What is KPI in manufacturing

PRODUCTION KEY FIGURES EXAMPLES

The best production figures & KPIs at a glance

✔ Various templates & designs ✔ Identify and monitor relevant production figures

A Production key figure is a transparent, traceable performance indicator for manufacturers to monitor, analyze and optimize manufacturing and production processes in terms of quantity, quality and various cost aspects.

Here you will find an overview of the most important key figures in production, which are considered in this article:

PRODUCTION VOLUME

Do you monitor your production volume in detail?

Our first production metric is quite obvious for companies in the manufacturing industry: the production volume. Modern KPI software such as datapine helps you to have an overview of all relevant data relating to your production volume at all times. Monitor your production volume and all machines involved in real time, compare the key figure with past production periods, benefit from more effective production planning and control and identify potential deviations from targets at an early stage.

Performance indicators / recommendation for action

The "optimal production volume" utilizes your machines, satisfies demand at all times and at the same time avoids high "overstock".

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PRODUCTION LOSSES

How quickly and effectively do you react to production downtimes?

One of the most relevant production KPIs for success is the number and duration of (unplanned) production downtimes. In corporate practice, this means a demonstrable loss of profit, e.g. B. because a production process cannot be restarted or continued in good time due to wear and tear, incorrect operation or the installation of a defective supplier part in one of your machines. You should therefore reduce unplanned production downtimes to a minimum through regular maintenance and well-trained personnel and, if necessary, protect yourself against certain types of production downtime by taking out product liability insurance.

Performance indicators / recommendation for action

Try to keep your downtime to a minimum. A detailed monitoring will help you to identify weak points and avoid loss of profit.

Relevant showcase dashboard

PRODUCTION COSTS

How high are the costs of the production factors you use?

Our next Manufacturing KPI is production costs. These include all costs that your company expends to purchase the necessary production factors. Usually these costs are divided into fixed and variable costs. In-depth analyzes of production costs are of central importance for every company in the manufacturing industry, as they are crucial for your pricing strategy, among other things. Get a detailed overview of all costs involved in your production process and try to produce your products more cost-effectively in the long term.

Performance indicators / recommendation for action

Monitor and analyze your production costs in detail to identify potential cost savings.

Relevant showcase dashboard

PRODUCTION DEFECTS

What is your defect density?

Permanent production defects, which result in faulty or inferior end products, result in higher production costs and thus negatively on your profit margin. A production key figure that is frequently used in this context is the so-called "defect density", which reflects the percentage of products produced in your overall production that do not meet your quality standards and therefore have defects. Monitor this KPI for all products produced and analyze the causes of high defect rates.

Performance indicators / recommendation for action

Try to keep your defect density as low as possible and compare your values ​​with industry benchmarks.

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RETURN RATE

How many of your produced products are being returned?

The return rate is the quotient of the number of products returned by the total number of products sold. This KPI is also a very important metric in the retail industry. In contrast to the defect density, it also includes subjective reasons for return such as B. displeasing a product. For the production, return reasons are therefore primarily of importance, which can be traced back to poor or inferior product quality. These should then be analyzed in detail and asked why the defects were not recognized during production.

Performance indicators / recommendation for action

Identify reasons for return that can be traced back to defects in the production process and rectify the causes.

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Right first time

What is the proportion of products free of defects in the first quality control run?

The “Right First Time” metric is another production KPI that is important for the management of your quality control. This refers to all products that pass your internal quality control without any defects in the first run. It is therefore a good quality indicator to further increase the proportion of defect-free products in production. High values ​​of this key figure represent an efficient and high quality production process.

Performance indicators / recommendation for action

Set yourself ambitious goals for this KPI, because high values ​​have a positive effect on your production costs.

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CAPITAL TURNOVER

What is your ratio of sales to total capital?

The capital turnover is an important financial figure in the manufacturing industry, which reflects the ratio of your sales to your total capital. This key figure shows how many monetary units of sales are generated with one monetary unit of total capital. The capital turnover differs from the return on assets in that it takes into account sales and not net profit in the calculation. Especially in the production industry with comparatively high assets (machines, devices, etc.), a high turnover of capital is a key success factor.

Performance indicators / recommendation for action

The higher your capital turnover, the better. This means that you are generating more revenue in relation to your assets.

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TOTAL RETURN ON CAPITAL

How efficiently do you use your capital?

Similar to capital turnover, the return on investment measures how efficiently you use your assets to generate financial value. To calculate your return on total capital, divide your net income by the total capital employed. Accordingly, a high ROI signals that a company is making efficient use of its assets to generate profit. It is an important performance indicator, especially in the manufacturing industry, because it takes into account both the income statement and all assets, which are particularly high in manufacturing companies.

Performance indicators / recommendation for action

The higher your total return on investment compared to the industry average, the better.

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MAINTENANCE COSTS

Do you always have an eye on your maintenance and servicing costs?

Maintenance and servicing costs include all costs that ensure the functional condition of your production machines or restore them in the event of failure. The German DIN standard DIN 31051 divides the maintenance costs into 4 areas: maintenance, inspection, repair and improvement. With datapine you can monitor your maintenance measures and the associated costs in detail in order to avoid system failures and the associated negative effects. Further advantages are the improvement of the operational safety, the increase of the system availability by the reduction of disturbances as well as a forward-looking planning of all incurred costs.

Performance indicators / recommendation for action

Try to reduce your maintenance costs in the long term, but don't save in the wrong places and risk system failures.

Relevant showcase dashboard


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