Align metrics throughout your plant

Plant managers must pay attention to the business side of manufacturing.

By Bob Vavra, CFE Media August 20, 2018
If running a manufacturing plant was nothing more than raw materials in and products out, it still would be a challenging, dynamic occupation. Plant managers know it’s much more complicated than that, of course, and Plant Engineering’s annual Salary Survey noted their own compensation for plant leaders is partially influenced by plant profitability. So paying attention to the bottom line and the production line is part of the job. 
Setting performance metrics is important for any business, but making sure those metrics are aligned throughout the organization is essential, noted Brad Staats of Ultra Consultants. In one organization his company studied that had a 12-week lead-time product, “The key metric was ship-on-time. This sounds great, but when the last division of several operations received the order 6 weeks late due to upstream process failures, it was a meaningless metric to those involved. They could do nothing to affect the metric,” Staats said. “Instead, by instituting a cycle time metric where time spent in front of each operation was measured, they were able to reduce the total cycle time of the division. Cycle time was something everyone understood and knew how to affect.”
They key to aligning your team? Staats said, “When developing manufacturing performance metrics, it is important to create metrics that are easy to understand and individuals can easily implement.”

Bob Vavra, content manager at CFE Media,