How To Determine Productivity Indicators?

Productivity Indicators

Why productivity indicators are an important thing. To successfully position themselves in a rapidly changing industry, business leaders are required to closely monitor the functioning of their business. Production indicators are thus parameters to be followed regularly in order to provide the necessary interventions maintaining the competitiveness of the company.

Here are 5 production indicators that must be known and followed :

The cost of stopping production

The cost of stopping production varies depending on the machine that is affected by the failure. If it is a bottleneck machine, a stop would directly affect production. In fact, stopping a bottleneck machine causes productivity indicators to stop and direct loss of sales. It should not be forgotten that at this cost we add the maintenance costs.

In the case of a non-bobbler machine, a stop results in a slight disruption of production, since a failure on this type of machine is theoretically recoverable by starting a replacement machine. Thus, always theoretically, the only costs that apply when stopping a non-bobbler machine are maintenance costs.

In general, stopping the production of a chain directly results in a loss of sale and therefore of profitability. It is for this reason that it makes sense to put in place action plans to make up for any delay in delivery caused by a stop.

The overall rate of return

The overall rate of return (TRG) is a parameter that calculates the efficiency of machines. It is obtained by several formulas :

  • TRG = TRS (Synthetic yield rate) x load rate.

Load rate: this is the working time divided by the opening time of the workshop.

  • TRG = running rate (percentage of working time during which the machine has operated) x efficiency rate (effective time divided by running time) x compliant product rate (ratio of compliant parts from the first hit on the total number of pieces).

TRS (synthetic rate of return)

This parameter makes it possible to follow the rate of use of the machines in order to set up the necessary optimizations. This is a business-specific parameter that varies over time to indicate production losses.

It is calculated by the following formula :

TRS = actual production / theoretical maximum production.

Unused production capacity

This indicator allows the company to estimate its production potential and theoretical performance. In fact, this parameter makes it possible to assess the non-use of the company’s maximum production capacities. Here is the formula :

Unused production capacity = standard volume available – actual volume produced during a well-defined period.

The average duration of the production cycle is an indicator of great importance in the assessment of the company’s production capacities. It assesses, in fact, the cycle which extends between the production order until the finish of the order. Here is the formula to calculate it :

Average duration of the production cycle = sum of the duration of the production cycle / number of orders planned.

What solution to help you reach your Productivity Indicators ?

The implementation of a solution of digital work instructions allows operators to make good the first time. This reduces non-quality and therefore increases the overall performance of the business.

The digital work instructions also make it possible to restore autonomy to operators to trace production data. These same data must feed into the continuous improvement processes of the company :

  • Detect deviations upstream
  • React faster thanks to the right data
  • Establish action plans

Do you want a demonstration of digital work instruction software ? Contact us now.

Read Also : The Skills and Knowledge Required of Finance Leaders

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