The primary goal of industrial companies is to achieve maximum productivity , or what is the same, to fine-tune their production processes to the maximum in order to get the most out of the time and resources used . Now, is it possible to determine productivity with measurable parameters? Is there any type of tool capable of analyzing this that is really useful to meet objectives?
Productivity indicators in an industrial plant are crucial to ensure the smooth running of economic activity, whatever its nature, and having an appropriate ERP software for industry such as Microsoft Dynamics 365 Business Central greatly helps to have everything under control.
Why is it important to measure the productivity ratio?
The productivity ratio of a company is what determines, in measurable criteria, what the company’s work level is and how it is affecting its stability. In other words, it is the data that makes it clear whether the actions being carried out are the most appropriate or whether it is necessary to apply a change of course that improves the results obtained to date.
It is about obtaining data that allows us to know if the production processes are well optimized and that, if negative, allow us to apply variations that manage to produce more in less time and, if possible, using the minimum of raw materials.
To speak of the productivity ratio, therefore, is to speak of how to boost the company’s results, analyzing how it is working and knowing which are the points to reinforce in order to achieve a notable improvement .
This is why it is important to measure the productivity ratio of a company:
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Know in real time the current moment of the company.
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Make conscious decisions based on contrasted needs .
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Know if the employees are assimilating the concepts well.
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Find out at what point in the production process it is failing .
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Achieve improved results with the resources that are already available.
Productivity indicators in an industrial company
The productivity indicators of an industrial company are called KPIs , and they are all those factors that are considered essential to control in order to achieve maximum efficiency in all the processes that are carried out in an organization.
Thus, if we talk about examples of production indicators , KPIs of the production process in general, the efficiency of a particular machine or the effectiveness of a worker during his shift can be measured.
The objective of resorting to industrial productivity indicators is to squeeze as much as possible of the resources we have, and below we will see some of the most common.
Efficiency of industrial activity
Measuring how long it takes to produce something and comparing it to how long it could take based on the staff and machinery you have is extremely important. The difference between what we could theoretically be producing and how much we actually produce is money the company is losing, and finding the reason for this will increase profits.
Quantity of raw materials
Knowing what raw materials are available at the beginning of the industrial process and which ones are available at the end helps to know if costs can be adjusted, buying only what is going to be used.
stock breaks
Measuring how many times production is stopped due to not having enough raw materials and translating this into how much money these types of setbacks cost is essential to know how much more could be generated and, therefore, also earned.
Cost of materials
Knowing for sure how much is spent on supplies is key to knowing if the production is being sold at the appropriate price or, failing that, if suppliers have to be changed.
Quantity of defective product
Defects in production cause the company to lose money, so it is necessary to know first-hand what percentage of the product is lost along the way in order to study how to reuse it and, above all, how to put an end to this bleeding.
How long does it take to get paid
Studying customer collection processes is extremely important to determine the liquidity of the company, which may or may not address certain challenges only if it has the necessary cash to do so.
Dashboards for the industrial sector
Power BI is the application that we have developed on top of the ERP Business Central: four dashboards with more than 50 key indicators so that industrial companies can see the status of their business at a glance.
There are many more indicators of industrial productivity that companies themselves can mark to achieve maximum efficiency depending on their needs. Of course, they all have something in common: the easiest and most effective way to analyze them is by using quality industrial ERP software like the one we offer you at Dynamics Square .
