Measuring data crucial to operational excellence

A new handbook released by the Manufacturing Enterprise Solutions Association (MESA) shows that manufacturers that leverage technology to measure key performance indicators have an edge in managing their operations, yet very few manufacturers effectively manage their performance. MESA released the results of their “Metrics That Matter” report at their annual conference in Orlando in...

11/01/2006


A new handbook released by the Manufacturing Enterprise Solutions Association (MESA) shows that manufacturers that leverage technology to measure key performance indicators have an edge in managing their operations, yet very few manufacturers effectively manage their performance. MESA released the results of their “Metrics That Matter” report at their annual conference in Orlando in October. PLANT ENGINEERING was a media sponsor of the event.

“What we’re talking about is manufacturers’ survival,” said Julie Fraser, Principal of Industry Directions, Inc, the study’s consultant. “If operations and finance aren’t on the same page at the same time, you have a company at cross-purposes. And most manufacturers can’t afford to be in that position today.”

The study also reveals that the top two manufacturing applications planned for investment in the next 12 months are plant dashboards and manufacturing execution systems. A larger percentage of the companies currently using these two applications have improved significantly against both operations and business metrics than others.

Among the study highlights:

  • Only 3% of study respondents report very effective links between operations KPIs and business metrics; this means that most companies’ management does not have views that accurately represent progress and plant contribution.

  • More than 70% of respondents measure on-time delivery, OSHA-reportable incidents per year, and manufacturing cycle time in their operations.

  • On-time delivery to request is a more common KPI than on-time to commit, indicating great progress in demand-driven and supply chain metrics.

  • One in three respondents plan to buy plant dashboards in the next 12 months, and 29% plan to buy MES, making them the top investments planned for the year, out of 18 software technologies in the survey.

  • Respondents using MES are over twice as likely to have improved over 1% annually on average in the past three years in upside production flexibility, energy cost per unit of production and market share.



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