KPIs for OPEX

We’re all aware of the benefits Operational Excellence can provide when it is achieved. Higher yields, efficiency, and even profitability are direct effects of achieving OPEX, but how is it done exactly? It actually takes many different areas of your business to achieve, but today we are just going to talk about Key Performance Indicators and how they boost the journey to OPEX. 

We will provide you with KPIs in potential areas of your business and then give some context to them (check out our Recommended KPIs tab for the areas of business we focus on for OPEX). If you’re not tracking any KPIs now, it is a very important part of a management system for continuous improvement and helping make smarter business decisions. 

There are many obstacles that lie ahead of manufacturers that KPIs can help navigate for their operation. From leadership to plant floor management and engagement, all parts of business require specific KPIs to boost progress. Some common struggles for operations include, but are not limited to: lack of patience, lack of followthrough, no clear vision for future goals, missing management, engagement from plant floor workers, resistance to change (culture), and trading priority of short-term goals for the bigger picture. These are all hard obstacles to overcome. Of course KPIs won’t fix all of these issues, but in an inclusive system of Operational Excellence practices, they become a key driver in company success and employee engagement. 

The areas we are looking at today are Quality & Safety, Yields, and Productivity. We will share a few key KPIs in each. The list is in order of importance and priority for your operation. 

Safety of employees and food should never be a lower priority than any other area of the operation. Quality comes second in priority under Safety, because it is what keeps your business thriving and customers coming back. 

• Quality & Safety
  • Total Incident Rate
  • Near Misses 
  • Workers Compensation Cost
  • Customer Complaints 
  • Product Returns
  • Non-Conforming Product & Cost
  • Specification Audit Results

Yield comes after Quality, because maximizing Yield can most times produce more result than simply increasing Productivity. 

• Yield
  • Process Yield
  • Product Giveaway
  • Waste Loss Process %
  • Packaging Yield

Productivity will allow an operation to take advantage of new found Yields.

• Productivity
  • Total Labor Recovery
  • Line Standards (Outputs & Efficiencies)
  • Volume Throughput
  • Volume Standards & Results

How do we track, manage, and improve these areas of our business now? 

These of course aren’t close to all of the KPIs in these areas, but the objective is to choose at least 3 Key Performance Indicators in each area of business that offer the greatest ROI for your operation. Once you choose those KPIs, you need to set a baseline for what is acceptable along with various target goals for each KPI. When KPIs are chosen and baselines are set, you can gain a bigger picture objective or standard for Continuous Improvement and Operational Excellence. 

Now that you have this information, you need to figure out how you are going to track these KPIs and manage them. This can be done in some sort of dashboard system, Microsoft tool, or even your own internal systems. If you need any help finding which KPIs are best fit / offer the greatest ROI for your organization, more KPIs to choose from, help identifying specific KPIs for your operation, or just have questions, feel free to reach out to us and let us know you need assistance. We would be happy to serve you and help identify what you need for success in achieving OPEX.