{"id":154,"date":"2025-11-29T04:00:00","date_gmt":"2025-11-29T04:00:00","guid":{"rendered":"https:\/\/www.mrpeasy.com\/blog\/?p=154"},"modified":"2026-03-27T09:21:07","modified_gmt":"2026-03-27T09:21:07","slug":"manufacturing-performance-indicator","status":"publish","type":"post","link":"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/","title":{"rendered":"Top 10 Manufacturing KPIs in 2026"},"content":{"rendered":"\n<p>The goal of every manufacturing business is to be as efficient as possible. But without being able to accurately gauge your efficiency, it is hard to know where you stand and what goals to set. Here is where manufacturing KPIs come into play.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"571\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/Manufacturing-kpis-metrics-1024x571.jpg\" alt=\"\" class=\"wp-image-8872\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/Manufacturing-kpis-metrics-1024x571.jpg 1024w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/Manufacturing-kpis-metrics-300x167.jpg 300w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/Manufacturing-kpis-metrics-768x428.jpg 768w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/Manufacturing-kpis-metrics.jpg 1502w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<!--more-->\n\n\n\n<p><em>You can also listen to this article:<\/em><\/p>\n\n\n\n<figure><iframe loading=\"lazy\" height=\"150\" width=\"100%\" src=\"https:\/\/www.podbean.com\/player-v2\/?i=ndpxw-118c948-pb&amp;from=pb6admin&amp;share=1&amp;download=1&amp;rtl=0&amp;fonts=Arial&amp;skin=1&amp;font-color=&amp;btn-skin=3\"><\/iframe><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_80 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #343333;color:#343333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #343333;color:#343333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#What_is_a_manufacturing_KPI\" >What is a manufacturing KPI?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Selecting_the_right_manufacturing_KPIs\" >Selecting the right manufacturing KPIs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#How_to_use_manufacturing_KPIs\" >How to use manufacturing KPIs?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Top_10_most_important_manufacturing_KPIs\" >Top 10 most important manufacturing KPIs<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Overall_Equipment_Effectiveness_OEE\" >Overall Equipment Effectiveness (OEE)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Work-in-process_WIP\" >Work-in-process (WIP)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Lead_Time_LT\" >Lead Time (LT)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#On-time-in-full_OTIF\" >On-time-in-full (OTIF)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Cost_per_Unit_CPU\" >Cost per Unit (CPU)<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Yield_or_First_Time_Through\" >Yield or\nFirst Time Through<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Production_Downtime\" >Production Downtime<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Inventory_Turnover_Ratio\" >Inventory Turnover Ratio<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Production_Schedule_Attainment\" >Production Schedule Attainment<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Supplier_OTIF\" >Supplier OTIF<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-performance-indicator\/#Key_takeaways\" >Key takeaways<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_is_a_manufacturing_KPI\"><\/span>What is a manufacturing KPI?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Manufacturing KPIs or Key Performance Indicators are metrics that are tracked in order to understand the efficiency of various vital functions within a manufacturing company.<\/p>\n\n\n\n<p>Even though all KPIs are metrics, not all metrics get to be KPIs. The difference between the two lies in their purpose. While both are quantifiable measures of performance in one area or another, the term \u201cmetrics\u201d encompasses every single value you can measure. KPIs or Key Performance Indicators, however, are related to specific business goals you have set, making these metrics key indicators of success or failure. <\/p>\n\n\n\n<p>Tracking a huge number of metrics without really thinking\nabout their value to your business is therefore mostly a waste of time. Setting\ncertain goals and tying them to metrics, however, is a surefire way to\naccurately measure your progress and improve the processes in question.