Manufacturing Metrics that Matter

Manufacturing Metrics that Matter

Manufacturing is all about precision and quality. Parts are made to exact dimensional specifications, precise formulations, and measured against fastidious engineering standards. Managing manufacturing businesses and operational processes requires the same attention to detail to boost sales, contain costs, improve efficiency, and grow profits. Mark Twain once said, “If the metrics you are looking at aren’t useful in optimizing your strategy—stop looking at them.” This is undoubtedly true for manufacturing executives who measure the wrong things expecting to find hidden insights to grow their businesses magically. In this guide, we discuss manufacturing metrics that matter.

Most manufacturers pay careful attention to metrics to drive daily decisions, improve quality, reduce risk, and guide operational excellence throughout their organizations. However, executives often struggle to make sense of the information due to data issues, lack of strategic vision, missing benchmarks, and a focus on lagging indicators. Further, departmental metrics do not always align with corporate goals, and manufacturing leaders experience “paralysis by analysis” with too many metrics.

This guide explains the importance of tracking key performance indicators, diverse metric types, and common mistakes made by manufacturing executives. Discover the most important metrics to monitor for continuous improvement and align goals for actionable metrics to drive growth and efficiency throughout the organization.

How Metrics Improve Manufacturing Operations

Metrics are everywhere in manufacturing organizations, from accounting to sales and quality to production. Monitoring data helps manufacturers increase sales, improve product quality, reduce costs, fend off competitors, and develop innovative products and services. For example, an Aberdeen benchmark survey shows that manufacturers that reported against KPIs for five or more years were more likely to achieve best-in-class status than those who did not actively monitor KPIs.


Throughput and operational efficiency are critical for manufacturers. It is easy for manufacturers to capture efficiency benchmarks for receiving, production, picking, and order fulfillment activities. Once established, manufacturers monitor efficiency changes over time. These metrics enable them to understand if they are improving or spot problems early before impacting profits and customer satisfaction.


Manufacturing competition is fierce. Metrics enable manufacturers to monitor customer loyalty, total customer value, market share, and market growth for strategic business decisions. Understand your weaknesses, capitalize on market opportunities, and fortify your strengths to fend off competitors.


Manufacturers must establish corporate goals that drive alignment with metrics throughout the organization. For example, Eli Goldratt’s monumental book, The Goal, highlights how optimizing machine utilization runs contrary to reducing bottlenecks or constraints to improve throughput, which is far more critical for manufacturers.


There are only a few ways to increase profits and profitability— sell more, reduce costs, or increase prices. Metrics help manufacturers improve sales opportunities and win rates. They also identify waste and inefficiencies that increase costs. Monitoring the correct information also allows manufacturers to optimize pricing based on value, demand, and competition.


Key performance indicators are often used to predict and negate risk associated with quality issues, incorrect machine setups, and increased costs. Establish KPIs to monitor risk scenarios proactively.


Metrics are essential for strategic planning. Areas where metrics assist decision-making includes safety stock levels, capital investments, marketing, expansion into new markets, and new product launches.

Drop us a line on 011 792 9521 so we can guide you on choosing an industry-specific ERP solution that offers real-time visibility of manufacturing metrics that matter.

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