7 KPIs Your Process Manufacturing ERP Should Track

One of the great features of today’s process manufacturing ERP systems is the ability to produce dashboards, reports, charts, and other displays of relevant information in exactly the format desired and on call or on schedule. Key Performance Indicators (KPIs) are one such output.

KPIs are the few statistics that show the health of your process manufacturing business in real time. They also can show progress toward the goals of the organization. They are like a doctor checking your pulse. It is only a single measurement but a key indicator of your health right now.

Revenue & Costs

What are some good KPIs to check on the health of a process manufacturer? Realistically, we can only track and act upon a select few so we must choose carefully. We might have one that measures revenue – perhaps the day’s shipments or bookings would work. Another KPI might be centered around cost or profitability that would make a bookend opposite the revenue indicator.

Quality Control & Goal Completion

Another KPI we could track might be the ongoing quality of the products or quality of our customer relationships. Another might show how we are progressing towards a goal. If we want to improve our market share, we could present the most recent share we command. There are no universal KPIs, each process manufacturing company will have its own expectations for batch quality, customer retention etc.

Cycle Time

Maybe we want to improve our cycle time from taking an order to shipment of the order. We split all setup time so that as much as possible is done concurrently with the previous batch. We have changed flow rates, temperatures, and pressures to move the ingredients faster in the process. Maybe we started with a mean time of twelve days and now we can boast six days.

Product Grade & Yield

We want to increase the percentage of product output that is the best grade - in other words, the product which commands the highest price. Last year we yielded 82% in the highest grade. We have studied the variations that cause lower grade output and made our process more stable. We found the catalyst that was more pure helps greatly at only a small increase in cost. Our goal is 97% at the highest grade and this week we reached 98%. Can we sustain that level? Tracking these KPIs within your process manufacturing gives your business clear targets and simultaneously tracks progress towards these.

Many KPIs will be financial. But while money is the universal language of business, there is a lot more data in our process manufacturing ERP we must pay attention to.

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Tom Miller

About the author…

Tom completed implementations of Epicor, SAP, QAD, and Micro MRP. He works as a logistics and supply chain manager and he always looks for processes to improve. He lives near San Francisco Bay in California and can be found on the water in his kayak or on the road riding his motorcycle. Contact Tom at customerteam@erpfocus.com.

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Tom Miller

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