Shock: production metrics determine manufacturers’ success

That’s chief among the unsurprising findings of an industry study by MESA (Manufacturing Execution Systems Association) and analyst Industry Directions, and sponsored by Apriso, Camstar, GE Faunc, IBM, OSISoft, Rockwell and Siemens. Their ‘Metrics that Matter’ research project indicates that manufacturers that leverage technology to share key performance information between operations and finance tend to show clear advantages over those that don’t. In fact, 80% of successful manufacturers that improved significantly against financial metrics also improved performance significantly on operations KPIs. But their study also reveals that only a fraction of manufacturers have the connections they need. Only 3% of reported very effective links between operations KPIs and business metrics – meaning that most companies’ management teams don’t have real time visibility into progress and plant contribution. “What we’re talking about is manufacturers’ survival,” says Julie Fraser, principal of Industry Directions. “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.” The study shows that manufacturers that improved most against financial performance metrics have a ‘metrics framework’ that links operations to finance, speeds automated data collection and feedback to the operation, and harnesses plant software. It also reveals that the top two manufacturing applications planned for investment in the next 12 months are plant dashboards and MESs (manufacturing execution systems). A larger percentage of the companies currently using these two applications have improved significantly against both operations and business metrics than the rest.