Your question can probably not be answered in general as manufacturing systems are too different. When you look at the manufacturing of cardiac catheters it is obvious that cost is secondary when you don´t manage to get quality right. So stability of process and absence of faulty products are the dominant factors. In automotive industry you very often find the combination of forming presses (extremely short cycle time, very long set-up times) and following welding procedures (long cycle time, no or little set-up times). So in these cases lot sizing and stock (cost) as well as set-up times are relevant criteria. Faulty products are easy to detect and can be discarded without mayor consequences. And there are many more examples.

For your cases it seems to make sense to define a manufacturing process or a category of processes you refer to.

Diogo:

The three main metrics that you have suggested are not completely independent. However they do provide a complete description of a manufacturing process. However the models that you will be using for each one of these metrics is more important. One suggestion that I would like to add to you is include sustainability also as one of the requirements. Your metrics will remain the same but the models that you would be using will include sustainability factors into them be the process efficiency or cost.

For example a cost model could include the material cost, tooling cost, labor cost, overhead cost, and waste disposal cost.

A few publications that would help you in this aspect are given below:

Reich-Weiser, C., Vijayaraghavan, A., & Dornfeld, D. A. (2008, January). Metrics for sustainable manufacturing. In ASME 2008 International Manufacturing Science and Engineering Conference collocated with the 3rd JSME/ASME International Conference on Materials and Processing (pp. 327-335). American Society of Mechanical Engineers.

Feng, S. C., Joung, C., & Li, G. (2010). Development overview of sustainable manufacturing metrics. In Proceedings of the 17th CIRP international conference on life cycle engineering (pp. 6-12).

Jayal, A. D., Badurdeen, F., Dillon Jr, O. W., & Jawahir, I. S. (2010). Sustainable manufacturing: Modeling and optimization challenges at the product, process and system levels. CIRP Journal of Manufacturing Science and Technology, 2(3), 144-152.

Let me know if you need any further assistance.

From a business perspective (and without examining the complete list of metrics and accepting your 3 metric categories at face value), it appears that the Cost metrics are paramount. It also appears that this category would subsume the other two ... i.e., Process Efficiency and Cycle Time both impact Cost. Now, if one takes Time to be one of the Inputs to (i.e., Resources used by) a Process (in generating Outputs), then Cycle Time should be part of the Process Efficiency measure (Output/Input?). In sum, I think Cost subsumes Efficiency which, in turn subsumes, Cycle Time. So, focusing on Cost metrics seems to be the way to go. Alternately, why not do separate multi-criteria analysis using criteria drawn from each of the categories? They should offer different kinds of insights.

Thank you very much Mr. Nageswara Posinasetti!

Thank you Mr. Ram Pakth!

Welcome Diogo. Pl address me as Ram. And, I see that Nageswara has also referenced a paper by a couple of my colleagues ... Fazleena Badurdeen and Ibrahim Jawahir (aka Jawa) here at UK. They are in Engineering and I'm in the Business School. Small world.

Dear Ram,

In view of making clear my approach, bellow I detail how I'm calculating these three factors:

- Cycle time = is the total time from the beginning to the end of my process (in seconds). After that I divide these local cycle time per the total cycle time to manufacture one product. Thus, my final result is a relative cycle time (%);

- Process efficiency = Outputs/Inputs (in %) as you mentioned before. However, I'm only considering the amount of raw material consumed (input) and the amount of material converted to products (output). Time is not involved here;

- Cost = total cost from the beginning to the end of my process (in R$ - Brazilian money). After that, I divide these local cost per the total cost to manufacture one product. Thus, my final result is a relative cost (%). Again, time is not involved here.

So, all the three factors are expressed in % before starting the multi-criteria analysis.

