One of the most important reasons for using software which reports manufacturing KPIs is to reduce waste. Metrics which provide a view into the areas which need the most attention allow users to focus on these areas and ultimately improve efficiencies and reduce waste. Knowledge becomes power when it leads to positive changes. The knowledge gained from real-time plant floor metrics can result in significant improvements in manufacturing operations and ultimately improve profits.

Using KPIs on the production floor is a highly effective way to expose, quantify and visualize waste. KPIs are also effective motivators. Effective KPIs quantify the waste and provide warning systems for processes which are falling out of specifications. They also help motivate by providing challenging yet attainable goals for the plant floor personnel. The real-time nature of web-based KPIs is also an important factor to consider. When operators can see how they are performing on a real-time or near real-time basis, they can react to changes in the process while they can still have a positive effect on the process. Waiting many hours or days later can mean lost opportunities to address issues. Real-time KPIs are actionable.

Another important quality of effective production floor KPIs is that they can energize the plant floor. They can promote a competitive spirit as well as continuous improvement. Empowering plant personnel with actionable information gives them meaningful control over the process.

KPIs also give corporate individuals visualize and achieve strategic goals. While plant floor metrics help address the seven main types of losses - breakdowns, changeovers, slow cycles, small stops, startup rejects and production rejects, corporate level KPIs can help show management where they stand with the seven major forms of waste found in manufacturing: overproduction, waiting time, unnecessary transport, over processing, inventory, unnecessary motion and defects.

Every manufacturer’s ideal set of KPIs is going to be different. Employing a one-size-fits-all approach is virtually impossible. The ideal set of KPIs for any one company will be strongly aligned with their strategic objectives and also be actionable by plant floor operators. However, there is one KPI that almost all manufacturing environments can use, which is OEE (overall equipment effectiveness).

Overall Equipment Effectiveness measures manufacturing performance as a percentage. It represents good pieces produced, the speed at which they were produced and the amount and nature of downtime. These three components account for all of the six big losses. This is almost always a useful and efficiency improving KPI that is applicable to most manufacturing processes. This KPI helps its users address specific waste and defect issues in a timely way and dramatically improve operation efficiency.