Manufacturing Execution System KPIs
Leading manufacturers strive for efficiency. That comes by bringing critical data, analysis, and control to the manufacturing process. Efforts in this space take many forms. One of the most popular and most effective methods of operating efficiently involves utilizing a manufacturing execution system (MES). This software solution helps to create a more efficient, and ultimately, more profitable manufacturing process. But, how does one measure efficiency? The short answer is – a lot of ways. In fact, there are several key performance indicators (KPIs) that managers use to measure efficiency and fluctuations in it over time. While the following represents a number of these variables, it certainly is not an exhaustive list.
Carefully monitoring productivity is crucial for efficient manufacturing. However, depending on the industry – how productivity is measured varies. One measure of productivity is known as availability – this is calculated by taking run time (or the time the equipment is scheduled to run) and dividing that by the planned production time (the total time the equipment could possibly be running).
Alternatively, you can measure performance, which is the net run time (when equipment is actually running) divided by the run time.
Lastly, productivity doesn’t just refer to total units produced – those units have to be of high enough quality to meet set standards. An MES helps to measure quality by taking the total number of units produced that meet those quality standards divided by the total units produced.
In our consumer-driven world, meeting delivery deadlines remains crucial to consumer satisfaction. Failing to properly estimate and meet deadlines negatively impacts the likelihood of customers returning, be they individual consumers or other businesses. A good MES can help keep an eye on timelines and improve accuracy and the frequency of meeting deadlines. Schedule attainment is measured by manufacturers in a variety of ways – depending on the industry and type of manufacturing operation. In any case, this KPI refers to the percentage of scheduled work that is actually completed during a certain span of time.
Most manufacturing requires machine work at some point in the process. Producing efficiently requires careful monitoring of equipment condition and functionality as well as optimal utilization of that equipment. Downtime is the major equipment KPI to note. It can refer to anytime the equipment is not in use during planned production time and is measured using productivity KPIs.
Downtime may be scheduled, such as the case with preventive maintenance and the times it takes to set up or disassemble the equipment before and after production. An MES helps to schedule preemptive maintenance in a way that lessens the impact on production by planning it during times where the equipment is least needed. Also, the software can help schedule production by product family or group together work orders that require the same product. Doing so reduces both setup and assembly time. Some MES solutions, such as our IMCO-CIMAG, also have built in logic that minimizes scheduling those.
Sometimes, downtime is unplanned, as in equipment breakdowns or personnel shortages. In cases of operators missing work – an MES can help shift workloads in real time to account for that loss of labor. The software alerts those on the shop floor of changes in workload in real time so that all operators work out of an up-to-date schedule. Similarly, when equipment breaks down unexpectedly, an MES can help either shift the work to other machines or reschedule the work order entirely. Because the software communicates breakdowns as they happen to the maintenance department, they can then plan a repair schedule based on priority. Often, the MES also helps provide enough context regarding the repair, such as specific tools or certain personnel needed, so maintenance knows quickly what is needed on their end as they prepare.
Overall equipment effectiveness (OEE) can also be measured by an MES. OEE factors in availability, performance, and quality. Because this KPI is so comprehensive and reflects multiple factors, manufacturers widely accept it as the standard for measuring productivity. A perfect OEE rating would be 100%.
Producing a high volume isn’t the only manufacturing goal. Products must be of high quality as well. This ensures customer satisfaction and less need to correct errors down the road. First pass yield (FPY) is an important quality KPI, and it measures the rate at which the first run of a production results in products that pass quality standards. When a product comes off the production line that fails to meet quality standards, that is sent back for changes and affects rework. Aiming for a high first-pass yield and low rework means manufacturers spend less time and resources correcting production errors.
In cases where a finished product not only fails to meet quality standards but also cannot improve, that’s referred to as scrap. A high scrap rate means lots of wasted material, time, and money.
Proper inventory management does not mean only finished goods are stocked so that they are ready to ship when purchased (this is done via an ERP). It also means managing the inventory of raw materials so that it is not often staged and sitting idle next to the production area as it waits for machines to open up and/or operators to become available. Efficient scheduling and efforts to reduce both scrap and rework helps to keep this build-up of raw materials to happen.
You Cannot Fix what you Don’t Know and you Cannot Know what you Don’t Measure.
Productivity and efficiency don’t come without dedicating the time and resources needed to continuously monitor and improve manufacturing processes. Accurate, real-time KPI measurements are the first step, as knowing where you’re at now helps drive planning for the future. This doesn’t just apply to managers. It’s also helpful for employees on the shop floor to understand what these KPIs mean and to see them throughout the production process. Some manufacturers even choose to display relevant data where it is visible to those working in production, as a way of encouraging employee ownership when it comes to improving.
When it comes to selecting an MES solution, there are options. Because of the variation in the manufacturing process across each industry and individual company, it’s important to ensure the chosen solution has a history of proven results. Hearing client testimonials and reviewing case studies that involve manufacturers in similar industries is a great place to start. At IMCO Software, we pride ourselves on a long-standing tradition of improving the manufacturing process for our customers. We’ve got the data to back that up. If you’d like a chance to discuss how the IMCO-CIMAG MES can improve productivity and efficiency at your facility, we’d love to connect. Contact us today for a free demo and consultation!
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