Production Indicators Main Indicators and Examples

The production indicators are the different metrics that companies use to evaluate, analyze and monitor production processes. These performance measures are commonly used to evaluate success against specific strategic goals and objectives..

Measuring, analyzing and improving production indicators effectively is not as simple as it seems. While there are certain indicators that work well for specific job functions, it is often the case that multiple combinations of indicators are needed to ensure that a broader business objective is met..

In production, each improvement area or strategic objective generally requires multiple indicators. These are grouped around your specific strategic objective. 

The MESA (Manufacturing Enterprise Solutions Association) organization has sponsored research to help the manufacturing market identify the most important indicators.

By achieving this identification of indicators, the organization helps decision-makers to understand the importance of these indicators, as well as their relationship with measurement programs and with the use of measurement solutions. software.

Article index

• 1 Main production indicators
  • 1.1 To improve customer experience and response time
  • 1.2 To improve quality
  • 1.3 To improve efficiency
  • 1.4 For inventory reduction
  • 1.5 To ensure compliance with standards
  • 1.6 To reduce maintenance
  • 1.7 To reduce costs and increase profitability
• 2 Examples
  • 2.1 Formula of the indicator General Effectiveness of the Equipment
  • 2.2 Example of calculation of the EGE indicator
• 3 References

Main production indicators

According to the most recent survey of indicators, the following are the production indicators most used by batch, process and hybrid manufacturers:

To improve customer experience and response time

Production cycle time

Measures the time it takes to manufacture a given product, from when the production order is released until the finished products are delivered.

Time to make changes

Measures the time it takes to change a production line, from when a product is finished to start manufacturing a different product.

To improve quality

Quality performance

Indicates the percentage of products that are manufactured correctly the first time during the production process, adjusted to specifications, without waste or rework.

Customer rejections or product returns

Measures how many times customers reject products and return them, based on receipts of defective or out-of-specification products.

Rejection rate

It is the percentage of units produced that are rejected, during a given period of time or lot.

To improve efficiency

Production performance

Measures the amount of product that is manufactured on a machine, line, or plant over a specified period of time.

Capacity utilization

Indicates how much of the total production capacity is being used at any given time.

Overall effectiveness of the team

This multidimensional indicator is a multiplier of availability x performance x quality, and is used to indicate the general effectiveness of the production centers or of a complete production line.

Production schedule or achievement

Measures in what percentage of time a desired production level is reached within a specified time schedule.

For inventory reduction

Inventory / shifts

Measure the efficient use of inventory materials. It is calculated by dividing the cost of the merchandise sold by the average inventory used to produce that merchandise..

To ensure compliance with standards

Health and safety incidents

Measures the number of health and safety incidents that were recorded as having occurred over a period of time.

Number of non-compliance events in a year

Measures the number of times a plant operated outside the normal regulatory guidelines for compliance rules during a one-year period. These non-compliances must be fully documented in terms of the specific time of non-compliance, reasons and resolutions..

To reduce maintenance

Percentage of preventive maintenance work orders vs. corrective

Indicator of how often preventive maintenance is carried out, compared to unplanned maintenance.

Downtime vs. operation time

This relationship between downtime and uptime is a direct indicator of the availability of manufacturing assets..

To reduce costs and increase profitability

Production cost as a percentage of revenue

Ratio of total production costs to total revenue generated by a production plant.

Net operating profit

Measures financial returns to investors, either before or after taxes, for a production plant.

Average contribution margin per unit

It is calculated as a relationship between the profit margin generated by a production plant when producing a certain unit or volume.

Energy cost per unit

Measures the cost of energy (electricity, steam, gas, etc.) required to produce a specific unit or volume.

Examples

General Equipment Effectiveness indicator formula

Overall Equipment Effectiveness (EGE) is a widely accepted set of non-financial indicators that reflects the success of production.

EGE divides the effectiveness of a manufacturing facility into three separate but measurable components: availability, performance, and quality. Each component records an aspect of the process that can in turn be a target for improvement.

EGE = Availability x Performance x Quality

Being:

Availability = run time / total time

Percentage of machine operating actual production time by machine available production time.

Performance = total counter / standard counter

Percentage of total parts produced by the machine between the standard production rate of the machine.

Quality = good units produced / total units produced

Percentage of good parts out of the total parts produced by the machine.

EGE indicator calculation example

Let it be a production facility that is scheduled to operate on an 8 hour (480 minute) shift with a 30 minute scheduled break. During the shift, the center was inactive for 60 minutes due to machine breakdown (unplanned time).

Runtime = 480 scheduled minutes - 30 minutes scheduled break time - 60 minutes unscheduled downtime = 390 minutes.

Therefore:

Availability = 390 minutes / 480 minutes = 81.25%

The production center manufactured a total of 242 units during this shift.

The standard counter for the piece produced is 40 units / hour. In other words, a part should be produced every 1.5 minutes. It then has:

Total counter = total units produced / run time

Standard counter = 1 / standard time

Therefore:

Yield = (units produced * standard time) / runtime

Performance = (242 units * 1.5 minutes) / 390 minutes = 93.08%

Of the 242 total units produced, 21 were defective.

Let the rejection rate be: (defective units / produced units) * 100

So the rejection rate was (21/242) * 100 = 8.68%

Therefore:

Quality = (units produced - defective units) / units produced

Quality = (242 - 21) / 242 = 91.32%.

Finally, you have:

EGE = (Availability = 81.25%) * (Performance = 93.08%) * (Quality = 91.32%) = 69.06%

References

1. Mark Davidson (2013). 28 Manufacturing Metrics that Actually Matter (The Ones We Rely On). LNS Research. blog.lnsresearch.com.
2. Wikipedia, the free encyclopedia (2018). Performance indicator. Taken from: en.wikipedia.org.
3. Wikipedia, the free encyclopedia (2018). Overall equipment effectiveness. Taken from: en.wikipedia.org.
4. Pat Hennel (2014). Manufacturing Metrics that Matter Most: A Comprehensive Checklist. Cerasis. Taken from: cerasis.com.
5. Matt Nichol (2015). The 12 most important metrics to measure in manufacturing. Matthews Australasia. Taken from: blog.matthews.com.au.