I see. I misunderstood your original question -- I understood that you had aggregated a set of several measures into 3 categories (Process Efficiency-related Measures, Cycle Time-related Measures, and Cost-related Measures). This lead me (like Nageswara) to assume that these were not mutually exclusive. I now see that you only have 3 metrics and that you are trying to set them up to be independent of one another. I do not know what cost components are factored into Total Cost -- if it includes Labor, for example, would Labor Cost not be computed as a function of Labor Time? So also for any machining involved. Thus it appears that Cost and Time are related. Similarly, Cost could include Material cost in which case Cost and your Process Efficiency metric are also related. It may be worthwhile breaking down these three metrics into their component metrics (references provided by Nageswara may help here) and then examining which component metrics may be fruitfully considered in a multi-criteria formulation. I also have some difficulty understanding the phrasing "divide these local cost per the total cost to mnfr one product" and divide these local cycle time per the total cycle time to manufacture one product.." Perhaps showing this in equation form with assumed numerical values will help rather than the English sentences.

Hi to all,

Yes profesor Ram, I'm trying to define independent variables to include into the multi-criteria analysis.

I think is not necessary to obtain relative indicators to the "cycle time" and "cost" criteria as previously I was thinking.

So, bellow follows the three criteria calculation process as you asked me:

Considering the processing of one product, we have:

- Cycle time = is the total time from the beginning to the end of processing, in seconds;

- Process efficiency = Total outputs (product and emissions) / Total inputs (semi-products, consunmption of material and energy resources), in %;

- Cost = total costs due to the resources consumption, in $.

Dear Diogo,

I think your choice of metrics would depend on the purpose of measuring. Are you interested in monitoring the drift or improvement of a particular process over time and want to catch all potential types of improvements or performance deteriorations. Or are you interested in comparing the performance of very different processes in which case you would look for generic process measures that allows you to state something about the efficiency or improvement potential of each process. As for the latter, I would suggest using scaled measures of an intangible nature rather than cost measures that are very process specific. Scaled measures of first order intangibles include OEE (of equipment rather than process), cycletime over leadtime, process time at bottleneck station multiplied by average process throughput rate, scrap/reject/rework rates.

Insightful observations, Rikke!

Diogo: It appears that your re-defined process and cost measures are as yet related (via resources). Rikke's observations on whether you seek to do a cross-sectional analysis across different processes or a time series analysis of a single process is worth considering.

Hi,

Let me provide a little different perspective. I am a Theory of Constraints advocate and hence take a more holistic view of systems. Your measures of manufacturing processes are cost focused and say nothing of actually selling the product. Many manufacturing facilities have saved their way to bankruptcy by making large batches to save on setups, buying cheap materials to save on materials costs, used cheap labor to reduce cost per part, etc. Unless a product can actually be sold the company doesn't REALLY make profit (even though their profit and loss statement shows profitability stored in inventory on the balance sheet). In TOC terminology, there are several factors to consider (where is the constraint, for example: internal or market, scrap units before or after the constraint, etc.). Three measures are critical: throughput (T), inventory (OR investment) (I) and Operating Expenses (OE). Below are definitions provided by the TOCICO Dictionary 2nd Edition.

Throughput … In the case of throughput per time period, throughput is calculated as (revenues received for the period minus totally variable costs) divided by the chosen time period. In the case of throughput per unit of product, throughput is calculated as the selling price of the product minus totally variable costs per unit.

Investment (I) (formally inventory, when viewing a line perhaps) – All the money currently tied up in the system. As used in TOC, investment refers to the equipment, fixtures, buildings, etc. that the system owns as well as inventory in the forms of raw materials, work-in-process and finished goods.

Operating expense – operating expense (OE) – All the money the organization spends in generating "goal units".

Perspective: In the throughput-world paradigm of TOC, operating expenses include items such as salaries, rent, insurance, and other expenses that would be paid even if operations stopped for a while. OE does not include expenses that vary directly with production or service volume, such as cost of raw material, commissions, etc. These expenses are considered to be totally variable costs, not OE.

One can get a good estimate of profit from: net profit = throughput minus operating expense.

Return on investment = net profit / investment

Productivity = T / OE

You might read Chapter 4 of The Goal written by Goldratt to gain a better understanding of the impact of traditional cost accounting and measures on a manufacturing organization.

