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Key Performance Indicators for Manufacturing Market Leaders

Posted by IBS America on Jun 19, 2012 @ 08:52 AM

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After speaking at our 2012 Executive Warranty Forum this April, LNS Research principal analyst Matt Littlefield spoke about current trends in manufacturing, as well as key performance indicators of manufacturing market leaders. Based on his thoroughly researched and informative presentation to Forum attendees, we put together some highlights on KPI's for manufacturing market leaders to help you see how your organization stacks up.

Does your manufacturing organization meet "market leader" standards? How do your company's best-practices stack up against your competitors, or against other market leaders in your space?

Manufacturing market leaders can be identified in today's market place with key performance indicators. Some of these KPI's include successful New Product Introductions: (Time, Volume, and Quality), On-Time and Complete Shipments: (Quality issues can impact delivery), Overall Equipment Effectiveness: (Availability, Productivity, and Quality), Finished Product Quality, Warranty Claim Rates, and Warranty Reserve and Accrual Rates.

If you were to segment these key performance indicators into just three generic buckets, one could argue they would be Leadership, Business Process, and Technology. Let's examine some of the characteristics of each, and take a look at how your organization may or may not fall within "Market Leader" status.

1) LEADERSHIP

  • Operational Excellence is an executive priority.
  • There must be belief that Operational Excellence can positively impact quality, reliability, and warranty management
  • Open channels of communication and collaboration exist across different value chain roles in organizations
  • Open channels of communication and collaboration exist between trading partners
  • All levels of organization have “buy in” for operational excellence initiatives

2) BUSINESS PROCESSES

Flexible and standardized business processes connect disparate departments across the enterprise. Business process control tools are used across the value chain for market leaders, including the ability to:

manufacturing software

  • Model
  • Visualize
  • Automate
  • Optimize
  • Continuously Improve

Business process automation also builds in the following capabilities for these organizations:

  • Collaboration
  • Alerting
  • Reporting and Analytics

3) THE CONNECTED VALUE CHAIN

This is a typical representation of business processes in manufacturing industry. The challenge companies face is achieving a balance between the services and management necessary, such as Quality Management vs Reliability, or Manufacturing Operations Management vs Service Management.

Manufacturing Software Technology can substantially help standardize and harmonize disparate functional area systems from across an organization. This software also provides bi-directional information between functional areas and the enterprise, and acts as a hub to create interoperability between functional areas.

RECOMMENDATIONS

If you want your organization to be a market leader, you must understand how macro-trends in manufacturing will impact your business and strategic objectives in the future, in regards to Globalization, Supplier Relationships, and Product Complexity. Build a model for Integrated Operational Excellence that connects quality, reliability, and warranty management.

Culture and Management Systems matter, so be sure to integrate these concepts throughout your organization, with the right People, Process, and Technology. You should identify the right metrics and business capabilities to move the dial in specific areas of the value chain. Be sure to also focus on maturity and depth of expertise in the right functional areas as well as the ability to orchestrate business process across the value chain, via Product Development, Manufacturing Operations Management, Supply Chain Management, Service Management, and Quality Management Systems.

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Manufacturing productivity with QSYSNeed help delivering the right products at the right time, price and quality? Download the Complete QSYS Manufacturing Software Brochure and see how to:

  • Increase quality throughout the entire product life cycle
  • Optimize your business processes.
  • Minimize complexity and cost.
  • Centralize all your quality assurance management activities.
  • Manage processes for communication & documentation.

Topics: Warranty Management, Quality Management Systems, Process Control, Manufacturing Software, Supply Chain Management

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