KPI EXAMPLES FOR THE  (https://www.datapine.

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MANUFACTURING INDUSTRY
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MANUFACTURING KEY PERFORMANCE

INDICATORS AND METRICS
✔ SEE DIFFERENT TEMPLATES & DESIGNS ✔ FIND & TRACK THE RIGHT
MANUFACTURING KPIS TO MEET YOUR CORPORATE OBJECTIVES

A manufacturing KPI or metric is a well-defined measurement to monitor, analyze and optimize

production processes regarding their quantity, quality as well as different cost aspects. They give
manufacturers valuable business insights to meet their organizational goals.
/
Here is the complete list of the most important manufacturing KPIs and metrics, that we will
discuss in this article in every detail:

Production Volume: Track the quantities that

your are able to produce
Production Downtime: Analyze and optimize
your maintenance
Production Costs: Monitor the costs implied in
the production  (https://www.datapine.com/contact-us)
Defect Density: Track the damaged items right
away
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Rate of Return: Measure how many items are
sent back
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Right First Time: Understand the performance
of your production process
Asset Turnover: Acknowledge your assets in
relation to your revenue
Unit Costs: Track and optimize your units
costs over time
Return on Assets: See how profitable your
business is relatively to its assets
Maintenance Costs: Evaluate your equipment
costs in the long run

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PRODUCTION VOLUME
Evaluate the quantities that your business is able to produce
over time
Our first manufacturing KPI example will give you an overview of what your factories are able to
produce in a month, a semester or a year. You then have the big picture of what your business is
handling and when. Comparing it to previous similar periods is a good indicator of evolution, to stop /
anomalies, regress or progress. Likewise, measuring which machine makes up for which percentage of
the production can give you an idea of their performance and importance -no one wants to see the
45%-production machine breaking down without a plan B. Acknowledging that will also help in
assessing your assets and what you invest in them (cf. Return on Asset).

Performance Indicators

A good production volume is one that satisfies demand but does not leave too much inventory in
stocks.
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Relevant Showcase Dashboard
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● Production Dashboard (/dashboard-examples-and-templates/manufacturing#production-
dashboard)
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PRODUCTION DOWNTIME
Optimize your maintenance by controlling when and why it
happens
One of the most important manufacturing metrics to track is the Production Downtime. If your
machines are not working, the result is money that can’t be made: reducing your downtimes to a
minimum must be your goal number one to avoid further lost profit. When downtime happens, it is
necessary to report the reasons why it occurred, as it is the only way you can track the problems,
assess them and then acknowledge what needs to be solved. Downtime can also be planned, when
/
the equipment needs
maintenance, or
during lunch breaks
and shifts: that way,
you can not only
optimize it, but also
keep it under control
by preventing
machines out of
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service, or inventories
running out of stocks
taking you by
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surprise.
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Performance Indicators

Try to reduce your downtime as much as you can. Monitoring it properly will help you improve
processes, boost profitability and evaluate the effectiveness of your equipment.

Relevant Showcase Dashboard

● Production Dashboard (/dashboard-examples-and-templates/manufacturing#production-

dashboard)
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PRODUCTION COSTS
/
Monitor the costs implied in the production of your different
products
The Production Costs by Product specifies how much each component of your product costs and how
much it represents for your finished product. Breaking down this manufacturing metric into the
various types of costs will tell you which ones are making the biggest part of your unit and can help
you if you want to track different expenses that can be optimized. Tracking these production costs
over time is a good thing to know how they evolve and if you manage, at the end of the day, to stay
under the target price per unit you set in order to make it profitable.  (https://www.datapine.com/contact-us)
Performance Indicators
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Measure the overall costs per unit your business has over a production cycle, and see if that makes you
profitable in regard to the sales price you want to set..  (https://tooldatapine.appointlet.com/)

Relevant Showcase Dashboard

● Production Dashboard (/dashboard-examples-and-templates/manufacturing#production-

dashboard)

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DEFECT DENSITY
Track the damaged items right away
Evaluating the Defect Density is an important task in the production environment. This is a key quality
indicator that is easy to gauge. The Defect Density pinpoints the number of defective products divided
by the total number of products produced. A manufacturing metric like this one will let you compare
the quality of your different products. It is helpful in identifying areas where problems occur, and will
let you take the measures to what must be rectified. Working with this metric alongside others like the
Right First Time KPI will lead to increased efficiency in your production process and ultimately, avoid
useless expenses that’ll save money.

Performance Indicators

Try to keep your defect density as low as possible and compare it to industry benchmarks.

Relevant Showcase Dashboard

/
● Production Quality
Dashboard
(/dashboard-
examples-and-

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templates/manufacturing#production-quality-dashboard)

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RATE OF RETURN
Measure how many items are sent back to your factories
Very similar to its retail counterpart, the Rate of Return evaluates the percentage of products that are
sent back to you. Returns are expenses that could be avoided, as they are products that need to be
processed all over again. They may come back to you for any kind of reason: defect, wrong packaging,
non-compliance, etc. Analyze these reasons in order to tackle the root cause of the problem, and avoid
/
further returns. Doing so will not only save you money but also earn you a better image in the eyes of
your clients, that will see you as more reliable. You can also assess which products are more subjected
to returns, to polish your analysis.

