Overall Equipment Effectiveness (OEE) – Efficiency of manufacturing equipment in terms of availability, performance, and quality. A good OEE would be in the range of 85% to 90%.
Production Yield – The percentage of high quality products produced compared to the sum total of all products products. Indicator of quality. A high production yield would be in the range of 95% or above.
Cycle Time – The time to complete one cycle in the manufacturing process. Helps to identify areas of potential efficiency improvement.
Downtime – The amount of time production needs to be halted from equipment breakdown or maintenance. Manufacturing benchmarks for tolerable downtime range from 5% to 15%
Lead Time – The time it takes to fulfill a customer order from initial request through to delivery. Gives insight into both production and delivery efficiency. If leveraging just-in-time manufacturing, the goal may be very short lead times.
Inventory Turnover – How quickly inventory is sold or used in the production process. Good indicator of the efficiency of inventory management. You want to aim for a higher inventory turnover. Benchmark values can range from 4 to 8, depending on the industry and product lifecycle.
Scrap and Rework Rates – The percentage of products that are discarded as scrap or require rework due to defects. Good scrap rates will be below 1%, with rework rates in the 2-3% range.
Employee Productivity – Measures the output per employee, helping assess workforce efficiency.
On-Time Delivery – The percentage of orders delivered on time, indicating the manufacturing organization’s ability to meet customer expectations.
Customer Satisfaction – Through the use of customer satisfaction surveys, feedback, and other metrics ensure that products meet customer expectations. Target scores ideally should be in the 80% to 90% range.
Cost of Goods Sold (COGS) – The direct costs associated with producing goods, helping in cost management and pricing strategies. Cost will depend on industry, how complex the manufacturing process is, and market conditions like supply and demand. For benchmarking, you’ll want to compare against other similar manufacturers.
Energy Consumption – The energy consumption of manufacturing processes. Measuring energy consumption helps an organization identify opportunities for efficiency improvements and cost savings.
First Pass Yield – The percentage of products that pass quality control on the first attempt without rework. A good target range for first pass yield would be in the 90% to 95% range typically.
Return on Investment (ROI): The financial return on investments made in equipment, technology, or process improvement. ROI = (Net Gain or Loss Divided by the Cost of Investment) x 100.
Cost of Investment: This represents the total cost associated with the investment, including initial purchase costs, operating expenses, and any other costs related to the investment.
Safety Incident Rate -The number of safety incidents and accidents occurring in the workplace. Total Recordable Incident Rates (TRIR) are used commonly to benchmark safety performance. Manufacturers should strive for zero safety incidents.
Supplier Performance – Assesses the performance of suppliers in terms of quality, delivery, and reliability.
Capacity Utilization – The percentage of a manufacturing facility’s total production capacity being utilized.
Waste Reduction – The reduction of waste in the manufacturing process, contributing to cost savings and sustainability goals.
Maintenance Costs – Costs associated with equipment maintenance. It’s crucially important to manage these budgets effectively in a manufacturing organization.
Cash-to-Cash Cycle Time – The time to convert investments in raw materials into cash via sales to customers.
