Industrial Dashboard: Key Metrics for Effective Management
Dashboard: A synthesis of the most important information from an activity report, prepared for higher-level management to facilitate informed decisions and effective company leadership.
Accuracy, timeliness, and controlled synthesis are characteristics of a dashboard. The information must be reliable, timely, and concise. A frame of reference is essential for comparison of future performance. As Berger suggests, any measured aspect of an individual, department, or company should have a baseline for comparison. This baseline should originate from the business plan. Past performance should be used to moderate anticipated performance with the new business plan. For example, this should include: the history of the last one to two years including trends and seasonality, the planned development of new products, current definitions of customer service, early definitions of customer service for the future, compared with industry trends in terms of inventories, and the position of the current product life cycle.
Normally, the board is reviewed on a monthly basis. This guidance can be made permanent through the use of computers and computer systems.
Example of an Industrial Dashboard:
Manufacturing:
- Production: Actual vs. planned production
- Installed capacity utilization
- Labor productivity
- Labor efficiency
- Pending compliance orders
- Downtime
- Preparation or readiness
- Cycle time
- Volume of work in process
- Main problems affecting production
- Production schedule for the next period
Inventories:
- Stock levels
- Turnover
- Stock shortages
- Degradation of products in stock
- Obsolete items
- Total immobilization in inventories
Quality:
- Index of failure or rejection
- Reprocessing due to poor quality
- Returns
- Customer complaints
- Non-quality costs
Product Engineering:
- Launch of new products
- Status of ongoing development projects
Maintenance:
- Indices of availability and effectiveness
- Analysis of stops
- Loss of profit from stops and other inefficiencies
- Labor productivity and efficiency
- Materials and spare parts turnover
- Proportion of preventive versus corrective maintenance
- Planned preventive compliance
- Percentage of scheduled work completed
- Actual costs versus budgeted cost of maintenance
- Relationship between maintenance and sales
Delivery:
- Fulfilling customer orders
- Meeting deadlines
- Distribution costs
- Inherent after-sales service indicators
Plant Services:
- Service availability
- Service costs
- Environmental pollution indicators
Personnel:
- Evolution of allocations by sector
- Overtime
- Absenteeism
- Compensation and its relation to sales
- Turnover
- Accident statistics
- Compliance with training and development
- Labor disputes and their impact on production
Costs and Expenses:
- By product, concept, center
- Major changes
- Breakeven analysis
Investments:
- Progress of ongoing investments
- Cost-benefit analysis of new investments
Dashboard Metrics:
Availability = hours in production / (hours in production + hours of production stops for maintenance)
Stop = loss of profit from lost drives to produce and sell unit contribution margin X
Marginal contribution unit: net sales price – unit variable cost
Cost: budgeted, actual, and variance
Labor:
Present: T = present time / total time
Productivity: P = time charged to orders / present time
Efficiency: E = standard time / time charged to orders
Materials and Spare Parts:
Stock rotation in months = recovered / monthly consumption
Monthly cost of stock valued X immobilization = interest rate
Compliance with planned preventive maintenance = (preventive work orders completed / preventive work orders planned) X 100
Work orders completed = (closed work orders / work orders released) X 100