How to Implement Daily KPI Management in Manufacturing
Setting and tracking key performance indicators (KPIs) is essential for the success of any manufacturing operation. However, this isn’t a simple matter of collecting and reviewing data to adjust for long-term trends. To implement KPIs effectively, managers need to understand that they are also a tool for improving and optimizing day-to-day operations.
Choosing the right KPIs to implement will be a critical factor for manufacturing operations. Most managers are likely already aware that they need to set SMART KPIs, goals that are Specific, Measurable, Attainable, Relevant, and Time-bound. For the best results, managers have to take this process further and ensure that KPIs are implemented towards continuous improvement.
The KPIs That Define Day-to-Day Operations
For KPIs to make a genuine impact on production, they can’t be relegated to quarterly, monthly, or even weekly review meetings. Instead, they should be used as a driving factor in daily standups and shift changeover meetings. Not every KPI is suited to management at this level of detail, but smaller and more immediate KPIs ultimately contribute to long-term trends in major KPIs.
Every manufacturing environment will have distinct KPIs and targets, but most will fall into one of several broad categories. Manufacturers can benefit from having all stakeholders aware of these KPIs during day-to-day operations.
Overall Equipment Effectiveness (OEE)
Overall equipment effectiveness is a composite KPI that combines multiple aspects of manufacturing effectiveness into a single score. It’s calculated from:
- Availability – The percentage of scheduled time that an operation or process actually runs
- Performance – The percentage of the design speed our output that a process runs at
- Quality – The percentage of good units out of total units produced (first pass yield)
Each of these is a useful indicator in itself, and OEE as a combined score provides an overview of operations. It can be applied across any time frame and can be used to compare shifts against other individual shifts or general trends. While this is a useful KPI, it is far from the only factor to consider.
Cycle Time Efficiency
Cycle time is a widely used KPI in many industries and in most manufacturing environments. It’s the total time that it takes to produce a unit from raw material to the finished product. Any process will have some ideal cycle time where every machine is operating perfectly. The cycle time efficiency compares actual cycle time with this ideal value.
A process running at low cycle time efficiency isn’t producing as many units as it could be. In made-to-order operations, it can lead to serious issues with customer retention. In most cases, low cycle time efficiency will be due to bottlenecking at some point in the process. By making shifts aware of this KPI right away, these bottlenecks can be addressed quickly to restore production capacity.
Scrap
For manufacturers, scrap can be one of the most significant KPIs to watch closely. A process that’s producing significant scrap through damaged materials and units can incur costs for operations through:
- Materials
- Rework
- Waste disposal
- Quality assurance requirements
The method of tracking scrap will vary between specific manufacturing processes. In most cases, scrap will be reported as either number of units lost or material lost by weight. These aren’t metrics that can be left for review at a later date. Costs will quickly add up, and any increase in scrap production needs to be addressed in real-time.
Implementing Daily KPI Management
No matter which KPIs you determine to be of immediate consequence for your operations, the key to successfully implementing them is making effective use of the data they provide. This will require making use of them not only at high-level review meetings but in the daily operation of the manufacturing floor.
However your organization handles your daily standups or shift changeover meetings, there should be a focus on actionable KPIs. By reviewing OEE and other KPIs, you highlight key issues for the shift and enable stakeholders at every level to take appropriate action. Operators, technicians, maintenance, and managers alike can do their jobs better with access to this relevant, real-time information.
KPIs for the previous shift, day, or week should be compared to both recent performance and general trends. Being able to identify when issues have appeared suddenly versus when they are part of a long-term decline can provide important insights into where the cause of the problem lies and what course of action needs to be taken.
Collaboration also plays an important role in making effective use of KPIs. Making this important information available to all stakeholders through the use of shift changeover meetings allows individuals from different departments and with different expertise to weigh in and work together towards a solution.
Daily KPI management contributes not only to the technical operation of the manufacturing process but the personal side as well. Increased awareness of current KPIs, trends, and benchmarks will lead to stakeholders at every level becoming more committed to maintaining operational excellence.
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How Matics Makes Daily KPI Management Possible
Of course, implementing daily KPI management in this manner is only possible if your organization has access to reliable, relevant, and real-time data. Matics provides a solution that does just that, aggregating data from your MES and ERP systems, machines, and human experts and making it easy to access, review, and compare in the format you need.
The Matics dashboard provides comprehensive shift overviews featuring a wide variety of KPIs. These can be readily reviewed for past shifts, along with a real-time overview of the current shift. This gives your organization the information it needs to implement effective daily KPI management at every level.
The dashboard includes intuitive tools for setting targets and comparing historical or current KPIs against those targets or maximum production parameters. With real-time data, problems with production can be detected and identified quickly rather than after the fact.
Matics provides an experience that is highly customizable. You can adjust the dashboard to provide the specific KPIs and other information that is most relevant to your individual process. In doing so, you can ensure that managers, technicians, maintenance, and operators all have precisely the information that they need to best handle day-to-day operations.
Real-time Operational Intelligence With Matics
Daily KPI management is just one of the many advantages that come with the Matics solution. Our solution fully integrates with your existing systems to aggregate data and provide real-time operational intelligence. It goes beyond simply presenting information in an intuitive format and can provide real-time alerts with contextualized data to the correct stakeholders, allowing them to take informed action sooner.
You can contact us to book a demo today and see how Matics can improve your operations.
