KPI Management Software: Manufacturing Key Performance Indicators & Metrics to Track Operational Productivity
Before initiating the project, our customers face business challenges, related to their performing circumstances. Their requests have been raised by some needs that have to be satisfied to improve working realities, increase revenue or mitigate possible risks.
If embarking on KPI management software development, you probably bear in mind the following objectives:
- to track and measure employees key job efficiencies
- to communicate to your employees which business metrics are the most important
- to identify issues individually for each department
- to streamline the reporting process with advanced analytic data available
KPI monitoring tool is an inevitable, vital component for a successful company. However, the solutions presented on the market today may not exactly meet the user’s request, being difficult to modify or requiring huge business process changes to implement.
On the other hand, packaged software takes significantly less time to be implemented than a custom solution. All these contradictions provoke us to provide you with meaningful content to clarify some questions that occur in the process of digital transformation at a manufacturing company. For this purpose, let’s figure out
- what are the manufacturing KPIs?
- what is KPI management software?
- benefits of metric tracking software
- what is a manufacturing KPIs dashboard?
- reasons to implement a manufacturing dashboard
- the best manufacturing KPIs dashboard examples
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What are the manufacturing KPIs?
Operational productivity can be defined through various metrics, depending on unique performance conditions, business goals, and areas of expertise. Some of them are consistent across industries, but today's focus is set on manufacturing.
These manufacturing KPIs & metrics might be used as a framework for a custom-made manufacturing dashboard that shows a real-time visualization of production processes and helps to optimize KPIs monitoring.
That said, we’ve picked up 18 of the most critical key performance indicators for manufacturers to monitor for increasing production efficiency:
- Throughput: Measure the production capabilities of a machine or line over a specific time period
- Production Volume: Overview of what your factories can produce over a certain period of time
- Cycle Time: Analyze the average amount of time needed to manufacture a complete product, including each individual component
- Manufacturing Costs: Calculate the total investment implied associated with the production, including materials, overhead, depreciation, labor, etc.
- Overall Operational Effectiveness (OOE): Maximize your operational efficiency, evaluating the majority of employees’ working hours
- Overall Equipment Effectiveness (OEE): Assess the overall effectiveness of a machine or the entire line
- Total Effective Equipment Performance (TEEP): Unlike OEE, this metric tracks overall effectiveness, meaning 24h/day, 365d/year
- Capacity Utilization: Optimize the use of your capacities, comparing to the total capacity available
- Scrap Rate: Track the number of damaged items that have manufacturing defects and cannot be reworked
- Rate of Customer Returns (Rejects): Calculate how many items are sent back, since they are deemed scrap
- On-time Delivery: Monitor percentage of products delivered on time and maximize the amount to increase customer satisfaction
- Right First Time: Track the number of products manufactured in accordance with specifications to understand the performance of your production process
- Asset Turnover: Compare the value of your revenue to the value of your assets. This metric is mostly associated with financial, not manufacturing performance
- Manufacturing Cost per Unit: Calculate and optimize your total cost associated with manufacturing a product on a per-unit basis
- Return on Assets: Acknowledge how effective your business is comparing to your overall assets and make sure it’s profitable
- Maintenance Costs: Reveal which piece of equipment needs more work than others, where the resources should be focused, and what kind of preventative measures can be implemented to optimize that maintenance in the long run
- Revenue Per Employee: A basic indicator that measures the success of your workforce, evaluating the efficiency and productivity
- Production Downtime: Analyze and optimize the downtime for maintenance, setups, and machine changeover
To skip tab juggling and put all meaningful assets together within one KPI management software your perspective is two-fold: negotiating off-the-shelf solutions or developing a custom-made one, designing its architecture and unique feature-set from scratch. Let’s have a look at its structure and functions in detail.
What is KPI management software?
KPI management software is a tailor-made platform that is focused on KPIs tracking and automates the processes related to key performance indicators management, development, and evaluation. This tool contains and presents KPI data in a user-friendly dashboard, instead of conventional spreadsheets. KPI management software helps businesses create, manage, visualize, and analyze these metrics and acknowledge how they’re performing against targets, strategic goals, or objectives.
As mentioned before, the off-the-shelf solution means that you choose from ready-made options available on the market after leveraging their pros and cons. Your end goal is to figure out the one that fits your requirements and budget, and analyze its ability to satisfy your requests against maintenance costs.
Even though it helps cut the time and rebuild previous operational performance in just a few weeks, off-the-shelf solutions can barely meet your needs precisely.
The second option is to turn to an IT team that develops irreplaceable custom KPI management software from scratch, aligning its architecture and features with your goals to cover those areas of production which need automation.
Merging all manufacturing KPI and metrics in graphical or chart form within one dashboard allows employees to get real-life data visualization, make better decisions based on these key parameters and avoid being overloaded with complex information.
What is a manufacturing dashboard?
The manufacturing dashboard is a multiplex platform that represents the production process and key performance indicators in real-time using graphics or charts within one central point of access.
It indicates performance and organizes data from technical equipment and workers into well-structured, instantly available breakdowns that the whole operation can reference,
measures progression towards primary business goals and fundamental objectives and prevents being overloaded with complex statistics.
Relying on the data, provided by KPI monitoring tools, leaders understand where their teams are in achieving results. With a manufacturing dashboard, you cut time spent on data gathering and analysis, it’s all there for you right when you need it.
Reasons to implement a manufacturing dashboard
- Make complex data simple through visualization
- Define business goals and monitor the progress
- Identify the issues in your business strategy and operational performance
- Streamline data distribution
- Align the efforts of all stakeholders
- Avoid unpredictable expenses provoked by performance issues
Manufacturing dashboard examples for monitoring production volumes
Our hands-off experience includes KPI management platform development. Within the scope of the Poly project, we built a KPI dashboard, as a one-stop solution for production insights necessary to make data-driven decisions and move the business forward more effectively.
Poly detailed statistics show:
- Analysis of the work of technicians and KPIs;
- On-hold task statistics;
- Purchase orders;
- The average duration of work and compliance with deadlines;
- Equipment maintenance;
- Management of the technicians, contractors, and subcontractors;
- Management of the platform users and user roles.
Apart from KPI management software, in the course of digital transformation, you should carefully analyze the needs that should be covered by a custom-built solution and leverage which type of platform can meet them better. Digitalization in manufacturing might be made by means of the following tools:
- Mobile App for Production Tracking, Manufacturing Scheduling, and Productivity Management
For example, the work order management system can automate your manufacturing routine, scale up your business, and minimize the risks of inefficiencies.
In today's Covid-affected production environment, finding ways of adoption to a new normal becomes more difficult and important. If you want to know more, check out our previous blog on Digital Transformation in Manufacturing: How to Boost Efficiency with Work Order Management Software.
Conclusion
KPI management software implementation is firmly established in the manufacturing industry, especially as a result of lockdown realia. Although many companies are still up to handling KPI monitoring manually, metric tracking software is here to stay.
Besides, this fact doesn’t mean you have to jump to integrating a manufacturing dashboard immediately, first select what will add the most value to your business and to employee’s experience, and grow the functionality gradually.
Want to ask a question about upgrading your KPI management app's functionality, or need to develop a new platform from scratch? Feel free to contact Apiko, we are always eager to help.