Debra and Chad Smith have an excellent book Demand-driven performance using smart metrics (McGraw Hill) that provides metrics that span from the manufacturing line backwards to raw materials vendors and across the supply chain recognizing the impact resource dependencies and statistical fluctuations.

Recognize that line efficiency for example is a traditional measure of manufacturing performance. The closer to 100 percent line efficiency (a zero balance delay is perfect) the better!!! But recognize that when dependent resources and statistical fluctuation (Murphy) exist, which is in every reality, one would get high WIP, long lead times, etc. There is a need for protective capacity and protective inventory in every line so that the system operates effectively (short lead times, excellent due date performance, etc.). There are a number of simple dice games that illustrate the problems of traditional measures. You can also check out the following website:

http://www.tocico.org/

TOCICO is theory of constraints international certification organization, a non-profit certifying expertise in TOC. Check under what is TOC to see Goldratt's description of "What is TOC?" Then you might check out the success stories tab and the thirteen portals listed on various TOC topics. Usually there is a 1 to 1.5 hour basics workshop on that topic then a half dozen case studies of the top companies such as Delta Airlines, Boeing, US Marine Depot, Tata Steel, Toyota, hospitals, state governments, etc. results in manufacturing, supply chain, projects, measures, etc.

If you are new to TOC and its use in manufacturing Eli Goldratt's The Goal (one of the top 10 business best sellers of all time) is a great starter to learn some of the basics of how to plan schedule and control lines and appropriate measures.

Hope this is helpful.

Jim Cox

Professor emeritus

Google/search "Process Capability Index" (CpK); you might find it interesting for your model as it includes sound statistical considerations.

I really think that others metrics or factors have to be considered in evaluating any process: responsiveness, flexibility (at different levels) are examples of such factors if we plan to understand and evaluate a process under a strategic perspective.

Hi, Diogo,

Since my particular point of view Efficiency process and Productivity = Outputs/Inputs, are measures which will give you a quick view of your manufacturing process. Then you can detect if you have to put some actions to inmediately improve it, or may be your process is not so bad.

It means you can take decisions about it. Obviously as soon yo improve it, you will have benefits$$.

I hope be helpful.

Regards.

Norma López

High Diogo,

manufacturing metrics? the most important?

Answer is straightforward: ... depends only on customers demand D, D \in real-number ! Some like sportscar, others want economic cars and others prefer comfortable vehicles.

As conclusion: list all parameters P_i, i \in {1,2, ...,n) you know (look for additional ones) and think resp. model the processes behind, which make calculable all criteria C_i (cost, quality) you have in mind. Calculate the multi-dimensional map C_i=C_i(P_i) and combine the result of the C_i to come out with the maximum value for the customers demand D=Max_{P_i} \Sum_{i=1}^{i=n} w_i*C_i(P_i), where the set w_i is the weight any criteria gets depending on customers preference (sports or cost or comfort) ...

What is your actual task? May be we can think about collaboration?

Best regards,

Wolfgang

Thank you people. All comments are relevant and I appreaciate your ideas.

As we see there are many ways to deal with this question according to your research topic, goal and scope.

I my case, I only suggested to evaluate cost, cycle time and process efficiency because they are quite often related to the Lean Manufacturing concept. Moreover, they are simple metrics and very used by any kind of manufacturing industry.

So, the main idea here is verify if these three factors are or not independent in view of using them in a multicriteria analyisis of different unit processes in an industry.

If these three criteria are dependent (e.g. via resources as suggested by prof. Ram), how could I make them independent? or can I aggregate them in only one criteria (e.g. cost)?

Best regards,

Diogo: If you are focusing entirely on the supply side (i.e., cost side) and not the demand side (i.e., revenue side), then it seems like you can do a set of separate uni-criteria analyses -- i.e., separately based on, say, process cycle time, process efficiency, and process cost. I don't think you can "make" them independent. They are or they are not based on standard definitions of these established measures. Also, since you seem focused on "lean," I think pretty much everything on the input side as well as things like process waste, scrappage, emissions, and so forth can be (often are?) expressed in monetary terms. Thus, you should be able to work with quantities expressed monetarily. You can express both Output and (Combined) Inputs in your Process Efficiency measure also in monetary terms, or choose not to depending on how you wish to express process efficiency (and, you may choose to express it in multiple ways). Finally, if you are focusing on a business enterprise, viewing things through a monetary lens is common practice.

