KPI’s For Manufacturers & How To Measure Them
For manufacturers it can be challenging trying to determine which KPI’s or Key Performance Indicators you should be working towards in order to grow your business. From getting a handle on your inventory, to margin growth, to sales and customer growth, what are the KPI’s that will best underpin your company’s success?
Different KPI’s For Different Departments and Different Types Of Manufacturers
Unfortunately there is no “one size fits all” solution to determining which KPI’s you should be working to. The success determinants different between different manufacturing types and also differ within a single company depending upon which department you are talking to.
Within most organisations there a common financial KPI’s that track business performance against sales, costs, margins, cashflow, and asset utilisation. KPIs can also focus on day to day business operations as it relates to schedules, project/ job completion, inventory management, on-time completion, backlog, quality and more.
Key Performance Indicators for Manufacturers
Manufacturers across all industry segments rely on measurements to monitor business activities and performance, documenting successes and challenges, and support decision-making.
Going beyond mandatory accounting and reporting requirements, smart management will incorporate key performance indicator measurements into their decision making framework, producing valuable intelligence that will ultimately help to run the business more effectively and efficiently.
Tracking Manufacturing Business Performance Against KPI’s – How It’s Done
Because KPI’s are a measurement of historical data against an pre-set performance level, once you’ve decided upon the KPI’s to be measured, it is easy to track performance.
For example, you might want to measure actual sales volume of a particular widget against past sales performance . The data can then be presented in a dashboard format where different views of the same data can be easily presented and shared with all those who need to know.