Somewhere in production, one of several thousand sensors records an unusual event, and an e-mail message is automatically sent to your chief executive officer (CEO). Is this an ideal scenario? Not likely. Not for the CEO, anyway, at least not if it happens with every manufacturing blip. The CEO gets enough e-mail without hearing from “Actuator 2594,” or any of its neighbors.

Still, if this sensor is part of an array that oversees a cell that is critical to product completion, you might want this bit of data to go to several recipients in the company—and right away. Maybe maintenance could add some oil or change a motor, or operations could shunt production to a neighboring line.

Consolidating the continuous flow of production data from operators, machines, sensors and switches into a neatly wrapped package of information that is useful to other enterprise functions is no mean feat. It requires both top-down and bottom-up perspectives. The top-down perspective considers what information is useful for upper management. The bottom-up view depends on a combination of data aggregation, history and presentation (visual dashboards among them) to boil down the broad flood of production data into information that others in the company can understand—and act upon.

Of course, if your focus never wanders outside the walls of production, the first question might be, why bother? We do what we do, and we do it at the rate we can achieve—where does the CEO come in?

Top management wants to monitor things that are central to your company’s business. It wants you to measure things that matter. And the Manufacturing Enterprise Solutions Association International (MESA) and Cummaquid, Mass.-based analyst firm Industry Directions Inc. recently published the results of a study focused on just that. “Metrics that Matter” looks at some of these interesting questions:

What metrics—including key performance indicators or KPIs—matter to top executives?

What do a range of companies measure in manufacturing?

Which of these measurements, applied intelligently, serve to further company goals?

By focusing on metrics that matter, MESA and the study's developers and contributors have made a key distinction between measurement and meaning. You can measure all sorts of things in production, but only a select few make a real difference. And only a select few metrics say anything compelling to upper management.

"More and more, performance management on the enterprise level centers on core financials," says Julie Fraser, principal, Industry Directions. "The enterprise view calls for ways to track profitability, as well as orders for products, and measures the performance of the company in fulfilling those orders. Manufacturing can gain the ear of top management when production metrics measure the production-side elements that contribute to the performance of the company as a whole."

The means and methods of monitoring enterprise activity, "performance management," are in constant flux. At the heart is the marshaling and monitoring of resources to track progress toward specific goals. Taking the broadest possible view of a manufacturing business, these goals include designing and making products that people want, making sufficient numbers of those products to satisfy the need in a timely way and making enough money to stay in business.

There is admittedly a lot of static in the performance management signal for a key reason: a lot goes on in production. Because of this, performance management requires an extremely broad system. Those who want to employ performance management must take a systems view that begins with switches and sensors and ends with comprehensive reports.

The wider this system view, the more that interdepartmental participation—collaboration—will make sense. Company success is collaborative, whether a given company recognizes or organizes around that fact or not. Design walks on the edge if it doesn't consult with manufacturing about the requirements for profitable manufacturing—in other words, manufacturability. Similarly, manufacturing has to work with design to succeed in making product with full functionality. And it obviously needs input from sales and order fulfillment for planning. Finally, manufacturing can benefit from quality's input on how well it is meeting specifications.

And here is where simple guidelines evaporate. "There is, of course, no single answer that applies across all industries, or even across all plants within a company," says Charles (Charlie) H. Gifford, senior solution architect, Lean Performance Management, Global Professional Services Business, at automation vendor GE Fanuc Automation, in Charlottesville, Va. Gifford has contributed in the development of technical standards for manufacturing, including the definition of the Instrumentation, Systems and Automation Society’s ISA-88 and ISA-95 standards.

"Choosing the exact types of performance ...