I think money and lead time (this is what the customer is interested in, not your cycle time) are the prime measures. I however think you have to factor in revenues (more specifically throughput which is selling price minus truly variable costs). For example, let's assume that you have a five-station line with the internal constraint at station 3. If you scrap an item at station 1 or 2 you are scrapping raw materials costs only. If you scrap an item at stations 3, 4, or 5 you are scrapping the revenue earned from that item. You do not have the capability of catching up as you do at work stations 1 and 2. ROI becomes a prime measure. How much OE (fixed expenses such as wages and salaries) have you spent to make that throughput and what is your investment in the facility? This is essentially net profit divided by investment which is return on investment for your line (facility). If you have a very efficient line with high process efficiency and you don't sell the product then of what good is it? So unless you are just simulating a line for academic purposes with many limiting assumptions, a holistic view is needed. There are many, many stipulations that must be considered if an internal or external constraint exists AND a constraint must exist or one could make infinite profits!

Best regards,

Jim

Importance of raw material means availability and alternate substitute are also another factor those affect the production process. Again machine failure rate is another factor which define the efficiency of machine. production capacity I think a machine has a fixed capacity and it can't be go beyond. It may be less than equal to the maximum capacity of a machine. Product rate is important which is varies between normal production rate and maximum production rate based in the demand, availability of finished good stock and availability of raw material.

Dear all

Thank your critical questions and sharing your idea in RESEARCH GATE. These type questions and metric selection is complex especially after the development of SCM. My comments summerized as follows:

• One of the issues important to understand the difference between performance measures and performance metrics. As Mbugua et al. (1999) state, performance indicators determine the required measurable evidence to prove that a planned effort has achieved the expected result. Based on their definition, indicators are called measures when they can be measured without ambiguity and with some degree of precision. In other words, performance measures report clearly about the relationships between program activities, outputs and outcomes associated with them. it may be important to balance both in the manufacturing because you may not get clear picture if you focus in one of them.

• The second important area is performance measurement issues the alignment of common metrics across companies and supply chain performance measurement. Research on performance measurement systems (PMS) have mostly been focused on a single company. However in the last few years focus has shifted to incorporate a supply chain perspective, with several PMS proposed. An important step to transforms the individual business units into a fully operational integrated supply chain member is to design and implement supply chain performance measures and performance measurement systems. From such design each business enterprise will be take a responsibility not only for its own business performance but also for the overall performance of the supply chain. The metrics for manufacturing depends on the type manufacturing industry and level of integration in the supply chain. BECAUSE; the manufacturing industry is not separate part of the entire supply chain. In my opinion, you need to consider also the integration aspects in the supply chain with manufacturing industry perspectives. Generally, most of the manufacturing industries are sensitive and need to focus on quality, cost and delivery time. In addition the sustainability and environmental consideration are becoming the other important consideration for the manufacturing industries. Therefore; the choice of measures is directly related to the nature of the manufacturing activities. A relevant measure for a flow-line will be totally meaningless for a mixed volume high variety assembly cell. A viable approach to facilitate the choice of measures is to identify the manufacturing characteristics based on complexity and uncertainty. In operational supply chain, a bigger challenge is to collect, sort and analyze the data generated by each processes. The challenge for many companies lies in determining what information is necessary to drive improvements and efficiencies at each process in the supply chain, and designing an information management environment to turn the raw data into meaningful metrics and key performance indicators (KPI). Key performance indicators are measurements that directly relate to key business requirements. Information from supply chain management (SCM) processes must be collected, measured, analyzed and continuously monitored. This requires integration of data coming out of ERP (Enterprise Resource Planning), SCM and all other systems supporting these business processes. Supply chain integration software enables companies to work in partnership with other links both in upstream and downstream supply chains.