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Selecting_the_right_manufacturing_KPIs\"><\/span>Selecting the right manufacturing KPIs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>There is a reason why KPIs are \u201cKey\u201d Performance Indicators.\nAlthough you can use any type of metric to gauge any kind of performance, KPIs\nare those that matter the most. And what is important to companies may vary\ngreatly depending on the sector they operate in.<\/p>\n\n\n\n<p>Generally, a company should not track more than ten manufacturing KPIs in order not to overly complicate matters. These ten metrics should then reflect different areas of the business: manufacturing efficiency, customer satisfaction, lead times, etc.<\/p>\n\n\n\n<p>Every company has to determine its KPIs according to the nature of its business, but each of those metrics needs to meet a set of criteria for them to turn out useful. <\/p>\n\n\n\n<p>A good manufacturing KPI:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Reflects strategic goals.<\/strong> Before you select a KPI to track, you need to know what you want to achieve. After setting a target, the KPI should help measure your advancement toward that goal.<\/li>\n\n\n\n<li><strong>Is quantifiable and measurable<\/strong>. As already said, there is no way to track your progress when there is no concrete way to measure it. Goals need to be as specific as possible for the KPIs to bring value to the business.<\/li>\n\n\n\n<li><strong>Is attainable and actionable.<\/strong> There is no sense in setting unattainable goals just as there is no sense in tracking vanity metrics that do not actually reflect the state of your business.<\/li>\n<\/ol>\n\n\n<div class=\"banner-v2\">\n    <p class=\"banner-v2__desc\">Easily track manufacturing KPIs with MRPeasy<\/p>\n    <a class=\"banner-v2__link\" href=\"https:\/\/www.mrpeasy.com\/sign-up\/\" target=\"_blank\" data-ga-event=\"blog_signup_banner_blue\">Try for free<\/a>\n<\/div>\t\t<style>.banner-v2 {\n    float: right;\n    display: flex;\n    flex-direction: column;\n    justify-content: center;\n    align-items: center;\n    padding: 40px 32px;\n    gap: 16px;\n    width: 356px;\n    height: 205px;\n    background: linear-gradient(199.68deg, #6084E5 13.17%, #5FA7DD 82.1%);\n    border-radius: 4px;\n    margin-left: 12px;\n    margin-bottom: 12px;\n    margin-top: 15px;\n}\n\n@media (max-width: 767.98px) {\n    .banner-v2 {\n         width: 100%;\n         height: 173px;\n         margin-bottom: 0;\n         margin-left: 0;\n    }\n}\n\n.single__content p.banner-v2__desc {\n    margin: 0 !important;\n}\n\np.banner-v2__desc {\n    width: 292px;\n    font-style: normal;\n    font-weight: 700;\n    font-size: 22px;\n    line-height: 29px !important;\n    text-align: center;\n    color: #FFFFFF;\n    margin: 0 !important;\n    order: 0 !important;\n}\n\n.single__content a.banner-v2__link {\n    color: #FFFFFF !important;\n}\n\n.single__content a.banner-v2__link:hover {\n    color: #003557 !important;\n}\n\na.banner-v2__link {\n    display: flex;\n    justify-content: center;\n    align-items: center;\n    width: 181px;\n    height: 51px;\n    padding: 18px 0;\n    border-radius: 4px;\n    background: #003557;\n    font-weight: 700;\n    font-size: 16px;\n    color: #FFFFFF !important;\n    text-decoration: none !important;\n    order: 1 !important;\n}\n\n.banner-v2__link:hover {\n    background: white;\n    color: #003557 !important;\n}<\/style>\n\t\t\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_use_manufacturing_KPIs\"><\/span>How to use manufacturing KPIs?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>With good manufacturing KPIs in place, you can make better use of <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.mrpeasy.com\/blog\/production-capacity\/\" target=\"_blank\">production capacity<\/a>, increase productivity, improve product quality, improve delivery times, minimize waste, and control costs.<\/p>\n\n\n\n<p>But it is also important to know that manufacturing KPIs might constantly change. Some metrics are more important during one period of company development and when this period ends, others become more important.<\/p>\n\n\n\n<p>For example, for a new manufacturing operation, it is important how fast it can ramp up production volumes and keep the momentum going. Then, in the case of an increased number of customer complaints, the manufacturer has to pay extra attention to the quality of the products and the yield.<\/p>\n\n\n\n<p>It is therefore necessary to periodically review the manufacturing KPIs that your business tracks to ensure improvements are made where they are most needed.