I recently spoke with a software developer at a fintech company who told me that a surprisingly large part of her work revolves around KPIs. She estimated it was more than half her time.
It made me think about a gap I often see when looking at production workflows through a Lean Six Sigma lens: many smaller manufacturers don’t track their operations with the same discipline that software companies do.
It sounds obvious. Business owners know whether the company is profitable.
But profitability alone doesn’t tell you whether the business is operating efficiently or how much potential profit is being lost through preventable problems.
Take rework.
What percentage of your orders must be redone because of production errors, incorrect information, damaged materials, or missed requirements?
And what does that rework actually cost, not only in materials, but also in labour, production capacity, delayed orders, and time taken away from profitable work?
In many businesses, people know that rework happens, but they often don't quantify the rate or its full cost.
That money is quietly being donated to the god of disorganization.
You don’t need dozens of complicated metrics to begin, but a simple, consistent system for tracking them can make a big difference. A manufacturer might start with:
- Rework rate
- Cost of rework
- On-time delivery rate
- Average order cycle time
- Production time lost to corrections
If nobody knows how much the rework costs, that seems like a good place to start.