Production management is fundamental to guarantee companies' performance and competitiveness. In this context, production planning and control (PCP) is a crucial area, responsible for planning, scheduling, and controlling production activities to ensure efficient, effective processes.
To measure and evaluate PCP performance, several indicators are used, making it possible to identify problems and improvement opportunities, as well as to assess whether established goals are being met.
Want to get to know the main PCP indicators and how they work in production management? Stay with us, because that is exactly what we will talk about today. Let's go!
Why are PCP indicators important to the operation?
PCP (production planning and control) indicators are measures used to evaluate and monitor the performance of a company's production processes. They give the team a clear view of what is happening in production and help drive more assertive decisions about production processes.
Among the benefits of using the best PCP indicators, we can highlight:
- Monitoring production performance;
- Fact-based decision-making;
- Identification of problems and nonconformities;
- Increased efficiency and productivity;
- Awareness of what is actually working;
- Generation of strategic data and information.
With that in mind, here are the 8 main production indicators and what each one is used for:
1- Man-hour productivity
The man-hour productivity indicator is used to measure labor efficiency in a production process. This indicator relates the number of hours worked by employees to the quantity of products or services produced in that same period of time.
The following formula is used:
Man-Hour Productivity = Quantity of Products or Services Produced / Total Hours Worked by the Team.
2- Overall Labor Effectiveness (OLE)
Overall Labor Effectiveness (OLE) measures labor efficiency in a given process or activity. The goal of OLE is to evaluate the team's performance against defined goals. This is a crucial indicator for understanding whether the workforce is meeting management's expectations.
3- Mean Time To Repair (MTTR)
Mean Time To Repair (MTTR) considers the average time needed to repair a failure in a piece of equipment or a system. This indicator is used mainly in the maintenance area, since it evaluates the effectiveness of corrective actions and helps improve repair processes.
MTTR is calculated by adding up the time spent repairing a piece of equipment or system in each failure occurrence, divided by the total number of failure occurrences in the period analyzed.
For example, if a piece of equipment failed three times and the total time spent repairing it was 9 hours, the MTTR would be 3 hours (9 hours/3 failures).
4- Mean Time Between Failures (MTBF)
Mean Time Between Failures (MTBF) is used to measure the average time between failures of a piece of equipment or a system. MTBF is an important measure for preventive maintenance, as it helps identify the expected service life of equipment and plan maintenance in advance, before unexpected failures and stoppages occur.
5- On Time In Full (OTIF)
On Time In Full (OTIF) aims to measure how efficiently the supply chain delivers products to customers within the agreed deadline and in the correct quantity. That makes OTIF one of the most important indicators for customer satisfaction.
OTIF is usually expressed as a percentage and calculated by dividing the number of orders delivered correctly and on time (in full quantity) by the total number of orders received in the period analyzed.
For example, if a company received 100 orders in a month and delivered 92 of them on time and in the correct quantity, the OTIF would be 92%, which is a positive result.
6- Downtime
The downtime indicator is a metric used to evaluate the time during which a piece of equipment, machine, or process is unavailable or stopped, whether due to failure, maintenance, or other reasons.
This indicator is important because downtime can represent a significant loss of production and, consequently, of revenue for the company.
In addition, downtime can impact production efficiency, leading to delivery delays, additional maintenance and repair costs, and even damage to the company's image.
7- Installed capacity utilization
Installed capacity is the maximum production capacity a company can achieve with its available resources. This indicator takes into account the total production volume and the time needed to produce that volume.
Low utilization of installed capacity may indicate underused resources and, therefore, wasted money and time. On the other hand, high utilization of installed capacity can lead to problems such as delivery delays, longer waiting times, and lower quality, among others.
8- Overall Equipment Effectiveness (OEE)
Overall Equipment Effectiveness (OEE) considers the effectiveness of a piece of equipment or production process. OEE takes into account three main factors that influence productivity: availability, performance, and quality.
Availability measures the time the equipment is available to produce, excluding scheduled maintenance stops and unscheduled failures.
Performance measures how fast the equipment produces compared to its maximum capacity, taking into account scheduled stops and small interruptions during the production process.
Quality measures the proportion of manufactured products that meet the established quality requirements.
Performance indicators are tools capable of measuring, monitoring, and evaluating performance within an operation. They are a fundamental part of modern, effective management — and they make life easier for managers and employees alike!
Need help controlling production? Get to know the Useall ERP.
Originally published in Portuguese at useall.com.br.