Manufacturing KPIs

Fill Rate

Fill rate represents the percentage of your orders that can be satisfied immediately by inventory available in your factory. This metric is essential to providing exceptional service to your customers and maintaining positive customer relationships. However, increased customer satisfaction must be balanced against the cost of maintaining higher levels of inventory. Having access to real-time inventory data can significantly impact your company’s ability to maintain proper inventory levels and achieve an optimal fill rate.

• < 97%
• 97%
• 97.8%
• 98.5%

“Manufacturers accounted for half of the $150.8 billion investment in analytics.”

Source: IDC

Cycle Time

A fast cycle time is critically important to manufacturers in an era where 2-day deliveries have become the normal customer expectation. Cycle time and lead time are frequently confused. Cycle time represents the time it takes from the start of production to when an order is complete, while lead time starts at the time the order is placed by the customer and ends when the order is delivered. Therefore, reducing cycle time allows for a shorter lead time, thus increasing customer satisfaction.

• < 96 days
• 84 days
• 54 days
• < 24 days

Inventory Turnover

Inventory turnover reveals how fast products are moving out of the factory and creating cash flow. Inventory turnover for manufacturing companies vary greatly depending on the type of product sold (perishable v. non-perishable, hard v. soft goods, etc.), and as seasonal demand changes. Another important component to consider when defining inventory turnover goals is the gross margin on the sale of your manufactured products. Lower margin items require higher stock turnover to meet revenue targets. A higher ratio indicates that money is changing hands and funds are not tied up in products with little demand or low sales.

• < 3 turns
• 6 turns
• 7 turns
• 11 turns