Performance Indicators

Try to keep it as low as possible and assess the reasons of these returns for your different products.

Relevant Showcase Dashboard

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● Production Quality Dashboard (/dashboard-examples-and-templates/manufacturing#production-
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RIGHT
FIRST
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TIME
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Measure the
performance  (https://tooldatapine.appointlet.com/)
of your
production
process from
the
beginning to
the end
Having to rework a
product is costly and
reveals a certain
inefficiency on your
supply chain. With
this manufacturing
metric, you will know how often you are able to produce something without any defect over the whole
production process. After measuring your ratio, the important move is to examine where and when the

/
failure happens, find the root cause of this issue and work on it to avoid similar problems in the future.
Comparing it to similar time periods over the years is an interesting analysis to do. Setting a target
percentage is also a good incentive to perform always better.

Performance Indicators

Right First Time = (Number of impeccable products / Total products) x 100

Once you have evaluated this ratio, set a target you want to exceed.

Relevant Showcase Dashboard  (https://www.datapine.com/contact-us)

● Production Quality Dashboard (/dashboard-examples-and-templates/manufacturing#production-
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quality-dashboard)
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ASSET TURNOVER
Acknowledge your assets in relation to your revenue
The Asset Turnover is actually more of a financial than a manufacturing KPI. However, it is highly used
in many different industries because of the important insights it provides. It represents the value of
your business revenue (or sales) relatively to the value of your assets. It is a good efficiency indicator
when it comes to assessing if your assets are generating value or not, and is all the more important if
/
you evolve in an asset-heavy industry such as the manufacturing industry. It is interesting to compare
this ratio, but it can only be done within the same industry – of course an online retail company will
have a really different one.

Performance Indicators

Asset Turnover = Revenue / Total assets. The higher this ratio the better, as it means that you generate
more revenue per dollar of asset.

Relevant Showcase Dashboard  (https://www.datapine.com/contact-us)

● Manufacturing Cost Management Dashboard (/dashboard-examples-and- (https://www.datapine.com/write-us)
templates/manufacturing#manufacturing-cost-management)
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UNIT COSTS
Track & optimize your units costs over time
/
This manufacturing KPI evaluates the total costs involved in the production of one item, including the
fixed costs and the variable ones. This unit cost can also be broken down to show all the costs (labor,
warehousing, equipment, material, etc) and analyze what are the major inputs and how much they
represent in the total. Note that sometimes, due to volatile energy costs for instance, they cannot be
measured accurately. Showing them with a trend over time helps in analyzing the evolution and see if
your business manages to stay under the target unit costs fixed, so as to have a profitable product.

Performance Indicators

Try to identify production processes you can optimize to decrease unit costs (https://www.datapine.com/contact-us)
over time.

Relevant Showcase Dashboard  (https://www.datapine.com/write-us)

● Manufacturing Cost Management Dashboard (/dashboard-examples-and-
 (https://tooldatapine.appointlet.com/)
templates/manufacturing#manufacturing-cost-management)

RETURN ON ASSETS
Measure your company’s capacity to generate profit for each
dollar of asset
Return on Asset (ROA) is another manufacturing metric borrowed to sales, like the Asset Turnover. It
shows how profitable your business is relatively to your overall assets; that is to say that this indicator
measures how efficient you are at using assets to generate profit. Since this KPI tells you what earnings
were generated from a capital you have invested, this can be also seen as a Return on Investment
/
(ROI). It is a good
indicator of
performance because
it tackles both income
statement and the
assets a company
needs to support its
business activities.

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Performance Indicators

Return on Asset = Net income / Total assets. Once again, the higher this percentage, the better for your
company. Benchmark to other businesses in your industry.

Relevant Showcase Dashboard

● Manufacturing Cost Management Dashboard (/dashboard-examples-and-

templates/manufacturing#manufacturing-cost-management)
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MAINTENANCE COSTS
/
Evaluate how much your equipment costs you in the long run
After assessing your assets, how much they produce and the revenue you get from them you cannot let
them wither, therefore maintenance is required. That’s why measuring this last manufacturing KPI is
critical to know which equipment needs more work than others, where the resources should be
focused and what kind of preventative measures can be implemented to optimize that maintenance
for the future. Set a target cost for a correct maintenance that leaves enough money aside for other
investments, and try to reach it. Compare your preventive and corrective costs, as the latter should be
inferior to the former, if done well.
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Performance Indicators
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Try to optimize maintenance costs over time and adjust your target accordingly.
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Relevant Showcase Dashboard

● Manufacturing Cost Management Dashboard (/dashboard-examples-and-

templates/manufacturing#manufacturing-cost-management)

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