The primary goal of manufacturing products is to make money for the business. However, there are various metrics that give indicators for factory performance.
The main KPI’s of manufacturing are Quality, Rate (i.e., throughput), Cost, and Flexibility (how easy it is to implement changes). The exact definitions for “performance” that go beyond their formal definitions will depend on the needs of the business
The aim of manufacturing is to optimize the productive time of the entire assembly line
- Downtimes are costly because it costs money
Many jobs normally thought of as being in the service sector depend on manufacturing for their existence. Thus, moving manufacturing abroad has a huge economic impact.
Operations refer to the application of resources for the production of goods
There are three important dimensions to consider
- Cost. From the production side, the amount of capital and labor. From the consumer side, the unit cost (total cost divided by total volume). Manufacturers of commodities try to minimize cost
- Quality. From the consumer side, we have external quality. From the production side, internal quality. Manufacturers of premium or luxury goods rely on quality of the product
- Speed. The goal is to bring products to the market as swiftly as possible. Manufacturers of technology-dependent products rely on speed

Topics

The Library