• I have some experiences related to the SCOR model. The SCOR model advocates hundreds of performance metrics used in conjunction with five performance attributes: reliability, responsiveness, flexibility, cost, and asset metrics. For practical purpose companies can typically select among four to six of them to focus on (Huang et al., 2005). SCOR five performance attributes consider both internal and external viewpoints. The SCOR model suggests five are of performance measure: adaptability, flexibility, responsiveness, reliability, cost (SCC; 2010). The total performance measures are around 130. In order to make your company successful, you need to select the most appropriate one in form of Key Performance Indicators (KPI). Next, one needs to prioritize performance attributes and measures to align with one’s adopted strategy because it is not possible for a SC to achieve excellent performance in all aspects. Since majority manufacturing industries in developing countries are inefficient supply chain, they should not excessively emphasize flexibility and responsiveness metrics because doing so could deviate from its strategy but overly accentuate cost factors. you may try this one also for your research.

• Some of the references listed below if it may help you further reading

1. Georgise, Fasika B., Thoben, K.-D., Seifert, M., (2013), “Assessing the Existing Performance Measures, & Measurement Systems in Developing Countries: An Ethiopian Study”, Global Journal of Researches in Engineering: Industrial Engineering, volume 13, Issue 2 version 1 2013.

2. SCC, Supply-Chain Council. “Supply-chain operations reference-model”. Retrieved from

http://www.supply-chain.org

3. Hon, K. K.B. “Performance and Evaluation of Manufacturing Systems”. CIRP Annals - Manufacturing Technology”. Volume 54, Issue 2, 2010, Pages 139–154.

4. Huang, S.H., Sheoran, S.K. and Keskar, H. “Computer-assisted supply chain configuration based on supply chain operations reference (SCOR) model”. Computers & Industrial Engineering, Vol.48, No.2, 2005, PP. 377–394.

Your question can probably not be answered in general as manufacturing systems are too different. When you look at the manufacturing of cardiac catheters it is obvious that cost is secondary when you don´t manage to get quality right. So stability of process and absence of faulty products are the dominant factors. In automotive industry you very often find the combination of forming presses (extremely short cycle time, very long set-up times) and following welding procedures (long cycle time, no or little set-up times). So in these cases lot sizing and stock (cost) as well as set-up times are relevant criteria. Faulty products are easy to detect and can be discarded without mayor consequences. And there are many more examples.

For your cases it seems to make sense to define a manufacturing process or a category of processes you refer to.

Generally. For evaluating of machine you can take Cmk index, geometry inspection with accuracy protocol, repeteability of process, for production is best parameter OEE, simply you can take OEE like ratio between real production time (measured like total of norm time for all produced parts during shift) and theoretical shift time - for example you make 6 good pc´s for 30 minutes, it takes 3 hrs shift has 8 hrs, OEE is 3/8x100 37,5%. This is about availability of machine. You can improve it with capacity planning for maintenance and with focus on basic maintenance metrics MTBF, MWT and MTTR.

The metrics depend on who you are and to what type of customer you are catering to.

In some cases, flexibility could be an important performance metrics. In many cases, cost based measures could be important. In some cases, time based measures could be relevant.

The performance system need to factor in who you are and for who you are in the market place !

Grouping your main process selection parameters as main criteria groups and their constituents /subcriteria under each tree-branch according to the Analytical Hierachy Process or any of it's variations, could prove helpful. The Pareto 80-20- rule could then help you classify any parameter (dependent or independent) to the group where it is mostly important. You should also consider including environmental (e.g. CO2 footprint) criteria as well as safety (for the operating personnel) , level of technical maturity (well established, innovative-prototype or experimental technique).

