \u00a0The tools to be implemented after Lean culture change include 6S, Kanban, Kaizen, and Lean Six Sigma.… Do You Know All the KPIs for a Manufacturing Operations Manager?<\/span><\/a><\/p>\n","protected":false},"author":4,"featured_media":2315,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"neve_meta_sidebar":"","neve_meta_container":"","neve_meta_enable_content_width":"","neve_meta_content_width":0,"neve_meta_title_alignment":"","neve_meta_author_avatar":"","neve_post_elements_order":"","neve_meta_disable_header":"","neve_meta_disable_footer":"","neve_meta_disable_title":"","footnotes":""},"categories":[82],"tags":[31,331,29,1063,30,1064],"class_list":["post-2314","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-operations","tag-continuous-improvement","tag-gemba","tag-kaizen","tag-kpi-lean-management","tag-manufacturing","tag-manufacturing-operations"],"_links":{"self":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/2314","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/comments?post=2314"}],"version-history":[{"count":1,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/2314\/revisions"}],"predecessor-version":[{"id":2316,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/posts\/2314\/revisions\/2316"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media\/2315"}],"wp:attachment":[{"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/media?parent=2314"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/categories?post=2314"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/flevy.com\/blog\/wp-json\/wp\/v2\/tags?post=2314"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Improving Quality: Six Sigma<\/strong><\/h2>\n
Improving Efficiency: Eliminate all waste<\/strong><\/h2>\n
Reducing Inventory: Consider Kanban \u201cpull\u201d system<\/strong><\/h2>\n
Ensuring Compliance<\/strong><\/h2>\n
Reducing Maintenance\/Preventative Maintenance (PM)<\/strong><\/h2>\n
Increasing Flexibility & Innovation: Continuous Improvement<\/strong><\/h2>\n
Reducing Costs & Increasing Profitability<\/strong><\/h2>\n