In our previous Actionable Insights blog, we discussed the Purchasing Commitments and Spending Action Center. Next, we will provide an overview of the Operations Efficiency and Utilization by Production Line Action Center as well as the associated key performance indicators (KPIs).
Action Center Overview
Efficiency and utilization are two of the oldest and most important metrics used by manufacturers. Maximizing equipment utilization helps ensure that the company gets the most from their investment in machinery and identifies scheduling or maintenance problems that can leave non-productive gaps in the operation. Efficiency helps to quickly identify problems with routings, training or costing, so it is an equally important metric. Here is a look at the specific metrics included in this action center, along with the ways they can help pinpoint operational issues.
KPIs for Tracking Efficiency and Utilization by Production Line
QAD Action Centers provide analytics to help both managers and users monitor metrics and KPIs. KPI highlights for the Operations Efficiency and Utilization by Production Line Action Center include:
Efficiency and Utilization by Site – At a Glance – 3 Months
The goal of every manufacturing company is to maximize productivity, and this visual makes it easy to assess whether a problem exists. The table shows efficiency, utilization and productivity factor by site, enabling management, production, or schedulers to quickly get a sense of the site’s overall use of capacity.
Efficiency and Utilization by Production Line – At a Glance – 3 Months
Problems may not affect the entire operation, so this visual allows the viewer to hone in on the productivity of a specific production line. This knowledge helps identify areas that may be contributing to overall site productivity issues so they can be readily addressed.
Efficiency by Production Line by Date
Efficiency is the ratio of standard hours earned by completing units to the total number of hours worked. When efficiency concerns arise, a single data point may not show any issues, and a three-month window may be too complex to analyze easily. This visual shows efficiency by production line in 13 weekly buckets so that managers and planners can analyze the jobs that ran in a week, or determine if other circumstances may have unduly affected efficiency. For example, a heatwave might adversely affect efficiency by causing workers to operate more slowly, or a customer emergency might have caused unplanned short-term changes in schedules.
Utilization by Production Line by Date
Like the efficiency by production line visual, this chart shows utilization by production line, helping managers and planners to identify issues that affected utilization in a week. Utilization is the actual time a production line was in use divided by the available time, multiplied by 100. If a production line runs at or near 100% utilization, that production line may be a bottleneck. If it runs low, the company can theoretically increase output without adding more equipment. One reason for poor utilization might be unplanned downtime, which suggests that the preventive maintenance program needs to be reviewed. Another might be lack of skilled operators to run the equipment, which might suggest that the workforce needs cross-training. Or it could point to a product mix problem, which points to market trends.
Productivity Factor by Production Line by Date
The productivity factor is calculated by multiplying utilization by efficiency. Downward productivity trends may help identify emerging problems in production, or if the trend is positive, they may signify process improvements have had the desired effect.
The Value of the Operations Efficiency and Utilization by Production Line Action Center
Understanding the results of utilization, efficiency and productivity metrics can help keep operations on an even keel by identifying emerging issues before they become severe enough to have an adverse effect on schedules. Knowing these metrics helps improve the accuracy of promise dates, keeps bottleneck operations operating at peak levels and provides an early warning of potential issues or emerging cost problems. Because the factors that go into these metrics have such an impact on the company, it is imperative that manufacturers keep a close eye on them. The Operations Efficiency and Utilization by Production Line Action Center makes monitoring these metrics quick and easy.
Which KPIs and metrics are most important to your organization? Learn more about QAD’s predefined Action Centers as well as best practices for each.