In Industry 4.0 and in the digitalization of production plants, indicators and KPIs (Key Performance Indicator) play a crucial role in monitoring and efficiency improvement. They are fundamental indicators to measure the evolution of our companies, but… What is the reality of our production plants? Do you already measure what you should?
Below, we will see which are the most important KPIs in Industry, the advantages of using them, why they are necessary and how to visualize them with Grafana for Industry:

With 72% of manufacturers currently implementing some form of smart factory strategy, a study surveyed 500 decision makers to find out which are the most important manufacturing KPIs in their industries (source IoT Analytics).

Operational KPI: Optimizing Production

Operational KPI are vital for measuring performance across all regions, industries and company sizes. These KPI can be improved through monitoring and analytics, and among them, the following are key:

Overall Equipment Effectiveness (OEE): at the heart of production

OEE (Overall Equipment Effectiveness) measures how efficiently production time is used and is the most important KPI for measuring the success of smart factory strategies..

• Relevance: Essential for ~86% of manufacturers.
• Advantages: It allows to detect areas of improvement in equipment utilization (availability), product quality and performance.
• Future: mplementation of technologies such as monitoring and analytics can further enhance OEE.

Labor Efficiency: maximizing human potential

Labor Efficiency focuses on how workers spend their time and resources. It is essential to provide people and teams with reliable information that allows them to detect problems and areas for improvement first hand.

A very interesting possibility is to democratize data and continuously show workers their performance (how well or badly they are doing today), but we have to look for a customized KPI. OEE is not enough, as certain stops and breakdowns should not be taken into account.

• Relevance: ~79% of manufacturers measure increases in labor efficiency.
• Advantages: It leads to higher employee satisfaction, lower turnover and higher productivity.
• Future: The integration of modern technologies can optimize labor efficiency, allowing employees to focus on more valuable and value-added tasks.

Production Increase: expanding capabilities

Increased production is a direct reflection of how processes and resources are optimized.

• Relevance: This KPI, measured by ~78% of manufacturers, is critical to achieving growth targets and meeting market demands.
• Advantages: Increasing production leads to greater resource utilization, improving profitability.
• Future: Solutions based on process Monitoring can lead to a more agile and adaptive increase in production.

Other interesting KPI in production:

• Cost Reduction: measured by 77% of manufacturers.
• Quality Increase: measured by 76% of manufacturers.

Other KPI in industry

Although in an industrial company, the main focus is on production and how to improve it, there are other KPIs applicable to different areas that should not be forgotten: Supply Chain KPIs, Safety KPIs, Marketing and Sales KPIs, Sustainability KPIs, Financial KPIs. 

Obtaining different KPIs from different departments will provide us with an even more global vision, and will improve our decision making. 

Create the Best Industrial KPI

To create an effective KPI, you need to take into account:

• Clear Objectives 🎯: Each KPI needs a well-defined goal. What are you trying to achieve? Can it be achieved? It must be something numerically defined, no vagueness!
• Objetive Measurement 📏: You must be able to objectively measure your progress towards the goal. This means collecting and interpreting data.
• Data, Data, Data 📉: The source of data must be clearly defined with a strict procedure on how data is measured or collected. There should be no room for interpretation.
• Reporting 📝: Reporting data is just as important as collecting it. Manufacturing KPIs will have different reporting frequencies, usually weekly or monthly!
• Dig deeper 🌐: Once we understand basic KPIs, we can delve deeper into the world of manufacturing KPIs and explore lean manufacturing KPIs.

Visualize your KPI – Grafana for industry

We know that the way we visualize our KPIs is fundamental, and it often makes the difference in making better decisions. Therefore, we need to have a well-prepared visualization tool. 

One option is Industrial Grafana, where we have previously seen how to get the most value out of it, in the post: The best Grafana plugins for the Industry. 

Grafana will provide us with flexibility and an agile and clear visualization. If you wish to see an example, we leave a link to our demo here: