How can you design and measure manufacturing operations performance holistically?

2 Manufacturing operations metrics and KPIs

Metrics and KPIs are the quantitative indicators that help you monitor and evaluate your manufacturing operations performance. Metrics are the raw data that show how well you are performing in a specific area, such as cycle time, defect rate, or inventory turnover. KPIs are the derived metrics that show how well you are achieving your strategic objectives, such as customer satisfaction, profitability, or market share. To select the right metrics and KPIs for your manufacturing operations, you need to align them with your balanced scorecard perspectives, ensure they are SMART (specific, measurable, achievable, relevant, and time-bound), and use a mix of lagging and leading indicators.

3 Process mapping and analysis

Process mapping and analysis are the techniques that help you understand and improve your manufacturing operations processes. Process mapping is the visual representation of the steps, inputs, outputs, and resources involved in a process. It helps you identify the value-adding and non-value-adding activities, the sources of waste and variation, and the opportunities for improvement. Process analysis is the systematic examination of the process performance, using tools such as flowcharts, Pareto charts, fishbone diagrams, and control charts. It helps you measure the efficiency, effectiveness, and quality of the process, and determine the root causes of problems and the potential solutions.

4 Benchmarking and best practices

Benchmarking and best practices are the methods that help you compare and learn from your manufacturing operations performance. Benchmarking is the process of measuring your performance against a standard or a competitor, using metrics and KPIs. It helps you identify the gaps and strengths in your performance, and set realistic and challenging targets for improvement. Best practices are the proven methods or techniques that lead to superior performance in a specific area or process. They help you adopt and adapt the best practices from your own or other industries, and implement them in your manufacturing operations.

5 Continuous improvement and innovation

Continuous improvement and innovation are the principles that help you sustain and enhance your manufacturing operations performance. Continuous improvement is the ongoing effort to improve your processes, products, and services, using methods such as Plan-Do-Check-Act (PDCA), Kaizen, or Six Sigma. It helps you eliminate waste, reduce variation, increase efficiency, and satisfy customers. Innovation is the creation and implementation of new or improved processes, products, and services, using methods such as brainstorming, prototyping, or Design Thinking. It helps you generate value, differentiate yourself, and gain a competitive advantage.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?