Is Benchmarking Manufacturing Performance Vital for a Business?

by Isabel Blamey Professional writer
Worldwide, manufacturing managers are under tremendous pressure due to the increasing outsourcing of production activities. They need to produce and deliver quality products on time at affordable prices. This is not the end. The customer services should also be excellent. Here emerges the question- how these all can be achieved? For achieving these, the leaders should set up production schedules; optimum workflow, effective maintenance, and continuous improvement that will help the company stay in the competition. 

To figure out which manufacturing areas need further improvement, as an entrepreneur, you need business benchmarking in terms of manufacturing performance.  You need to benchmark your performance against your competitors. Many companies use data from their open standard manufacturing resources to analyst the current state and identify the areas that need improvement.

When it comes to benchmarking manufacturing performance, a business should consider the following measures:

Total Cost to Manufacture

What is the total cost to manufacture? It is the total amount spent by your business to manufacture quality products.  Look at the total cost to manufacture spent by the top and bottom performers.  Now locate your stand in between these two. No doubt, a lower manufacturing cost is intended for obvious reasons. Utilising the cost alone as the basis for decision-making will have unexpected consequences on quality, cycle time, and other strategic issues. When you evaluate lower costing options such as outsourcing, do not forget to consider their impacts on customer satisfaction and other vital metrics.

Value of Shipment

You need to benchmark your business to understand the efficiency of manufacturing processes. For this, you will need to pick the right measure- that is the value of your shipment per employee.  Top performers will obviously ship more products per employee in comparison to the bottom performers.
You should search for new approaches that can motivate the employees and inspire them to contribute ideas and energy. This way, you will be able to turn your factory into a more productive one. 

Unplanned Downtime

According to business benchmarking experts, the gap between the top and bottom performers for unintended downtime should not be more than 4% of scheduled run time. This unexpected downtime may lead you to serious issues having negative impacts on the production schedule of your organisation.

If you determine the frequency of your downtime, you will be able to trace the sources of the interruptions. This action will lead you to preventive maintenance programs that save investment in devices. This way, you will be able to reduce the cost of delays resulting from unscheduled downtime. 

Manufacturing Cycle Time

Manufacturing downtime is likely to vary rapidly. Bottom performers will take more time to manufacture products than the top performers. These days, many factories are successfully reducing the manufacturing cycle time using lean manufacturing and other improvement processes. For a change, you can replace your long production cycle with the flexible work cells for pulling materials from suppliers and tailor products based on different orders.

A Final Takeaway

Benchmarking is an important business operation that helps you evaluate your organization’s manufacturing performance. Whenever you will look at how your peers are performing on key manufacturing measures, you will be able to determine which areas need your attention.

Author Bio

The Author is an experienced business benchmarking consultant. He is currently working with a benchmarking firm. As a part of his profession, he pens informative blogs that will help you benchmark your business in the right way. 

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About Isabel Blamey Senior   Professional writer

176 connections, 6 recommendations, 590 honor points.
Joined APSense since, June 21st, 2016, From Perth, Australia.

Created on Dec 13th 2019 01:46. Viewed 244 times.


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