What Plant Managers Measure: Metrics That Matter

10 April 2014

Gary Mintchell, Executive Director

One of the top benefits of membership in MESA International is a look into the full report of the “Metrics That Matter” research. MESA along with LNS Research just completed the latest edition of the survey. They are now ready to present some of the results in a Webcast live at 11 am EDT on April 16. Go to the MESA Website to register. In a recent LNS blog post, the metrics that plant management most monitored were presented and discussed. From the blog, “As a plant manager, you’re responsible for the day-to-day management and coordination of production, logistics, and maintenance in your assigned facility. Your position is one that’s hands-on and focuses on using all the resources at your disposal to maximize production accuracy and profitability while ensuring worker safety and government compliance in a particular unit of the manufacturing organization.”

2013-2014 Metrics that Matter Research Survey

As we’ve written about before at LNS Research, there are 28 top metrics that have been identified across eight key categories that are utilized the most for driving value for manufacturers today. These eight categories are as follows:

• Financial
• Inventory
• Innovation
• Responsiveness
• Efficiency
• Quality
• Maintenance
• Compliance

In one question, we asked over 200 respondents to identify at which level these eight categories were measured at their companies. According to the survey, the metrics categories that were viewed most at the plant level were:

• Innovation: At 53%
• Maintenance: At 43%
• Efficiency: At 40%

These three categories contain eight top metrics that the research shows plant managers are keeping a close eye upon.

Innovation Metrics

The top two metrics in the Innovation category that plant managers are monitoring are:

• Rate of New Product Introduction: As this requires an analysis and ramp-up times between design, development, manufacturing and customer support groups in order to determine how rapidly new products can be introduced to the marketplace, it requires the leadership and expertise at the plant level in determining the logistics of these factors and setting expectations.
• Engineering Change Order Cycle Time: This measures how rapidly design changes or modifications can be made to existing products and implemented all the way through documentation processes and volume production.

As both of these metrics look at innovation through the lens of manufacturing operations’ role of production, it’s not surprising to see that they are being monitored more at the plant level than other areas of the business.

Maintenance Metrics

This category includes:

• Percentage Planned vs. Emergency Maintenance Work Orders: A ratio metric that’s an indicator of how often scheduled maintenance takes place, versus more disruptive, unplanned maintenance.
• Downtime in Proportion to Operating Time: This metric is a direct indicator of asset availability for production, as it’s the ratio of downtime to operating time.

As unplanned/emergency events tend occur in a localized manner and ripple outward with their effects, these metrics that look at direct asset availability and performance are being viewed primarily at the plant level. It’s interesting to note that survey respondents reported viewing Maintenance metrics second-most at the Corporate level, at 33%. Therfore, asset utilization and return is also a key business concern.

Efficiency Metrics

This category includes the following top metrics that go to the heart of a plant’s ability to produce efficiently and with quality to meet customer expectations:

• Throughput: A measurement of how much product is being produced on a machine, line, unit, or plant over a specified period of time.
• Capacity Utilization: Indicates how much of the total manufacturing output capacity is being utilized at a given point in time.
• Overall Equipment Effectiveness (OEE): A multi-dimensional and sometimes controversial metric, OEE is a multiplier of availability, performance, and quality, and it can be used to indicate the overall effectiveness of a piece of production equipment, or an entire production line.
• Schedule or Production Attainment: A measure of what percentage of time a target level of production is attained within a specified schedule of time.

Visit the two Websites and check out the Webcast. See what your peers are measuring.