As manufacturing technologies have evolved, your customers expect speed and reliability. production planning key performance indicators (KPIs) will inform business decisions, help you identify areas for improvement, and potentially reduce your operating costs. But tracking the wrong KPIs can leave you addressing symptoms instead of refining your operations for efficiency.
Understanding Production Planning KPIs and their Goals
KPIs for production planning and control are quantifiable metrics that compare actual production information to your operational goals. You need supply chain intelligence and real-time visibility into every KPI for production planning and control to assess your performance. Surgere’s manufacturing supply chain solutions collect and report critical data for these production KPI examples.
21 Essential KPIs for Production Planning and Control
Break down your KPIs by function to track those that matter most.
Capacity and Utilization KPIs
Capacity metrics help you match your resources to customer demand.
1. Capacity Utilization
Calculate how well you’re meeting your production potential using this formula: (actual output/potential output) x 100. For example, if your potential output is 15,000 units and you produce 12,000, your capacity utilization is 80%.
(12,000/15,000) x 100 = 80
2. Machine Utilization
Machine utilization measures machine efficiency. Divide the machine’s run hours by its available hours and multiply the result by 100. For example, if you schedule a machine for 80 hours a week, but it runs for 75 hours, your utilization rate is 93.75%
(75/80) x 100 = 93.75
3. Throughput
Throughput is the length of time from initial order to delivery. Measure it in intervals, including processing time, inspection time, move time, and queue time (how long each item waits between steps) and add the numbers for your total throughput time.
4. Overall Equipment Effectiveness (OEE)
OEE refers to the percentage of time your team is productive. Measure it by calculating availability (run time minus total downtime), performance (your actual production speed vs. the machine’s maximum speed), and quality (the ratio of usable parts) and multiply the results.
Production and Efficiency KPIs
This set of metrics helps you identify bottlenecks and other inefficiencies in your production planning process and workflows.
5. Cycle Time
Cycle time is how long it takes to complete a unit or batch from start to finish. It helps you plan production and machine schedules accurately.
6. Takt Time
This KPI measures your maximum allowable manufacturing time to meet customer demand. Calculate it by dividing available production time by customer demand. For example, if customers order 300 units per 480-minute shift, you have 1.6 minutes to complete one unit.
7. Changeover Time
Between product lines, your team has to shut down equipment, clean the area, setup for a new product line, and fine tune workflows for the next product line. How long it takes is your changeover time.
8. Production Downtime
This refers to time in which your machines or people aren’t working. Planned downtime is usually due to routine maintenance. Unexpected equipment failures, weather-related delays, and other surprises cause unplanned downtime.
Scheduling and Forecasting KPIs
Scheduling and forecasting KPIs help you allocate your staff and improve demand planning.
9. Schedule Adherence
This KPI tells you how much of an employee’s working hours they spend working. Calculate it by dividing actual time spent working on scheduled tasks by the total scheduled time and multiplying the result by 100. Factor in breaks.
10. Production Attainment
Production attainment measures how well your team met its planned goals. Use this formula to find your rate: (actual production/production targets) x 100.
11. Forecast Accuracy
This is an important metric for supply chain planning. If your numbers are significantly different, you may need to change your demand forecasting tactics using AI in manufacturing or other tools.
12. On-Time Delivery to Production
OTIF performance refers to the total number of orders you delivered to customers before the expected date.
Inventory Management KPIs
Use inventory analysis and KPIs to reduce your holding costs and avoid costly stockouts.
13. Work-in-Process (WIP)
WIP is one of the inventory management KPIs that refers to the volume of unfinished goods in your factory.
14. Inventory Turns
Turnover refers to how often you sell and replace your whole inventory. Calculate it by dividing your cost of goods sold by your average inventory in the same timeframe.
15. Stockout Rate
This KPI tells you the percentage of customer orders you couldn’t fill because you didn’t have the inventory on hand. Use this formula to calculate it: (Number of stockout events/total demand events) x 100.
Quality Control KPIs
Measure these KPIs to understand how efficiently you product quality inventory.
16. First Pass Yield (FPY)
FPY refers to how many products meet quality standards without rework, repair, or scrapping.
17. Scrap and Rework Rate
Your scrap rate is the total number of products you had to discard because you couldn’t rework or fix them. Rework rate is the percentage of products that don’t meet quality standards, but you can fix them.
18. Defect Density
This KPI measures how many products had defects relative to your production output.
Production Cost KPIs
Use these KPIs to make your processes more cost-effective.
19. Manufacturing Cost per Unit
This refers to the total cost it takes to manufacture it. Calculate it by: (Total production costs/total units produced).
20. Scrap and Rework Cost
Understand how those defective products are costing you by multiplying rework time by your labor rate. Add replacement parts and variable overhead to the total.
21. Mean Time Between Failures (MTBF)
Calculate your machine and system reliability by dividing the total time of operations by the number of failures in the same time. You usually use a year.
How to Improve Production Planning KPIs and Metrics
KPIs only improve your operational performance when you have the right tools in place. Improve your success through:
- Establishing Baselines: Know your current conditions before setting targets to benchmark improvements.
- Replace Manual Inputs With Real-Time Data: Use Surgere’s supply chain solutions to get real-time information.
- Align KPIs to Roles: Measure data based on your need from floor supervisors to production planning.
- Review KPIs Regularly: Production needs will shift, so measure your KPIs consistently.
- Connect Leading Indicators to Lagging Ones: Optimizing cycle time and schedule adherence will help you make more on time deliveries.
- Use Real-Time IoT Tracking: Make sure your KPI data reflects what is actually happening.
Track and Reach Your Production Planning KPIs with Surgere
Your KPIs are only as helpful as the data you use to calculate them. Surgere’s IoT infrastructure gives you accurate visibility into your key metrics to enhance operations and service delivery.
Contact us today to learn more.