<\/p>\n\n\n\n<p>In any case, every KPI follows an iterative process to improve processes and reach business goals:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>Measure the KPI;<\/li>\n\n\n\n<li>Find where performance losses occur over time;<\/li>\n\n\n\n<li>Find the root cause of the problem;<\/li>\n\n\n\n<li>Address the issue;<\/li>\n\n\n\n<li>Re-measure the KPI.<\/li>\n<\/ol>\n\n\n\n<p>As an additional consideration, note that some of the terms used to define each KPI in this article may vary depending on the author and the particular use within each organization.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Top_10_most_important_manufacturing_KPIs\"><\/span>Top 10 most important manufacturing KPIs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Even though manufacturers should also keep an eye on\nuniversal KPIs like sales revenue, net profit margin, etc., being in the\nproduction business also requires tracking specific manufacturing KPIs. Here\nare some of the most important manufacturing KPIs.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Overall_Equipment_Effectiveness_OEE\"><\/span>Overall Equipment Effectiveness (OEE)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><a href=\"https:\/\/www.mrpeasy.com\/blog\/overall-equipment-effectiveness\/\" target=\"_blank\" rel=\"noreferrer noopener\">The Overall Equipment Effectiveness (OEE)<\/a> is a key performance indicator that enables the production centers to monitor and improve the productivity of a machine or a production line. There are many ways to determine the OEE, one of which is to break down availability, performance, and quality. The OEE has the following formula:<\/p>\n\n\n\n<p><strong>OEE = Availability x\nPerformance x Quality<\/strong><\/p>\n\n\n\n<p>This means it measures the percentage of time that a machine\nor production line produces good quality articles during the scheduled time.<\/p>\n\n\n\n<p><em>Example:<\/em> A machine\nwas planned to run from 6:00 a.m. to 2:00 p.m. (8 hours) and the standard\nproduction rate is 100 units\/hour. Suppose there were 30 minutes of machine\ndowntime, and during that 8 hours 700 units were produced, for which only 640\nwere of adequate quality.<\/p>\n\n\n\n<p>To determine the OEE, we will\nproceed as follows:<\/p>\n\n\n\n<p><strong>Availability = (8 h \u2013 0.5 h) \/ 8 h x 100% = 93.75%<\/strong><\/p>\n\n\n\n<p><strong>Performance = 700 units \/ (7.5 x 100 units) x 100% = 93.33%<\/strong><\/p>\n\n\n\n<p><strong>Quality = 640 units \/ 700 units x 100% = 91.42%<\/strong><\/p>\n\n\n\n<p><strong>OEE = 93.75% x 93.33% x 91.42% = 80%<\/strong><\/p>\n\n\n\n<p>Overall Equipment Effectiveness shows the value-added time\nand highlights the losses. The losses can be defined as the activity that does\nnot add value to the product. There are many categories to classify the losses:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Machine breakdown<\/li>\n\n\n\n<li>Employee breaks<\/li>\n\n\n\n<li>Setup time<\/li>\n\n\n\n<li>Shortstops<\/li>\n\n\n\n<li>Speed loss<\/li>\n\n\n\n<li>Scrap or quality defect<\/li>\n<\/ul>\n\n\n\n<p>Every operational team should measure and highlight the\noperational losses and implement countermeasures to increase the OEE.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-oee.jpg\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"250\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-oee-e1638262446714-1024x250.jpg\" alt=\"manufacturing-kpis-oee\" class=\"wp-image-8876\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-oee-e1638262446714.jpg 1024w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-oee-e1638262446714-300x73.jpg 300w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-oee-e1638262446714-768x188.jpg 768w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong>Some ERP\/MRP systems automatically calculate OEE and turn the data into visual statistics.<\/strong><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Work-in-process_WIP\"><\/span>Work-in-process (WIP)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The&nbsp;Work-in-process (WIP)&nbsp;is a key performance indicator that measures the value of\nraw materials or subassemblies that have entered the manufacturing process,\nbefore obtaining the finished good.