Manufacturing KPIs_ What Makes a Good Metric

The Manufacturing Data You Should Track & What to Actually Do With It

A manufacturing plant is one of the most dynamic and complex business environments you’ll find. Amper has worked with hundreds of operational leaders across scores of factories, and we have found that utilization and downtime are powerful manufacturing metrics that help company leaders control their operations and work toward running lean. 

It’s simple, as the cohosts of The MakingChips Podcast put it, “If you're not making chips, you're not making money!”

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As with the Toyota Production System, we want to maximize value added time for customers. Here is a case for regularly and accurately measuring production time of your machines as a KPI:

  • Production time is value-added time. Customers pay you for making precision parts and for the time the machines are running. Time spent setting up the machines, sitting idle, etc. is not value-added time for your customers. This is a critical path where you can set productivity targets.lean manufacturing metrics

  • Utilization is a dynamic metric that you can influence and so is a valuable manufacturing metric because you can see the impact of your actions. It changes by shift, by day, by week. This allows you to have a quick learning cycle on what's impacting it and how to run leaner.

  • Measurement of root causes is simple since the inverse of utilization is downtime which can be assigned standard downtime codes. This allows you to obtain insights into why you're not meeting your utilization targets and based on pareto charts, you can focus on the top reasons.

Using Amper's automated utilization tracking system, you can track these key manufacturing metrics in a sustainable and scalable way. We allow manufacturers to track any kind of machine without the need for integration. 

What to do with your manufacturing metrics?

Once you start tracking your manufacturing KPIs, there are a number of ways to use them:

  • Measure planned activity vs actual performance: Just how good is your ability to plan? Using a disciplined way of tracking your progress against your plan is an honest way to assess—and sharpen--your planning skills.manufacturing metrics

*Here is an example of a staggered chart from High Output Management. 

With Amper, you can review executive level metrics against your goals to help understand the quality of your goal planning.

amper manufacturing metrics

  • Analyze underlying root causes: Using root cause analysis tools, you can create initiatives for solving the underlying root causes of your downtime. We recommend the A3 methodology for identifying and tracking the progress of projects. 
  • Identify your initiatives: by analyzing the 80/20% of problems slowing daily productivity, you can target the areas that need improvement.
  • Measure the progress and impact of initiatives: Using the above KPIs, you can measure the ultimate impact of your activities. What you want to end up with at the end of the year is a list/table of projects you worked on and a clear quantified impact.

  • Set up individual manufacturing metrics for performance: You can set up goals for each factory worker to be reported on a daily basis, so you encourage their peak performance. (According to Harvard’s theory of the Hawthorne Effect, workers change their behavior simply when they know they are observed.) 

How do you obtain your manufacturing KPIs?

Amper’s non-invasive tracking system makes it easy. And once you have your executive-level manufacturing metrics, you can measure them against your goals to help understand the quality of your goal planning. 

In summary, simply by tracking your key manufacturing metrics, you’ll be on your way to running lean. To see how it works, request a demo.