The 12 most important metrics

to measure in manufacturing

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 You can’t manage it if you can’t measure it. Any manufacturer who wants to take their
business to the next level needs to collect and analyse the relevant data, or metrics.

Numbers are powerful things in business. The right metrics can help you find the sticking
points or weak spots in your production line and processes, giving you the information and
insights you need to continuously improve and refine your business.

But you can’t be unsystematic about it. As well as collecting the right metrics in the right way,
you also need a proper process in place to review — and then act on — the results.

Here are the 12 most important metrics to measure in

manufacturing that are essential for a successful business:

1: Manufacturing cycle time. Cycle time is the total time from the beginning to end of a
process. In manufacturing, it measures the time taken for a product to pass through all
machines, processes and cycles to become a finished product. The total time an item
spends in the manufacturing system between the order release and completion is the
“total manufacturing cycle time”. Reducing this time can deliver reduced costs, better
response to customers and increased flexibility.

2. Time to make changeovers. Changeover is the process of converting a line or

machine from running one product to another. So this metric simply measures the speed
or time it takes to make this switch. Depending on your equipment, a changeover can
last minutes, hours or even days. By tracking this metric, you can identify how and where
you could improve your changeover times, for example, by using equipment that is
easier to set up and configure. (This software helps deliver a more streamlined operation
with quick changeovers, as well as validation and error detection. This case study shows
how Kimberley-Clark Australia achieved this.)

3. Throughput. This is one of the simplest — yet most important — manufacturing

metrics. It measures the average number of units being produced on a machine, line,
unit or plant over a specified period of time, e.g.: units per minute. If your throughput
suddenly decreases, you know that you have an issue on the line. Improving throughput
can be achieved with automated equipment, lean processes and so on.

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 4. Capacity utilisation. Operations staff love this metric because it indicates how much of
the total manufacturing output capacity is being utilised at a given point in time. In other
words, to what degree are your potential output levels are being met or used? Displayed
as a percentage of total potential output, this metric gives insight into the overall slack
that is in your facility. So when your facility is said to be working at full capacity, there is
100% capacity utilisation.

5. Overall Equipment Effectiveness (OEE). An analysis of efficiency and productivity,

OEE is globally recognised as a best practice measure and key performance indicator
in a range of industries. OEE assesses quality, speed and downtime (availability x
performance x quality), and can be used to indicate the overall effectiveness of a piece of
production equipment or an entire production line. The better your OEE score, the more
profitable and cost-effective your business will be. So an OEE score of 100% is perfect
production: manufacturing only high quality units, as fast as possible, with no downtime.
Learn about how to measure and improve OEE.

6. Schedule or production attainment. How often does your facility attain its target level
of production within the set time? This is the “schedule attainment score” or “production
attainment score”. This metric measures the actual production as a percentage of the
scheduled production. Lower percentages may indicate that a machine isn’t optimised
properly or that the production team isn’t able to plan for real-life changes.

7. Percentage planned vs emergency maintenance work orders. Planned

maintenance percentage (PMP) is a widely used measure for maintenance staff, and
shows the percentage of the total number of maintenance hours spent on planned
maintenance activities in a given time period. For example, if 300 hours were spent on
planned maintenance activities out of 400 total hours spent on all maintenance, the PMP
is 75%. This could also be shown as a ratio metric, which indicates how often scheduled
maintenance takes place versus more unplanned (emergency) maintenance — in this
case 3:1. The idea is to reduce the incidences of unplanned work, because they can
cost up to nine times more than planned maintenance due to rushed parts, service
callouts, downtime, overtime and so on. (You may find this article valuable on three steps
to a successful planned maintenance program, while this blog looks more closely at the
difference between preventive maintenance vs breakdown repair — don’t get caught out:
choose a local provider, with 24-hour support.)

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 8. Availability. This metric is the ratio of operating time to planned production time.
Operating time is simply the planned production time minus downtime, which is any
period of time where production is stopped. The result is a direct indicator of availability
for production.

9. Yield. Yield is one of the oldest metrics in the book. There are typically two:

First Pass Yield: is the percentage of products that are manufactured correctly and
to specifications the first time, without scrap, re-run or rework. It is the number of units
coming out of the process divided by the number of units going into the process over a
set period of time.

Overall Yield: is the percentage of products produced that may, or may not, require re-
work to fall within compliance and quality standards.

10. Customer rejects/returns. This simply tells you how many times customers reject
products or request returns because they have received bad-quality or out-of-
specification products. It is direct evidence of your quality standards; however, if you are
measuring all of the above correctly and acting on the result, this should never be a high
number!

11. Supplier quality incoming. Measuring supplier quality is crucial in determining a

product’s final quality. This metric is the percentage of good quality materials coming
into the manufacturing process from a supplier. Alternatively, you can measure the
percentage of bad quality materials coming in, i.e. “supplier defect rate”.

12. Customer fill rate, on-time delivery, perfect order percentage: This metric is key to
the order-management process and will ultimately determine your customer relationships.
It shows you the percentage of your orders that are shipped in full and on time as a
percentage of all your orders. In other words, it tells you the likelihood that you will
effectively service your customers. The higher your fill rate, the more likely your customers
are to trust you and choose you over your competitors. It also helps show how efficient
your production line is when it comes to getting the product out of the door, and how
successfully you are keeping to production schedules. Never aim lower than 100%.

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 Remember, what you don’t know CAN hurt you. Put aside some time to work out how you can
better collect, manage and act on your business metrics, and you’ll have a powerful way to
manage your business growth.

Additional resources

Explore more about OEE by clicking on the link below to download a free whitepaper. You
may also find these related papers explaining lean, automating your way to lean manufacturing
and continuous improvement interesting. Check out Matthews’ full library of free case studies,
whitepapers, FAQ’s presentations and insights.

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 About Us
Matthews Australasia, a family business, is the Australian leader in intelligent
product identification and inspection solutions for the manufacturing industry.
We provide and support coding, labelling, inspection and software solutions
that integrate seamlessly into your manufacturing environment to drive
efficiency, accuracy and cost-effective processes in your supply chain.

Every day, Australian manufacturers use Matthews’ hardware and software

solutions to code products; check product and packaging to eliminate
coding and labelling errors; inspect products; and capture more data on the
factory floor in real-time.

Matthews can help you implement the right hardware and software for your
business goals, whether you need a compliant pallet label or an end-to-end
product traceability solution.

1300 CODING (1300 263 464)

www.matthews.com.au
blog.matthews.com.au

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