<\/p>\n\n\n\n<p>There are two main groups:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Waiting to be processed<\/li>\n\n\n\n<li>Being processed<\/li>\n<\/ul>\n\n\n\n<p>The WIP has the following formula:<\/p>\n\n\n\n<p><strong>WIP =\nManufacturing Lead Time x Production Flow Value<\/strong><\/p>\n\n\n\n<p>Let\u2019s say that a work center takes 5\nhours to finish a batch and the production flow rate is in average 100 kg\/h at\na cost of $1\/kg, the WIP will be:<\/p>\n\n\n\n<p><strong>WIP =&nbsp;5\nhours x (100 kg\/h x 1 $\/kg) = 500$<\/strong><\/p>\n\n\n\n<p>This means that there is $500 of\nmaterial in that work center. Following the two main categories, it may be that\nthis material is on any machine or waiting to be used.<\/p>\n\n\n\n<p>Work-in-process inventory depends on the manufacturing lead time and <a href=\"https:\/\/www.mrpeasy.com\/blog\/total-manufacturing-cost\/\" target=\"_blank\" rel=\"noreferrer noopener\">manufacturing costs<\/a>, the number of orders in process, and the batch sizes. Further analysis will be required by the operational team to determine any way of performance improvement. Among others, such improvement may result in:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>reduction of the manufacturing cost<\/li>\n\n\n\n<li>reduction of the manufacturing lead time<\/li>\n\n\n\n<li>optimization of the batch sizes<\/li>\n\n\n\n<li>optimization of the labor<\/li>\n\n\n\n<li>increase of space on the shop floor<\/li>\n\n\n\n<li>enhancement of the transition between the work\n     centers<\/li>\n<\/ul>\n\n\n\n<p><em>Read more about <a href=\"https:\/\/www.mrpeasy.com\/blog\/work-in-process-inventory-accounting\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Work in Process Inventory (WIP<\/a>).<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Lead_Time_LT\"><\/span>Lead Time (LT)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Lead time, also called order cycle time, is an essential KPI for all businesses dealing with the manufacture and sale of products. It gives you an idea of how well your company processes orders and how quickly customer needs are fulfilled. It is the time it takes to fulfill an order from when it is confirmed until the order is delivered in full.<\/p>\n\n\n\n<p>Long lead times can indicate that there are inefficiencies in your business process that cause bottlenecks and rack up unnecessary costs. Short lead times are always ideal because that means there are no obstructions in the process and you can respond to customer needs quickly and efficiently.<\/p>\n\n\n\n<p>The total lead time can be broken down into smaller parts:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Production lead time is the time the manufacture\nof a product takes from when production starts until it finishes.<\/li>\n\n\n\n<li>Delivery lead time is the time it takes to\ndeliver a product to a customer from stock.<\/li>\n\n\n\n<li>Material lead time is the time it takes for\nsuppliers to deliver goods to the manufacturer.<\/li>\n<\/ul>\n\n\n\n<p>By breaking down the lead time, you can more accurately\npinpoint where the inefficiencies in the process occur.<\/p>\n\n\n\n<p><em>Read more about <a href=\"https:\/\/www.mrpeasy.com\/blog\/lead-time\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Lead Time<\/a>.<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"On-time-in-full_OTIF\"><\/span>On-time-in-full (OTIF)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The On Time In Full or OTIF is the key performance indicator that measures the number of orders which had been delivered with the right quality and the right quantity on time to the customer. To get the shape of a ratio, it is compared to the total amount of orders.<\/p>\n\n\n\n<p>The OTIF has the following formula:<\/p>\n\n\n\n<p><strong>OTIF = Number\nof perfect orders \/ Total number of orders<\/strong><\/p>\n\n\n\n<p>Let\u2019s assume that an organization has\ncurrently 100 orders for delivery today, but:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>4 orders have not reached the quantity\n     required by the customer<\/li>\n\n\n\n<li>3 orders exceed the quantity required by the\n     customer<\/li>\n\n\n\n<li>2 orders contain defective products<\/li>\n\n\n\n<li>1 order arrived late<\/li>\n<\/ul>\n\n\n\n<p>Then the OTIF on that day will be:<\/p>\n\n\n\n<p><strong>OTIF = [100 &#8211;\n(4 + 3 + 2 + 1)] \/ 100 orders = 0.9 = 90%<\/strong><\/p>\n\n\n\n<p>On Time in Full is a strict KPI that measures the service level of an organization and it involves many functions (commercial, logistics, production, purchasing, etc.). On the other hand, every organization must define the tolerances involved with product defects, quantities per order, and late arrival.