Manufacturing Metrics that Really Matter

According to new research conducted by MESA International, manufacturers across industries are reaching new levels of excellence, pushed forward by the dynamics of a shifting business landscape. Manufacturing organizations are achieving this elevated performance through continuous improvement directives and programs that require the synergy between people, processes, and supporting technology resources.

The focus of this research is to understand the business impacts of metric programs and that are being used across a wide range of manufacturing industries. With the breadth and span of available metrics, it is important that organizations choose the right metric approaches that align to business and manufacturing processes to diver optimized improvement efforts.

In this report, the following questions were answered: 

  • Which metrics are being used to best understand manufacturing performance and opportunity areas for improvement?
  • How does my company’s performance improvement compare to industry?
  • How do we connect operational metrics to financial metrics?
  • How can technology help support and impact metrics programs and performance? 

All respondents were asked about specific performance levels of three critical metrics:

  • On-Time Completed Shipments (OTCS)
  • Overall Equipment Effectiveness (OEE)
  • Successful New Product Introductions (NPI)

Key Relationships Between Operational and Financial Metrics

Many positive correlations were found between average annual metric improvements and average annual financial metrics. The 2014 survey revealed the following key observations:

  • The average percent successful NPIs was 72%, with the top 7% of performers achieving 90% or better.
  • The average OEE was 71, with the top 11% performers achieving 80 or better.
  • The top performers in NPI had average annual financial improvements of 16% versus 8.6% for all others.
  • Those with OEE of 80 or better had average annual financial improvements of 14% versus 8.6% for all others.

Respondents with NPIs of 90% or better reported average annual financial improvements of 16%. These respondents also had 32% annual improvements in customer fill-rate/on-time delivery shipments/perfect order versus an average of 12.5% overall.

Research shows that companies are achieving elevated performance through following effective continuous improvement programs. This requires the collaborative support of people, processes, and technologies, but in order to focus on the correct areas, companies also need to ensure that the most impactful metrics are used within these programs.

For more report information, visit the MESA International website.   Looking for a list of effective manufacturing and service process metrics? Contact us and we will email list to you.   

 

One Response to “Manufacturing Metrics that Really Matter”

  1. Peter says:

    It’s great to see companies improving and getting more efficient, especially with the use of continuous improvement techniques like Lean and Six Sigma.

    I think correlating Operational Metrics and Financial metrics is an interesting challenge that many companies get wrong. Management might be focused on key financial goals in their quarterly reviews, but these metrics aren’t always carried down to the shop floor. What metrics does the factory worker need to work toward daily to achieve the long term goal? Alignment of measurement systems with financial metrics is key!

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