Measuring manufacturing performance via key performance indicators and metrics is a good way for decision-makers to monitor business and production processes. This might sound time-consuming, but enhanced reporting software automates most of your statistical work and generates detailed data reports with actionable insights.

Despite much progress, the world continues to face challenges from the COVID-19 pandemic. As a result, both small businesses and large corporations have seen massive changes to their operations. Reporting metrics are more important than ever.

A McKinsey survey reports that ninety-seven percent (97%) of respondents have significantly changed their business processes to cope with supply chain challenges. More than ever, business leaders and stakeholders need to ensure their operations are as effective as possible.

“[T]he most useful metrics align with and balance corporate priorities. They can be measured accurately, and benchmarked against both internal goals and competitor performance. Good metrics illustrate to staff and management a cause and effect—how their actions meet a business need—while helping to cultivate the right activities and behaviors across the organization.”

Bain and Company

5 KPI Metrics to Improve Production Efficiency

1. Mean Time To Repair

Mean Time To Repair (MTTR) is a maintenance metric that measures the average time spent on maintenance activities. These maintenance activities include getting an asset up and running, including notifying a technician, diagnosing a problem, fixing the asset, and recovering assets. Even time spent looking for spare parts, waiting for equipment to cool down, and testing the repaired assets are factored into MTTR calculations. 

As with most reporting metrics, your ideal MTTR will depend on various factors. These factors include asset type, the nature of your industry, and the size of your operations. However, experts recommend an MTTR of less than 5 hours per equipment failure.

Importantly, the MTTR metric is concerned mainly with unplanned downtime. Therefore, you can calculate MTTR by dividing the total time spent on repairs by the total number of repairs within a set period. 

MTTR = Total Maintenance Time / Number of Repairs

For example, say a team has spent 25 hours on maintenance for a particular asset in one year. Let’s also assume this asset has broken down five times within the year. The MTTR for this particular asset works out as 25 hours / 5 breakdowns = 5 hours.

You could use MTTR to determine if this particular asset in its current condition is worth the hours spent repairing it or if it’s time to replace it. 

Likewise, calculating MTTR will provide valuable benchmarks against which to measure all of your maintenance activities. For example, you can pull MTTR reports to optimize the following:

• Inventory Planning: Knowing how much time your team spends searching for spare parts will help you plan better for stocking up inventory.
• Maintenance Scheduling: Team leads and project managers often need to prioritize maintenance efforts. Knowing your MTTR is out of the optimum range can enable better preventive maintenance planning.
• Maintenance Decision-Making: Sometimes, repairing assets with high MTTR isn’t worth it. With this metric, you can decide which assets to replace.

“KPIs should be an ongoing discussion and may change over time as routines become set. Just like an athlete reviews their statistics and progress after each training, your employees need to evaluate and review their metrics regularly. The manager needs to provide regular feedback about their progress, assess what is (or isn’t) going well and share thoughts and ideas for improvement.”

Forbes

2. Mean Time Between Failure

Mean Time Between Failure (MTBF) is a maintenance metric that measures the average time between breakdowns for a particular asset under normal operational usage. While this may be obvious, but to apply MTBF to an asset, the asset must be repairable. This reporting metric provides managers with an understanding of each asset’s uptime between failure states.

Your teams may count failure as an instance of downtime (for example, shutting down a machine for refueling). Importantly, others may count breakdowns as failures. Management needs to decide how to count downtime.

Whatever the case, the MTBF metric is calculated by adding up the total amount of time between one failure and another and dividing the sum by the total number of failures within a set period.

MTBF = Total Uptime of Repairable Asset / Number of Failures

For example, say a machine runs for 50 hours and breaks down five times. The machine’s MTBF would be 10 hours. However, five breakdowns for one asset within 50 hours is exceedingly high and would likely indicate deeper problems to address.

One of the benefits of calculating MTBF is that it can indicate how efficient your maintenance activities are. Or, it may mean you need to carry out root cause analysis because the problem isn’t just due to the machine in question. 

Generally, you’ll want your MTBF to be a high number. MTBF can help you with the following:

• Optimize your maintenance schedules
• Know which assets to replace
• Know when to carry out root cause analysis

3. Overall Equipment Effectiveness

Overall Equipment Effectiveness (OEE) is a maintenance metric that measures the productivity of a facility’s assets. Consequently, OEE provides insight into how your operations and processes maximize your assets. To measure your OEE, consider three main factors: asset availability, asset performance, and product quality. 

OEE = Asset Availability x Asset Performance x Product Quality

Asset availability measures the amount of time assets are available for production. This metric depends on how frequently you have planned and unplanned downtime. A world-class availability rating is 90%. This rating means your assets are down 10% of your total production time. The formula to calculate asset availability is: 

Asset Availability = Run Time / Planned Production Time x 100

Asset performance measures how well your production cycles run. It is an efficiency metric that measures production speed and any possible interruptions. A 95% rating places you within world-best standards. To calculate asset performance: 

Asset Performance = Planned Production Time / Actual Production Time x 100

The last factor is product quality. This metric measures the quality of goods you produce. You should account for defects in the final products. Obviously, low product quality will affect your OEE and customer satisfaction. To calculate product quality:

Product Quality = Number of Good Products / Total Number of Products x 100. 

4. Scheduled Maintenance Critical Percentage

Scheduled Maintenance Critical Percentage (SMCP) is a maintenance metric that measures how late your maintenance activities are relative to how frequently they occur. As a result, you can use SMCP to organize your maintenance schedules and prioritize maintenance initiatives. This reporting metric is calculated by: 

((Number of Days Overdue + Total Number of Days in Maintenance Cycle) / Total number of Days in Maintenance Cycle) x 100

Applying the formula:
SMCP for Maintenance Task A = (3+10) / 10 x 100 = 130%
SMCP for Maintenance Task B = (7+20) / 20 x 100 = 135%

Given that Task B has a higher SMCP, team members should prioritize that over Task A.

Accordingly, tracking your SMCP will help:

• Improve maintenance scheduling
• Make your audits easier
• Reduce reactive maintenance

5. Equipment Downtime

As you may have noticed from the metrics above, downtime is a fundamental metric to keep your eye on. Deloitte reports that manufacturers lose about $50 billion annually to downtime.

While a robust preventive maintenance strategy will help reduce your unplanned breakdowns, you may still experience downtime.

Tracking your equipment downtime will give you an idea of how much you’re losing in time and money. You’ll know which assets are malfunctioning and how often. You can study your past maintenance activities to see what works and needs improvement. On the whole, you can make better decisions about your maintenance. 

Calculate the total amount of revenue from the sale of products or services made during the equipment breakdown. Here’s an example:

• Company X produces 10 units an hour that sell for $50 apiece (10 x 50 = 500)
• The machine used to make the products breaks down for 4 hours. 
• The company will have lost $2,000 in profits during downtime. (500 x 4 = 2000)

Track your downtime to:

• Reduce waste
• Increase production efficiency
• Improve your bottom line

MaintainX is a Computerized Maintenance Management System (CMMS) that can help streamline your workflows and improve your data analytics and reporting capabilities. In addition to work order automation and real-time chat connectivity, MaintainX offers robust reporting tools to optimize your efficiency.

These tools include:

• Reporting dashboards
• Data visualization
• Integration with ERP data sources
• Work order statuses
• Work orders by priority
• Reporting filters