Production KPIs to support continuous improvement in the factory

Do you know which are the decisive production KPIs for most industrial companies? In this article we highlight some of the indicators most used by companies when assessing the efficiency of their manufacturing processes and implementing continuous improvement actions.

Industrial companies are increasingly aware of the importance of data collection and analysis to drive productivity, efficiency, performance and quality in their factories.

Thanks to the implementation of an MES system, these companies are able to automatically capture real-time data directly from the manufacturing area and centralize all information on a single platform.

From here, and with the help of software such as Mapex, organizations must track certain metrics to detect weaknesses and opportunities for improvement.

Production metrics to be considered

1. Overall Equipment Effectiveness (OEE)

OEE (Overall Equipment Effectiveness) is a standard metric, used by leading manufacturers worldwide, as it provides valuable information to identify efficiency losses and improve production processes.

An OEE score of 100% means that only good parts are produced (quality), at maximum speed (performance) and with no downtime (availability). For more information on the benefits of tracking this KPI and how we can help you calculate it automatically, read this article.

2. Cycle time

Cycle time represents the time required to convert raw materials into finished products. To reduce it, companies must pay attention to this KPI and, for example, detect in which processes they can be even more efficient, identify bottlenecks, eliminate non-value-added tasks, minimize downtime, etc.

3. Total Effective Equipment Performance (TEEP)

Thanks to this indicator you can know if you are making the most of your factory’s production capacity, as well as the resources you have at your disposal to carry out these processes: facilities, machinery, workers, etc. It is important to take this into account and implement strategies to increase it.

4. Changeover time

This KPI determines the time that elapses from the last unit of the outgoing reference to the first OK part of the incoming product. During these minutes or hours, the machine is stopped and it is for this reason that we are facing one of the most relevant metrics for many industrial companies.

In fact, by monitoring and optimizing changeover time (with the application, for example, of the SMED methodology), manufacturers can reduce downtime in the factory and minimize lead times to ensure a good level of service to their customers.

5. Defect rate

Defect rate is key when it comes to evaluating production quality. By monitoring this metric, companies can find out at which moments or parts of the process problems occur and the product no longer complies with current specifications.

Acting on a high percentage of defects translates into cost savings and increased efficiency: reduction of rework, scrap, unnecessary energy consumption, extra personnel costs, etc.

Vector de planta de producción inteligente con KPIs en tiempo real.

6. Production cost per unit

A precise knowledge of this KPI is essential for companies to be able to properly price their products.

This metric considers all costs associated with the manufacture of a reference, both fixed (facilities, labor, etc.) and variable (raw materials, packaging, energy consumption, etc.).

7. Work in Progress (WIP)

WIP is a key performance indicator that measures the value of raw or semi-finished materials involved in the manufacturing process before the finished product is produced.

This sort of inventory is often considered a type of waste, because it equates to tied-up capital that could be generating higher returns elsewhere in the organization.

That is why monitoring and optimizing this KPI can bring certain advantages such as, for example, a reduction in manufacturing cost and time or an increase in available space on the production floor.

8. Downtime rate

One of the most important manufacturing metrics for any industrial company is downtime, as it causes huge revenue losses.

An MES system like Mapex helps you reliably track stoppage rates, especially unscheduled downtime, in real time, so you can analyze its causes and act proactively to reduce it as much as possible.

9. Scrap rate

In this list of production KPIs we have also included the scrap rate: a metric that allows us to know the volume of materials that have been discarded or rejected during the manufacturing process of a product.

Controlling scrap should be one of the first steps to avoid cost overruns in the use of raw materials and energy resources, and to improve the quality of your production.

10. First Time Quality (FTQ)

This metric indicates the number of parts accepted for the first time in a manufacturing process versus the total number of parts produced.

FTQ is a KPI that companies monitor with the aim of achieving zero-defect manufacturing. Although this is a rather ambitious goal, achieving first-time quality translates into a very significant reduction in costs and an improvement in the reputation of companies in the eyes of their customers.

11. Productivity index

Finally, we cannot forget the productivity index. We are talking about a KPI that especially affects those industrial companies in which manual work or processes are performed. It is the most suitable indicator to measure performance when direct labor plays a very important role in the day-to-day running of the factory.

If your goal is to monitor any of these metrics reliably and in real time, do not hesitate to contact our team. They will explain how the Mapex MES platform can help you control your production processes to the millimeter by automatically capturing data and analyzing information in a 100% paperless environment.

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