When you want to do independent parameters for manufacturing without first taking the manufacturing into the Process Context of an enterprise architecture you fail to realize what the value that is gained or loss within the enterprise as a whole. There are two sides of the enterprise; cost cutting potential and value potential. Both cost cutting and value can be transforming and innovative. To transform is to look at your current process and using what you already have as pieces and parts of your current organizations assets for just the process context would be to: 1) Define and implement process standards; 2) recognize process harmonization potential; 3) Identify duplication of business processes: 4) Outline the optimization potential in the process execution; 5) Classify process drivers (performance and cost cutting); 6) Specify the process flow inefficiencies; 7) Spot the resource reputation in the process construct; 8) Discover the siloed process overlap across the organization; and 9) Spot potential for process automation (application tasks). These potential are in cost reduction and can be measured as you have identified with some of the units of measures for manufacturing in general. However the value potential relates more towards innovation and this is more seeking new value or added value in your products to attract new customers or to keep current customers. These values tend to lead you into looking outside of your current operations and manufacturing materials etc. To find these values: 1) Align business processes to operational goals; 2) Ensure that process innovation is based on operational objectives; and 3) Link activities to Business Model transformation. Just some suggestions to your question.

A simplistic answer could be: Evaluate the perfroamnce on the following meassures:

Customer satisfaction,

Cost,

Flexibility

Each of the above may have different metrics to be collected , measured and analysed.

,

There are only 3 fundamental principles that must be measured in a manufacturing environment. COST QUALITY AND DELIVERY. For every one of them there is a whole pile of KPIs that can be used depending on the nature of the operations and the operational strayegy ypu decide to follow. Delivery has to do with your lead times but your lead times are directly related to your workload, unless ypu choose to have infinite capacity, therefore in order to maintain your lead times you might be having KPIs on the schedule stability for example. Furthemore workload also affects your queuing times. But low queue times ensure low lead times but also may cause low utilisation. Therefore creaye an operational strategy that serves the business strategy and then decide on your KPIs.

It seems that everybody is forgetting one of the most important metric in our future world: sustainability measured in all three areas of social, economic and ecological value. Manufacturing activities use one third of all the energy we produce but still we mismanage this consumption. One metric we have found for example is the waste produced by Mass Production with the business model that "push" the products on the market and hope that the consumer will buy. Unfortunately it is not the case for many products if not for the majority. One simple example: shoes. Mostly are mass produced. 18-20 billion of pairs of shoes every year. How many are unsold at the end of the season? 20%! We have calculated how much energy is consumed for these 20%: it amounts to 6 large 1GW power stations that work 24hours, 7/7 days for 360 days. All that energy (but there is also water, air pollution, etc.) for NOTHING! These are metrics that we should take into consideration and we should try to change the way our society is working.

My 2 cents worth of input: The bottom line of any organisation is making money (not cost) i.e. profits. If any activity or non-activity add value in the market place, depending on the nature of the organisation and the customer base it serves, all other things are secondary.

Hi Diogo:

There are different kind of manufacturing systems and it can be classified according to the process configuration. This configuration depend on the manufacturing strategy.

Then, the metrics that you could use depend on the process configuration. For example, a job shop process is appropiate to face hight flexibility requeriments; in other way, if you need efficiency and low cost it is better to adopt a line configuration. So the proper metrics depend on the aim of the manufacturing system into the manufacturing strategy.

Therefore there is not a unique set of metrics for all kind of process because that depend on the system goals.

Regards,

William

In general, The most important factors are:

1. Cost

2. Flexibility

3. Quality

Each factors can be decomposed into several sub-factors.

For example:

Flexibility

Manufacturing Flexibility

Automatic tool change capability

setup time.

Exchangeability and labor movement between m/cs.

Process Flexibility

work in process (WIP).

waiting time for parts

Equipment Flexibility

machine utilization

Idle Time

Improving Productivity

Labor cost

Material cost

Quality

Quality Standards

Quality Level

the standardization of product activities

Product Quality

the defect rates

the Waste & Scrapes

the rework on parts

Improving Design Capability

Product Design

Product design\new part design capability

numbers of Drawings

Parts Standardization

Cost

Production Cost

Maintenance Cost

Training Cost

Impossible to say. In the end, the three sustainability factors mentioned by Claudio Boer are a bottom line. The effects of poor quality for instance affect these three fields: It leads to rework and scrap, which affects costs and the environment. But it also affects worker morale and can result in loss of customers and thus, of jobs.