<\/p>\n\n\n\n<p>By breaking down the losses, it can\nhighlight:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Delays within the supply chain<\/li>\n\n\n\n<li>Product defects<\/li>\n\n\n\n<li>Shipments with different quantities to the sales order<\/li>\n<\/ul>\n\n\n\n<p><em>Read more about <a href=\"https:\/\/www.mrpeasy.com\/blog\/on-time-in-full-otif\/\" target=\"_blank\" rel=\"noreferrer noopener\">On-Time, In-Full<\/a><\/em><\/p>\n\n\n<div class=\"banner-v1\">\n    <div class=\"banner__text\">\n        <div class=\"banner-v1__title\">Gain easy insight into your production efficiency<\/div>\n        <div class=\"banner-v1__desc\">MRPeasy gives you access to automatically compiled KPI statistics and reports to help you improve your processes.<\/div>\n        <div><a class=\"banner-v1__link\" href=\"https:\/\/www.mrpeasy.com\/sign-up\/\" target=\"_blank\" data-ga-event=\"blog_signup_banner_white\">Try for free<\/a><\/div>\n    <\/div>\n    <div class=\"banner__img\">\n        <img decoding=\"async\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/themes\/mrpeasy\/assets\/images\/banner.svg\" alt=\"banner\">\n    <\/div>\n<\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Cost_per_Unit_CPU\"><\/span>Cost per Unit (CPU)<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The <a href=\"https:\/\/www.mrpeasy.com\/blog\/cost-per-unit\/\" target=\"_blank\" rel=\"noreferrer noopener\">cost per unit<\/a> (CPU) is a powerful key performance indicator that helps a manufacturing system to optimize the cost of the products. It also helps to offer competitive prices in the market and increase the profit of the company.<\/p>\n\n\n\n<p>The CPU has the following formula:<\/p>\n\n\n\n<p><strong>CPU = (Direct\nMaterial Costs + Direct Labor Costs + Manufacturing Overhead) \/ Total units\nproduced<\/strong><\/p>\n\n\n\n<p>To give a simple example, let\u2019s assume\nan organization that manufactures 1000 units of a product with the following\ncost breakdown:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Direct Material \u2013 $3000<\/li>\n\n\n\n<li>Direct labor \u2013 $2000<\/li>\n\n\n\n<li>Manufacturing Overhead (MOH) \u2013 $1000<\/li>\n<\/ul>\n\n\n\n<p>The CPU will therefore be:<\/p>\n\n\n\n<p><strong>CPU = (3000 +\n2000 + 1000) \/ 1000 = 6 $\/unit<\/strong><\/p>\n\n\n\n<p>There are different methodologies to allocate <a href=\"https:\/\/www.mrpeasy.com\/blog\/manufacturing-overhead\/\" target=\"_blank\" rel=\"noreferrer noopener\">manufacturing overhead<\/a> when a company produces a mix of products. The methodologies can be standard cost, direct cost, activity-based cost, etc.<\/p>\n\n\n\n<p>It is very important to define the\ncorrect allocation methodology. It will help to define how profitable or not a\nproduct is and set the price by adding the markup to the total product cost.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-metrics-CPU.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"429\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-metrics-CPU-1024x429.png\" alt=\"manufacturing-kpis-metrics-CPU\" class=\"wp-image-8874\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-metrics-CPU-1024x429.png 1024w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-metrics-CPU-300x126.png 300w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-metrics-CPU-768x322.png 768w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/11\/manufacturing-kpis-metrics-CPU.png 1146w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong>You can have an overview of the Cost per Unit as well as other metrics in some ERP\/MRP systems.<\/strong><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Yield_or_First_Time_Through\"><\/span>Yield or\nFirst Time Through<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The first time yield (<strong>FTY<\/strong>) or first time through (<strong>FTT<\/strong>) key performance indicator measures <a href=\"https:\/\/www.mrpeasy.com\/blog\/production-efficiency\/\" target=\"_blank\" rel=\"noreferrer noopener\">production efficiency<\/a> and quality. FTT, or Yield, reflects the number of units produced without defects or additional improvements against the total number of produced items.<\/p>\n\n\n\n<p>The formula to calculate this metric\nis simple: <\/p>\n\n\n\n<p><strong>FTT = (Total\nItems Produced \u2013 Defective Items) \/ Items Produced<\/strong><\/p>\n\n\n\n<p>For example, if 5 out of 250\nmanufactured units were defective, then the FTT would be:<\/p>\n\n\n\n<p><strong>FTT = (250 \u2013\n5) \/ 250 = 0.98 = 98%<\/strong><\/p>\n\n\n\n<p>Any units that do not meet the quality standards after the production process are considered to be defective items. FTT is usually higher when the production process is not fully set up or when it is done manually.