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Frequent Measurement Key To Performance Management

Manufacturing performance correlates directly to frequency of measurement, yet 84 percent of manufacturing companies are still relying on spreadsheets and ad hoc performance monitoring despite the availability of mature and emerging technologies, according to a recent report from Boston-based AberdeenGroup Inc.



The report, titled “The Manufacturing Performance Management Benchmark Report,” revealed a subtle shift in pressures on companies. Customers continue to demand lower prices; however customers’ demand for shorter lead times has now become the number-one driver in manufacturing performance management strategies. This report finds far too few commercial information technology (IT) solutions being utilized, although “Best-in-Class” companies are out in front and getting better, while poorer performers make little progress, so the performance gap is widening.

“Best-in-Class companies emphasize interoperability along with price, quality and delivery,” said Cindy Jutras, vice president and service director of AberdeenGroup’s Manufacturing practice. “They utilize Lean manufacturing to eliminate waste, accelerate real-time data collection and leverage workflow technologies and alerts. Better performance also correlates directly with frequency of measurement.”

Jutras offers specific recommendations for manufacturers looking to improve performance management:

l Measure Key Performance Indicators (KPIs) more frequently—quality deviations should be monitored in real time; operational metrics such as shipment schedule compliance should be measured daily

l Balance cost reduction efforts against customer satisfaction—as acceptable customer service levels are achieved, work specifically to reduce inventory levels

l Use available technology for data collection, operational efficiency and visibility—integrated manufacturing and operations intelligence platforms, as well as analytics and other business intelligence tools.

More than 145 companies participated in the quantitative study, including Coca Cola, Delta Airlines, IBM and Sara Lee.

This report has been made available to the public due to the underwriting of: Activplant Corp., Informance International Inc. and Siemens Energy & Automation Inc. A complimentary is available on the AberdeenGroup Web site.

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