10 Key Performance Indicators
(KPI’s) In Manufacturing
1. Overall Equipment Effectiveness (OEE):
Measures the overall efficiency and productivity of
manufacturing equipment, taking into account
availability, performance, and quality .
Calculated By:
Overall Equipment Effectiveness = Availability * Performance *
Quality
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2. Cycle Time:
Cycle Time: Measures the time it takes to complete
a production cycle, from start to finish a process or
product.
Calculated By:
Cycle Time = Net Production Time / No of units Produced
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3. Scrap and Rework Rate:
Tracks the percentage of defective or rejected
products in relation to the total production output,
indicating the efficiency of the manufacturing process .
Scrap Rate calculated By:
Scrap rate = Scrap waste / Total material used * 100
Rework Rate Calculated By:
Rework rate = Total Quantity of Reworked Products / Total
production Quantity * 100
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4. First-pass yield (FPY):
Measures the percentage of products or components
that pass quality checks during the initial inspection
without the need for rework or repair .
Calculated By:
First pass yield = No of good products finished / Total Number of
Products Manufactured
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5. Inventory Turnover:
Calculates how quickly inventory is being converted
into sales by measuring the number of times inventory
is sold or used up within a specific time period.
Calculated By:
Inventory Turnover = Cost of Goods sold / Average Inventory
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6. On-time Delivery:
Measures the percentage of customer orders that
are delivered on or before the agreed-upon
delivery date.
Calculated By:
On Time Delivery = On Time Delivered units / Total Units
Delivered
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7. Production Yield :
Tracks the percentage of products manufactured
that meet the required quality standards and
specifications.
Calculated By:
Yield = (Total Items Produced – Defective Items) / Items
Produced
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8. Return on Investment (ROI):
Evaluates the financial performance of
manufacturing operations by comparing the net
profit generated to the capital invested.
Calculated By:
Return On Investment (ROI) = Net Income / Average Total
Investment
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9. Health and Safety Incidents:
Tracks the number of workplace accidents, injuries,
or incidents, promoting a safe and healthy working
environment.
Calculated By:
Incident Rate= Number of Incidents * 2,00,000/
hours worked by all employees
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10. Customer Complaint Rate:
Measures the number of customer complaints
received regarding product quality, delivery, or
service, reflecting customer satisfaction levels.
Calculated By:
Customer Complaint Rate = Rejected Goods / Total Number of
Goods Delivered
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Source
This content was referred from:
❖ Key Performance Indicators by David Parmenter
❖ Essential Manufacturing KPIs by Bernie Smith
❖ Occupational Safety and Health Administration (OSHA)
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