A new study by the Manufacturing Enterprise Solutions Association (MESA) International proves that manufacturers who use operational metrics to manage their business performance are improving their earnings, net profit, and manufacturing cost as a percentage of revenue.
The study, conducted by independent global industry analyst and market research firm Cambashi, focuses on the role of plant performance metrics programs, and reveals the practices that lead to significant improvements in business performance based on 305 responses from manufacturers and producers across multiple industries worldwide.
Most importantly, the research establishes the importance of linking plant operations metrics to business and financial measures in real-time to reveal impact and prioritize action—in other words, Operations Performance Management.
Highlights of the study:
- Significant improvements in financial performance are possible (and proven) through the strategic use of operations metrics.
- Linking operational activity to business priorities is critical to improving profitability.
- Capacity utilization is the main operational metrics factor for manufacturers who improved Net Operating Profit by 10% or more.
- The most successful companies use Operations Performance Management (OPM) software that enables quick understanding, such as drill-downs for root cause analysis.
- Companies improving on multi-faceted metrics such as overall equipment effectiveness (OEE) are more likely to improve their financial performance.
- For companies with multiple production facilities, consistency in calculation and definition is beneficial (i.e. using standardized metrics to make accurate comparisons).
Thank you for checking out this blog and IQity’s fresh new web site. I’ve timed the launch to coincide with another launch, of our IQ-Fusion Express product. I’m very excited about both of these, because they are going to help a lot of companies to be more profitable.
Each week in this blog, I’ll be exploring some of the most vital topics in the field of Enterprise Performance Management. I look forward to talking with you—our customers, partners, and prospects—about critical and timely issues that impact manufacturers today. You’ll get to know me and the things I care about, and I think you’ll find they are issues that you care about too. Or if not, maybe this blog will get you thinking. Thinking about the acceptance of mediocrity that permeates our business culture (bad)…the potential for growth and profit that comes from attacking variation (good)…or the next-generation technology now available to harness to achieve our goals (very very good). Together, we’ll cover a lot of ground.
For today, I’ll be brief, and simply invite you to look around our new web site. I think you’ll agree it positively glows with new possibilities.