Key Non-Financial KPIs for Production Efficiency

There are many non-financial Key Performance Indicators (KPIs) that may be relevant to your business, below we have included some of the KPIs that are commonly used to track and monitor and control Production Efficiency.

As with all KPIs and goals in general, ‘less is more’, so ideally you will select the handful of KPIs that are of greatest importance to the business to track and report on at top level management.  The further down the organisation you go, some of the more granular KPIs are likely to be ideally for middle or junior level management and of course for staff on the ‘shop floor’.

The list below is not intended to be comprehensive; this is provided purely to help with the process of selecting those KPIs that are most relevant to your unique circumstances.

Overall Equipment Effectiveness

Definition: A measure of how effectively equipment is being used, calculated as the product of availability, performance, and quality rates.

Importance: Higher OEE indicates optimal use of equipment, reducing downtime and increasing productivity.

Cycle Time

Definition: The total time required to complete one production cycle, from start to finish.

  Importance: Shorter cycle times indicate more efficient production processes and higher throughput.

First Pass Yield

Definition: The percentage of products manufactured correctly without any rework on the first attempt.

Importance: High FPY reflects efficient production processes and higher quality output.

Downtime

Definition: The total amount of time equipment is not operational due to maintenance or unexpected issues.

Importance: Minimizing downtime is crucial for maintaining continuous production and meeting output targets.

Production Schedule Adherence

Definition: The percentage of production completed on schedule.

Importance: High adherence rates indicate effective planning and execution of production schedules.

Defect Rate

Definition: The number of defective products produced as a percentage of total output.

Importance: Lower defect rates signify higher quality production and reduced costs associated with rework and scrap.

Capacity Utilisation

Definition: The extent to which the manufacturing capacity is being utilized.

Importance: High-capacity utilization indicates efficient use of resources and facilities.

Energy Efficiency

Definition: The amount of energy used per unit of production.

Importance: Higher energy efficiency reduces operational costs and environmental impact.

Inventory Turnover

Definition: The number of times inventory is sold and replaced over a specific period.

Importance: High inventory turnover indicates effective inventory management and production planning.

Lead Time

Definition: The total time from order placement to delivery of finished goods.

Importance: Shorter lead times enhance responsiveness to customer demand and improve overall efficiency.