The Future of Production: Top 25 KPIs to Track for Efficiency and Quality

KPIs production

Production KPIs matter now more than ever as businesses recover from the shocks brought about by the pandemic. When the global crisis slowed down production processes, companies were forced to make difficult strategic decisions.

Market shifts, movement restrictions, and material scarcities stemming from supply chain disruptions have affected several areas of the production process.

For instance, chemical manufacturers worldwide had to trim down capital and operational expenditure and shrink their operations to 40-60 percent capacity. This is due to insufficient manpower, dwindling demand, and inadequate raw material supplies, according to the data published in Manufacturing Tomorrow.

To meet contractual obligations and increase productivity, companies are encouraged to rethink their processes, explore new opportunities, and adapt to trends.

Digital connectivity is among the trends that will dominate industries as the 5G coverage worldwide continues to expand. Sustainability is also seen as a critical factor that will shape business operations and investments. The global market for green building materials is expected to grow from US$238 billion in the year 2020 to US$425.4 Billion by 2027.

Developing a new production strategy

However, the future of production is not just about the what and the why but also the how.

The potential of innovative technologies and business models can be further realized if their application is based on data-backed decisions. Such decisions help companies minimize risks, carry out relevant strategic plans, and see what works and what doesn’t.

With this, decision makers and managers should pay attention to their production KPIs, which aim to guarantee the quality of the production process, from efficiency to productivity as well as the quantity and quality of output.

The KPI Institute has released “The Top 25 Production KPIs – 2020 Extended Edition” to provide companies an international perspective on the most popular production KPIs. It is designed for organizations and professionals who want to measure the components that contribute to the successful implementation of a production strategy.

With over 100 pages, the report presents the most viewed KPIs based on the information gathered from, a database of over 20,000 documented KPIs.

You can download the “The Top 25 Production KPIs – 2020 Extended Edition” to access the profile of each KPI and learn its potential impact on your production strategy. You will also find exclusive in practice recommendations and best practices for KPI selection and documentation.

Here is an overview of the top 25 KPIs categorized into five areas:

Production Efficiency – ensures that the production locations are always running at full parameters.

  • # Units per man-hour
  • % Production capacity utilization
  • # Ideal run rate
  • # Production capacity
  • # Unused production capacity
  • # Work in progress
  • # Production lead time
  • % Downtime due to operator lack of training
  • % Unplanned downtime in production

Production Timeline – indicates all the time-related aspects of the production process.

  • % Production schedule attainment
  • % Production schedule adherence
  • % Production uptime
  • # Unit production time

Inventory – describes the amount of products on stock either from returns or demand, excluding the safety stock.

  • % Recovery yield rate of returned products
  • # Working stock
  • $ Work in progress
  • % Production delays due to raw material shortage
  • # Decoupling stock
  • % Boomerang return rate
  • # Frequency of production delays due to inventory shortages or supply delays

Maintenance – monitors the upkeep of the production plant and equipment.

  • # Production plants
  • % Machine utilization in production

Production Costs – refers to expenses implied by the production processes.

  • $ Penalties cost due to unsatisfied demand
  • $ Production costs per unit
  • $ Direct material variance

Read more about each of the KPI in “The Top 25 Production KPIs – 2020 Extended Edition.”  You can also sign up for the live online course offered by The KPI Institute to learn how to implement a KPI Measurement Framework in your organization.

For inquiries, get in touch with Cristina Mihăiloaie, Business Unit Manager – Research Division: [email protected], +61 (390) 282 223 or +40 (749) 424 517.

The KPI Institute October 1st, 2021 Research Tags: , , , , ,