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Among the most important metrics and key performance indicators (KPIs) for manufacturing companies to track , those are the most important: 

• Overall equipment effectiveness (OEE)

• Downtime

• Yield, cost, and throughput

• Customer rejects

• Lead time to customer

• Inventory turns

• Maintenance metrics

Let’s get to know why they’re important to track, and how manufacturers can best handle KPIs and metrics in their facilities.

First, let’s define metrics and KPIs.
- Manufacturing metrics
A metric is any number your organization might track.
For example, Preventive maintenance (PM) schedule compliance may not tell you much about the company’s profitability as a whole, but it does provide insight into how your maintenance processes are going.

- Manufacturing KPIs
A key performance indicator (KPI), on the other hand, is a metric that provides insight into your organization’s performance as a whole.
Ideally, they’re linked with business goals.
For instance, a manufacturer striving for top customer satisfaction will likely use customer rejects and satisfaction as key indicators. However, PMP and other maintenance metrics will likely be less useful here.

Why manufacturers should track important metrics and KPIs?
As a lot of manufacturers have found that when they track the metrics and KPIs they’ve gained more advantages.
- More consistent product quality
- Improved maintenance practices
- Meet business objectives

Finally, KPI tracking helps manufacturers meet their business goals.
especially when the indicators chosen align with those goals.
Some of the most important KPIs and metrics that manufacturers should track include those detailed below.

• Overall Equipment Effectiveness:
  On its own, OEE can give companies a general look at how their production processes are doing.
  If OEE is starting to tank a little, it’s a sign that something is going wrong in one of the following areas:
  - Availability, which is how much time your equipment runs versus how long it’s supposed to run.
  - Performance, which is how efficient each machine is while it’s running.
  - Quality, which is the overall quality of the products produced (quality vs. rejects).
  

• Downtime:
  - Downtime and uptime are the heartbeats of a manufacturer.
  - When we understand where downtime occurs and why it happens, we can fix issues and shift a facility’s maintenance percentage away from reactive and emergency maintenance.
  - This all applies to planned downtime as well – sometimes equipment needs to be put down for routine maintenance, which is an important thing to track.

• Yield, Cost, and Throughput:
  - One particular important facet of this is throughput, which measures the amount of product created over a specific period of time.
  - When we measure throughput, we can understand how specific assets perform, as well as which assets underperform (diagnosing areas for maintenance).
  

• Customer Rejects:
  - One key customer metric is customer rejects, which involves the number of products that are poorly reviewed or returned by the customer for a refund/replacement.
  - Ultimately, these products are either dead in the water - or, they require significant financial and time commitment to rework, quantifying them as a form of waste. Too many rejects indicates problems somewhere in the manufacturing process.
  

• Lead Time to Customer:
  Lead time to customer is calculated from these metrics:
  - Order processing lead time, or how long it takes to process a customer’s order.
  - Production lead time, which is how long it takes you to produce the items ordered.
  - Delivery lead time, or the time that quality control and shipping take.

• Inventory turns:
  - It was actually one of the six metrics used in the University of Tennessee’s “Six Metric Areas to Best Practices” initiative in 2015.
  - If your inventory turns over more quickly than you can produce an item, that may be a sign that you’ll need to improve productivity in some way.
  - On the other hand, if it’s too low, then you might be holding on to the product too long and spending more on housing it than you need to.
  

• Maintenance metrics:
  - These metrics provide extra information on why KPIs may suffer at any given point.
  - While they may not always have a ton of direct relevance at the executive level of the company, they do give the insight needed to make improvements to maintenance practices.

Some of the most important maintenance metrics to track include:
- Percentage of reactive maintenance versus the amount of preventative maintenance.
- Maintenance cost as a percentage of replacement asset value (RAV).
- Mean time between failures (MTBF), or the average amount of time between equipment failures.

Each of these metrics gives manufacturers insight into how their maintenance practices are holding up.
If these metrics start falling short, then either they might have inefficiencies in their equipment maintenance processes, or their practices aren’t actually in the best interests of their equipment health.

How to choose the right KPIs for your company?
The answer will be in the next part

To be continued ..