This document discusses 10 key performance indicators (KPIs) that are important for manufacturing. It defines each KPI, provides its formula, and in some cases provides a brief description. The 10 KPIs are: production activity (or volume), cycle time, take time, inventory turnover, return on assets, first pass yield, yield factor, overall equipment effectiveness, on-time delivery, and avoided costs.

1. MANUFACTURING
BY NICOLAS BOUCHER
KPIs
you need to learn
SWIPE
10

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INDEX
PRODUCTION ACTIVITY (OR VOLUME)
CYCLE TIME
TAKE TIME
INVENTORY TURNOVER
RETURN ON ASSETS (ROA)
FIRST PASS YIELD
YIELD FACTOR
OVERALL EQUIPMENT EFFECTIVENESS (OEE)
ON-TIME DELIVERY
AVOIDED COSTS
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3. 1
10 MANUFACTURING KPI'S YOU NEED TO
LEARN
PRODUCTION
/ VOLUME
BY NICOLAS BOUCHER
ACTIVITY
Description: Calculates the value of
the production output in monetary
value
Formula: Sum of monetary value of
all finished goods produced within a
defined period

4. 2 10 MANUFACTURING KPI'S YOU NEED TO
LEARN
CYCLE
TIME
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Description: Average amount of time to
make one product, including process,
inspection, move and queue time
Formula: Process time + Inspection time
+ Move time + Queue time

5. 3
10 MANUFACTURING KPI'S YOU NEED TO
LEARN
TAKE
TIME
BY NICOLAS BOUCHER
Description: Rate at which you need
to complete a product to meet
customer demand
Formula: Production available time /
Customer demand

6. 10 MANUFACTURING KPI'S YOU NEED TO
LEARN
INVENTORY
TURNOVER
4
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Description: Amount of time that
passes from the day an item is
purchased by a company until it is
sold
Formula: Cost of Goods Sold /
Average Inventory (over period of
time)

7. 5
10 MANUFACTURING KPI'S YOU NEED TO
LEARN
RETURN ON
ASSETS (ROA)
BY NICOLAS BOUCHER
Description: Measures how
effectively a company is using its
resources (machine and inventory) to
make a profit
Formula: Net Income / Average Total
Assets

8. 6 10 MANUFACTURING KPI'S YOU NEED TO
LEARN
FIRST
PAST YIELD
BY NICOLAS BOUCHER
Description: Measure of quality and
performance and is at the heart of
production efficiency and
profitability
Formula: Number of good products
finished / Number of production orders
started (expressed in percentage)

9. 7
10 MANUFACTURING KPI'S YOU NEED TO
LEARN
YIELD
FACTOR
BY NICOLAS BOUCHER
Description: Calculates the number
of items to start to have one good
finished product.
Formula: Number of production
orders started / Number of good
products finished (same formula than
First pass yield, but inverted as we
look for the number of orders to start)

10. 8 10 MANUFACTURING KPI'S YOU NEED TO
LEARN
OVERALL
EQUIPMENT
EFFECTIVENESS
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Description: Compares the
performance of a machine to its
relative capacity
Formula: Good Count × Ideal Cycle
Time / Planned Production Time

11. 9 10 MANUFACTURING KPI'S YOU NEED TO
LEARN
ON-TIME
DELIVERY
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Description: Measures if an
organization is meeting its goals in
regards to promised delivery times
Formula: On time units / Total units

12. 10
10 MANUFACTURING KPI'S YOU NEED TO
LEARN
AVOIDED
COSTS
BY NICOLAS BOUCHER
Description: How much money you
saved by using preventive
maintenance
Formula: Assumed Repair Cost +
Production Losses – Preventative
Maintenance Cost

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