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Production_Downtime\"><\/span>Production Downtime<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong><a href=\"https:\/\/www.mrpeasy.com\/blog\/production-downtime\/\" target=\"_blank\" rel=\"noreferrer noopener\">Production downtime<\/a><\/strong>&nbsp;is a period when the manufacturing process is on hold and no products are produced. Terms such as idle time, downtime, or off-line period usually relate to the same KPI.<\/p>\n\n\n\n<p>Usually, this manufacturing KPI shows a ratio of downtime to operating time and is directly related to the availability of assets for production.<\/p>\n\n\n\n<p>Downtime is a critical metric since if for some reason no goods are being produced, a loss will be incurred. There might be various reasons why the whole production is at a stop, beginning with human factors or mistakes, and ending with broken equipment. It is also a good practice to record the reasons for downtime and try to reduce them in the future.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Inventory_Turnover_Ratio\"><\/span>Inventory Turnover Ratio<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Extra inventory means tying up valuable resources. The main idea of manufacturing is to use its space for production, not for storing extra materials and components. The higher the inventory turnover rate is, the more efficiently the supply chain is built. <\/p>\n\n\n\n<p>The inventory turnover ratio\nformula is:<\/p>\n\n\n\n<p><strong>Inventory Turnover Ratio = COGS \/ Avg. Inventory<\/strong><\/p>\n\n\n\n<p>The targets depend largely on manufacturer-specific needs, but as a general rule, the turnover over 30 days could be considered as a long period. If inventory turnover is too high, it indicates inadequate inventory levels, which can cause missed business opportunities. When the ratio is low, it could mean low sales or overstocking, both of which can affect your profits. If sales are low, inventory is not bringing in revenue; if you are overstocking, you are tying up cash that could be used elsewhere in the business.<\/p>\n\n\n\n<p><em>Read more about the <a href=\"https:\/\/www.mrpeasy.com\/blog\/inventory-turnover-ratio\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">Inventory Turnover Ratio<\/a>.<\/em><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Production_Schedule_Attainment\"><\/span>Production Schedule Attainment<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>This manufacturing KPI reflects how well production is planned and how efficiently the production workers meet their targets. In manufacturing, planning plays an essential role. The more complex manufacturing processes are, the more important the ability to execute the plan becomes. But it also becomes more difficult. Creating accurate <a aria-label=\" (opens in a new tab)\" href=\"https:\/\/www.mrpeasy.com\/production-scheduling\/\" target=\"_blank\" rel=\"noreferrer noopener\">production schedules<\/a> to produce a certain amount of output according to the plan is very important if the manufacturer wants to meet the expectations of the customers and corporate strategy. This manufacturing KPI can be calculated like this:<\/p>\n\n\n\n<p><strong>Production Schedule\nAttainment = (Actual Output \/ Planned Output) x 100<\/strong><\/p>\n\n\n\n<p>For example, when a company plans to produce 4000 units in a\nmonth, but actually produces 3500, the PSA is:<\/p>\n\n\n\n<p><strong>PSA = (3500 \/ 4000) x\n100 = 87.5%<\/strong><\/p>\n\n\n\n<p>By using this KPI, you can set performance benchmarks,\nimprove MO completion time estimates, and increase delivery accuracy.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><a href=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/05\/mrpeasy-production-schedule.png\" target=\"_blank\" rel=\"noreferrer noopener\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"531\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/05\/mrpeasy-production-schedule-e1638260149814-1024x531.png\" alt=\"production-schedule\" class=\"wp-image-8058\" srcset=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/05\/mrpeasy-production-schedule-e1638260149814-1024x531.png 1024w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/05\/mrpeasy-production-schedule-e1638260149814-300x156.png 300w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/05\/mrpeasy-production-schedule-e1638260149814-768x399.png 768w, https:\/\/www.mrpeasy.com\/blog\/wp-content\/uploads\/2021\/05\/mrpeasy-production-schedule-e1638260149814.png 1867w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/a><figcaption class=\"wp-element-caption\"><strong>Creating accurate production schedules is the basis for improving schedule attainment.