Metrics that Matter for manufacturing success

According to recently released research results from Manufacturing Enterprise Solutions Assn. (MESA), manufacturers’ success rests largely on how effectively they measure financial and operational performance. The Metrics that Matter research project indicates that manufacturers that leverage technology to more frequently share key performance information between operations and finance have a demonstrated clear advantage over those who don’t. The study also revealed that only a fraction of manufacturers who responded to the MESA survey reported having those effective links for measuring performance. The research was unveiled at the MESA Plant2Enterprise Conference in Orlando, FL.

Julie Fraser, principal of Industry Directions Inc., said, “If operations and finance aren’t on the same page at the same time, you have a company at cross-purposes. And most manufacturers can’t afford to be in that position today.”

Some of the study highlights included:

- Manufacturers who improved the most against financial performance metrics—the Business Movers—have a metrics framework that links operations to finance, speeds data collection and feedback to the operation, and leverages plant software.

- The top two manufacturing applications planned for investment in the next 12 months are plant “dashboards” and manufacturing execution systems (MES). One in three respondents plan to buy plant “dashboards” in the next 12 months, and 29% plan to buy MES.

- Respondents who use plant dashboards are more than twice as likely to have significantly improved cash-to-cash cycle times and total inventory on hand.

- A larger percentage of the companies currently using these two applications have improved significantly against both operations and business metrics than others.

- Eighty percent of Business Movers who improved significantly against financial metrics also improved performance significantly on operations Key Performance Indicators (KPIs).—[email protected]