There could be many indicators. For example, efficiency of the system, minimum waste, utilization of the system.

I agree with Shah. I would add percentage of rejects from manufacturing, trends in results from quality control, percentage of compliance with programs, inventories level,storage costs, etc 

 Dear Cioccio,

To the best of my knowledge, maximum service level as well as efficiency of the system, minimum waste, are the most important issue that are needed to be considered.

First and foremost, check whether they have a proven international quality management standard certification such as ISO 9001:2015 and their top management fully support their quality management system. Without a proven quality management system any key indicator they present would be unreliable. Efficiency, % rejects,  waste, worker productivity, etc are all relative depending on the industry type. 

I agree with Burhan Sabini. Moreover, I suggest you to check the ISO TS 16949 and ISO TS 176, maybe it can give you a glimpse of the different indicators of performance (& quality) used in the automotive industry.

I have used time cycling by product, others process efficiency  ratio, but also it is very important  quality of service indicators 

Hello,

we are using OEE concept with three indicators: RFT - how many outputs are OK for the first time (without retesting or reworking),Utilization of the machine - productive time versus downtime (maintenance, not producing). And performance factor (planned performance for one output and the real output considering available time - coming from utilization).

With this, we checking our key indicators as minimum waste level, maintenance cost and spare parts stock value, etc.

I have always focused on Compliance as a core indicator.  By this I mean the ability of the planner receiving the actions from the system to comply to them without change. If the planner is not able to do this it an indicator of a problem.  Parameters, BOM, Forecast etc. I hsve used as an analysis tool for over 3 decades.

I have just finished supervising a project that has focused on BOM. Which has underlined just how core the BOM is the the effectiveness of manufacturing systems. 

All above mentioned are key indicators that could head on responding your question. However, I miss one that summarises all of them: customer satisfaction level. As per as Quality means to comply with contract specifications (including cost and delivery), at the end the Customer is the King for final exam. No matter getting very few rejects, for instance, if the Customer is unsatisfied, sooner or later it would be on trouble, so, key performance indicators have to be fully aligned with Customer expectations. Regards, Luis

Manufacturing Industry has many performance parameters. These are may be from material, finance, employee satisfaction, technology employed etc...etc..etc......

But if you will restrict to only manufacturing performance then capacity (man / machine) utilization, % of rework, % of rejection, type of idler hour & its %, cycle time of each component / project really matters.

Stability in the throughput. Like an engine if the RPM is stable it means inputs and outputs are stable then you can crank it up. I would also add IQC non-conformity rate which will contaminate the engine if too high. But nothing can stand if you dont have a great product designed for manufacturing. 

Despite the many existing standards and regulations,

there is no general agreement on how to tell if a production system is effective or not?

Despite the many existing standards and regulations,

there is no general agreement on how to tell if a production system is effective or not?

First of all, we need to understand what problem (need) provides this production system.

Then determine the serialization of products (single pieces, small series, large series).

Next, you need to assess the necessity of the production system. Then we can define the different indicators: productivity, labor input, load jobs, output per employee, etc.

But the main issue is to meet the needs of production.

Dear Di Ciccio,

there are many different indicators, related to productivity, efficiency and utilization. To have a syntesys I would suggest to approach the OEE (Overal Equipment Effectiveness) you can find on Nakajima book on TPM.

Obviously it depend on the manufacturing system investigate. Single machine, parallel system, etc. I'm attachinf  a couple of papers on this topic.

Best Regards

Alberto

The core indicators that give a realistic view of performance in manufacturing systems are  throughput, product defectiveness, product quality, material flow smoothness, due date attainment, output variability and flexibility. Metrics such as market share, sales increase, margins and customer satisfaction surveys help firms to individuate their market position and to plan for their future. Moreover the selection of indicators depends upon the nature and type of manufacturing system.

The selection of key figures depends to a great extent on the cost structure and other operational requirements. Generally, key figures are required with regard to machines, employees and products.

- Machines: OEE (especially for capital-intensive production / high depreciation)

- Employees: labor productivity (especially in the case of high labor costs eg in manual assembly); Fluctuation rate; Number of accidents

- Products: Lead time; Delivery reliability; Complaint rate; Error rate

Sustainable manufacturing systems' metrics must include process/product (Product Value Stream) and human development (People Value Stream) goals.

One of the best explanation for both dimensions can be found in "Toyota Culture, the Heart and Soul of the Toyota Way,"  by J. Liker and M Hoseus. 

The importance is the existence of flow. Manufacturing processes should simulate a line assembly process as best as possible, whether it is in the shipbuilding or the semiconductor industry.  It is important to define all of the assembly processes. Then each workstation of each process needs to be identified. Then it is important to see if there is a balanced takt time. If the lean priniciples of constant flow,  just in time and built in quality  are respected then the manufacturing system is performing well. In case there are any bottlenecks, waiting, excessive movements or any other wastes which impede flow, then the system is not performing well. It is necessary to map the entire system which will readily enable the identification of wastes and unbalanced flow. Then a new value stream map with the critical issues rectified can be drawn and implemented. Finally kaizen will force any manufacturing system to constantly map and be aware of any changes which can further improve the competitiveness of the manufacturing system.

There would be a lot of inconsistencies as regards this question. You need to define what type of manufacturing system you are dealing with. You need to identify what the objectives of the organization is. Meanwhile, there are 4 dimensions of metrics for a manufacturing system- cost, time, quality and flexibility. There are generic metrics for each one while some may be formulated for specific systems. A holistic metric is one where you combine all relevant metrics to give you a realistic overview, and many tools have been advanced for this purpose such as Data Envelopment Analysis, Fuzzy Logic and AHP.

In summary, no single indicator is sufficient enough to give a realistic view. You need  define them for purpose and combine them into a holistic metric.