The KPIs you should track for company success

Unleashed Software explains how reporting KPIs can help with making smart, informed decisions for manufacturers.

Understanding the trends and data points that occur in the manufacturing process can lead to gains in efficiencies, supplier products, customer satisfaction, and business profitability. Breaking these aims down into measurable, numerical values is part of defining the key performance indicators (KPIs) that can lead your company to success.

Business activities, inputs and outcomes all generate data. When left unchecked, this can result in an overload of data, but by analysing specifically chosen data, businesses can glean insights that will lead to better decision-making. With the data to support a decision, changes to a business’s operating practices can be based on facts and their outcomes can be reliably measured.

By measuring and tracking production processes, analysts can spot long-term trends and developments that have occurred in the history of the company and be better prepared to deal with changes as they emerge in the future.

Before rushing off to buy a range of sensors and modules, however, understanding how these metrics fit into your business’s broader goal will make the data- gathering exercise all the more productive. Whether that is to minimise production costs, increase the quality of the product, or just become more efficient overall, defining your aims ensures data is put to good use. These broader goals must be specific, measurable, actionable, realistic and time-based. This is so that the metrics can drive the analysis of the goal, rather than the other way around. In addition, while an overall goal of a business may be set, breaking the goal down into constituent parts that can be fulfilled by each individual or team within the organisation contributes to the cohesive and streamlined fulfilment of the targeted achievements.

With this in mind, you can set KPIs at all levels of a manufacturing business. The first area in which defining metrics can lead to gains for the business is during the production process. Here, the primary goal will tend to be improving efficiency.

During the production process, time can be a valuable indicator of the efficacy of the overall process. Measuring cycle time or time to make changeovers can point towards areas where you may be able to achieve productivity gains.

A capacity or cost metric can also lead to insights into the production process. This can be measured by overall production efficiency, broken down into capacity utilisation, the cost of energy required per product, or overall equipment effectiveness, measured by whether the equipment is reaching its potential capacity.

The next KPI for production is in the area of safety. This can be measured by the number of health and safety incidents over a period of time, noncompliance events in a set time, or the ratio of planned-to- emergency maintenance that has needed to be carried out.

Having an understanding of a quantifiable value on each of these areas within a production process allows for the business to define the metric that will inform overall KPIs.

The second area within a manufacturing business that should be measured is supplier input. This can be measured in terms of lead time, overdue orders, or the qualitative or quantitative inspection of supplied products. These metrics can be used to inform an analysis of the quality or comparative quality of a supplier.

The next area for metrics that go towards company KPIs is in the field of the customer. Meeting KPIs for customers, whether agreed between your business and the customer or self-determined, can ensure ongoing customer loyalty and satisfaction. This can be quantified in the percentage of products delivered in full and on time, or the customer return rate.

Finally, measuring overall KPIs for a manufacturing business ensures that you have an understanding of the general health of the business. Here there are many metrics that is useful and understandable. Inventory management software, such as Unleashed Software,
can track the metrics and then generate reports based on the data. These reports provide a way for manufacturers to visualise the data they have collected while informing the decisions that they may make to grow the business.

The business intelligence to choose from, ranging from profit, revenue, and cost, to sales volume, and margins. The internal productivity of workers across the company can also be measured, as can the productivity or return on physical assets owned by the company. Other monetary areas include interest, tax, depreciation, and amortisation.

With a myriad of potential data points and metrics, you need to a solution that measures and processes data points into something reporting functionality that Unleashed offers is one part of their complete solution that can be managed from the cloud. Information is then collated on products and stock in the one system. When stock levels are updated, the changes are reflected across the entire enterprise.

With intelligent reporting based on quality data, you can ensure that products are of consistently high quality while keeping costs to a minimum.