KPI’s performing tool in achieving more disciplined higher production

Sharing the most important KPI’s - 21 factors of performing tool for a manufacturing organization from my professional expertise of learning process:

1.  Capacity Utilization – This measures how much of available capacity with actually using on current production and it is the higher the better. Land, Buildings, Machinery, Equipment is expensive assets and the maximum utilization of this are required. It also helps to manage that a company what really needs to sell with the products manufactured quantities cannot go for low sales by balancing the work load of production conveyor.

2.  On Standard Operating Efficiency – A piece rate or incentive system in place needs to measure how employees are performing against the labour standards which can be used to cost the product. If these numbers are low, it is beneficial to examine methods and do post-production analysis. It is very common for companies to underestimate labour costs, and this KPI can helps to identify this.

3.  Overall Operating Efficiency (OOE) – This is one of the favourite because it includes on standard time as well as off standard time. These are trying to maximize this percentage so that employees are adding value to the majority of the time which are clocked in and present. 

4.  Overall Equipment Effectiveness OEE– This metric measures the overall effectiveness of a piece of production equipment or the entire line. “Availability x Performance x Quality. This is a great KPI to maximize to ensure which are running the plant effectively.

5.  Machine Downtime – This KPI and the two below are components of OEE above, but worth measuring on its own. This includes scheduled downtime for maintenance, set-ups and un-scheduled downtime and can include machine changeover.

6.  Un-scheduled Down Time – This could be a killer and one to minimize because it affects other processes in the production chain. Scheduled and predictive maintenance can help minimize un-scheduled downtime. There are wireless sensors you can use which can help support predictive maintenance to reduce un-scheduled downtime.

7.  Machine Set Up Time - A lot of production time can be lost to set up and changeovers. Implementing SMED (Single Minute Exchange of Dies or similar techniques) can really help keep this lost time to a minimum. Look for ways to incorporate parts of the set up so that it can be internal to the process to avoid taking machines offline for any longer than it needs to. Quick changeover setups also reduce this time.

8.  Inventory Turns – In today’s Lean environment and pull approach, keeping inventories to a minimum can really help free up cash and give the ability to respond to changing customer needs much more efficiently and with better delivery times. It also keeps on-hand inventory fresh and relevant to avoid obsolescence and mask quality problems. 

9.  Inventory Accuracy – There is nothing worse than putting a work order into production only to find the raw goods inventory was inaccurate. This either delays the start of production or causes delays in the line if the order happened to make it into process. A rule to never let an order begin production unless everything was available in-house for the order. This helps to manage and maintain the supply chain to keep right amount of inventory on hand to keep things running.

10.  Quality – This is a no-brainer and table stakes today, but still necessary to measure. There are many ways to measure quality, and listing a few below for consideration. Defective percentage is one of many ways that can measure quality. Establishing clear and consistent standards goes a long way to reaching one’s quality goals. The only way to continuously improve is to learn from the mistakes, so don't just measure the quality - determine the root cause and fix it.

11.  First Pass Yield – The percentage of products manufactured correctly and to spec the first time through the process and getting this number up reduces the next two listed below.

12.  Re-work – There is no bigger waste of time and raw materials than rework. By implementing quality at the source and effectively training people can go a long way to minimizing this waste?

13. Scrap – Raw material costs are expensive so minimizing scrap is an important factor. The more robust of processes and training programs are the less scrap which is likely to produce. When doing production from scrap, do the best to recycle it if possible.

14.  Failed Audits – There is nothing worse than having a shipment ready to go out the door that fails a final quality control audit. Better here than on the customer's doorstep, but this still leads to rework, scrap and delays. The goal for this KPI should be 0 failed audits, and if it’s not, a root cause analysis is in order.

15. On-Time Delivery – This is a KPI that really keeps customers happy but is also motivating towards production employees. Set the goal for 100% on-time weekly and consider rewarding employees if they achieve it and many of the other leading indicators mentioned help drive this one. 

16. Customer Returns – There is nothing worse than getting a defective product back from customers & not only is it embarrassing but also it ruins customer confidence. Even though this is a result indicator, it can help to determine problems in the production chain when evaluating returned products and it strives for a good goal to achieve zero returns.

17. Training Hours – This is a great leading indicator that can drive a lot of the other KPIs on this list. Training doesn’t solve every problem, but there is no substitute for a good training and on boarding program. Too many companies still use the sink or swim method which creates a lot of problems. 

18. Employee Turnover – Happy employees make happy customers. If turnover is high, it is time to do some root cause analysis to determine why. Quality and efficiency problems often stem from high turnover due to training new inexperienced employees. 

19. Re-portable Health & Safety Incidents – Here's another KPI to strive for zero on, many companies have embedded this into culture. Accidents drive up workers' compensation rates and are hard on employee morale.

20. Revenue/Employee – This is a basic indicator but can be a quick helpful way to see how the operation is doing overall; improving, standing still or becoming less efficient. It is also a good metric to use to compare the company’s against others with similar industries.

21. Profit/ Employee – This KPI is an important one even more than the above all. Even though it’s lagging, it takes into consideration how well the company is doing on many of the leading indicators above. Revenue/ employee may looks good but it may be seen to have opportunities to improve profitability.

SUNDARAMURTHY VELMURUGAN – linkedin.com/in/sundaramurthy velmurugan 299586110

LEATHER PROFESSIONAL CONSULTANT from a2z Leather Professional Consultancy, PONDICHERRY

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