<\/strong><\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Supplier_OTIF\"><\/span>Supplier OTIF<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>In manufacturing, a lot depends on the quality of your suppliers.\nReliable partners are an essential part of the success of your company,\ntherefore you should also keep an eye on KPIs related to the performance of\nyour suppliers. One of the most comprehensive ways to do this is to measure the\nOn-Time-In-Full of your suppliers.<\/p>\n\n\n\n<p><strong>OTIF = Number\nof perfect orders \/ Total number of orders<\/strong><\/p>\n\n\n\n<p>For example, let us say that your\nsupplier has made 28 deliveries, of which:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>1 had defective goods<\/li>\n\n\n\n<li>3 were late<\/li>\n\n\n\n<li>3 had fewer quantities than ordered<\/li>\n<\/ul>\n\n\n\n<p>Then the OTIF rate for the supplier is:<\/p>\n\n\n\n<p><strong>OTIF = (28 \u2013 1\n\u2013 3 \u2013 3)&nbsp; \/ 28 = 0.75 = 75%<\/strong><\/p>\n\n\n\n<p><em>Read more\nabout <\/em><em><a href=\"https:\/\/www.mrpeasy.com\/blog\/supplier-performance-management\/\">Supplier\nPerformance Management<\/a><\/em><em>.<\/em><\/p>\n\n\n<div class=\"banner-v1\">\n    <div class=\"banner__text\">\n        <div class=\"banner-v1__title\">Take full control of your manufacturing business<\/div>\n        <div class=\"banner-v1__desc\">MRPeasy users report a 54% average increase in their overall performance and a 42% improvement in on-time deliveries.<\/div>\n        <div><a class=\"banner-v1__link\" href=\"https:\/\/www.mrpeasy.com\/sign-up\/\" target=\"_blank\" data-ga-event=\"blog_signup_banner_white\">Try for free<\/a><\/div>\n    <\/div>\n    <div class=\"banner__img\">\n        <img decoding=\"async\" src=\"https:\/\/www.mrpeasy.com\/blog\/wp-content\/themes\/mrpeasy\/assets\/images\/banner.svg\" alt=\"banner\">\n    <\/div>\n<\/div>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_takeaways\"><\/span>Key takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Even though all KPIs are metrics, not all metrics get to be KPIs.<\/li>\n\n\n\n<li>Both KPIs and metrics are quantifiable measures of performance, but KPIs are set apart by their importance to gauging the attainment of business goals.<\/li>\n\n\n\n<li>Setting business goals and tying them to metrics is key to measuring your progress and improving the processes in question.<\/li>\n\n\n\n<li>The right KPI should reflect the company\u2019s strategic goals, be quantifiable and measurable, attainable and actionable.<\/li>\n\n\n\n<li>Generally, a company should focus on a maximum of ten KPIs reflecting different areas of the company.<\/li>\n\n\n\n<li>With good KPIs in place, a business can improve any area of its operation.<\/li>\n\n\n\n<li>KPIs should be reviewed periodically and changed according to new goals.<\/li>\n<\/ul>\n\n\n\n<p><em>You may also like: <a aria-label=\"What Is Traceability and How to Achieve It? (opens in a new tab)\" href=\"https:\/\/www.mrpeasy.com\/blog\/traceability\/\" target=\"_blank\" rel=\"noreferrer noopener\">What Is Traceability and How to Achieve It?<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The goal of every manufacturing business is to be as efficient as possible. But without being able to accurately gauge your efficiency, it is hard to know where you stand and what goals to set. Here is where manufacturing KPIs come into play.<\/p>\n","protected":false},"author":7,"featured_media":8872,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[94],"tags":[272,894,455,889,888,268,891,884,883,887,885,886,890,265,270,271,16,895,896,267,266,893],"class_list":["post-154","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tips","tag-cost-per-unit","tag-first-time-through","tag-inventory-turnover-ratio","tag-key-performance-indicators","tag-kpis-and-metrics","tag-lead-time","tag-manufacturing-business-metrics","tag-manufacturing-kpi","tag-manufacturing-kpis","tag-manufacturing-kpis-and-metrics","tag-manufacturing-metric","tag-manufacturing-metrics","tag-manufacturing-performance-indicators","tag-oee","tag-on-time-in-full","tag-otif","tag-overall-equipment-effectiveness","tag-production-downtime","tag-production-schedule-attainment","tag-wip","tag-work-in-process","tag-yield"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Top 10 Manufacturing KPIs in 2025 | MRPeasy Blog<\/title>\n<meta name=\"description\" content=\"The goal of every manufacturing business is to be as efficient as possible. 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