As many authors above mention, it is also depending on the situation. Assume that you normally focus on cost and environmental impact. But if you have had a breakdown and lagging behind in production, then suddenly throughput time becomes more important.

I agree Leo De Vin. Sustainability factors are the bottom line but they should also be the priority on the metric to evaluate manufacturing processes as Silva is looking for. There different metrics depending the focus we are using to evaluate the manufacturing processes. My point was and still is that we should seriously start to consider that we are and we have to enter in the new paradigm of Sustainable Production that takes into account as major aspect the sustainability of our world. Today we have the possibility to measure (metric) this sustainability for our manufacturing processes. It is not easy, it is complex but let us research and progress towards this goal. We must look at the end of Mass Production and all its waste.

the cycle time and the cost are generally two conflicting objectives. Process efficiency is a consequence of these objectives

I think the process should be evaluated consistent with customer priorities. In general, a customer wants: Low price, high quality, quick delivery and market response time, high customization level, and easy maintenance. Of late, companies' policies on environmental protection and people-oriented policies have become important criteria for customers in their buying decisions. A so that a process must be evaluated exactly on those attributes to improve competitiveness and, thereby, profitability and strategic ascendancy.

The exact mix in which thee priorities should be built in depends on markets, economy, customer preferences, etc. more advanced economies tend to support value over price.

Ashok

What most of you have already commented on are the Engineering measures, nicely summarised by Claudio R. Boer above and in more detail by Abdulrahman Al-Ahmari. Your accountant would also look at other financial and commercial measures, such as the return on invenstment, assett utilisation, floorspace (area) return per square foot. You may want some of the marketing measures, such as flexibility, order turn time (receipt of order to despatch of goods). Your safety representative will have measures related to injuries, ergonomics, amount of safety equipment around the machine / process that requires maintenance. Some of this is linked to lean engineering and value stream mapping of the process in order to get a good workflow (factory ergonomics if you like).

Hi Diogo.

I agree some with some researchers that contributed with this discussion.

The metrics depend of the production strategy. For example, in Lean Manufacturing,the metrics must be developed to eliminate non-value added (NVA) activities. And these activities depend of costumer of process.

But in generally, the metrics aim to cost, confiability, flexibility, quality and velocity. And that metrics can be sub-divided em ohters metrics.

I hope that I have been able to help to this discussion.

Regards,

José Augusto

There are three common areas that show how the performance of the manufacturing looks like, they are: Quality, Productivity, and Cost.

I'm not a fan of using metrics through ERPs, I  do prefer visual boards with daily updates and follow up that present the performance of the manufacturing and highlight the problem areas. However, one of the most common metrics that can be used in the area of productivity is OEE which is influenced by three factors: availability, performance, and quality. There are also several metrics concerning cycle time and how you are performing compared to the takt. I also like to present how the manufacturing costs are effecting profitability through this formula: 

Profit= Revenue – {(Fixed Cost + Variable Cost) + Wastes}.

The inventory turns is also a strong indication of cash flow. 

On time delivery is an indication of customer service and customer satisfaction. And the manufacturing lead time is an influence. The less the lead time, the better the delivery rate.

There are tons of metrics but what is the purpose from measuring? What do you want to measure or have indication for? What are the actions that will be taken to improve the process?

On time delivery is one of the most critical metrics in terms of customer satisfaction. This includes production efficiency, supply chain efficiency and OEE. Any under performance in above three will affect on time delivery. 

Second important factor would be lead time. In current world of lean manufacturing, improving lead time means more business. The challenge is to keep lean and reduce lead time. In our batch process of multiple product line, we are constantly fighting to reduce lead time but lean manufacturing practices ( keeping inventory at minimum level ) often become s a bottleneck. 

Cost of manufacturing is a factor we want to monitor but difficult to collect data due to involvement of multiple department. 

Cycle time would be a very important metric to monitor.