![]() ![]() ![]() Also be sure to collect data regarding actual outputs. To measure the utilization rate, you need to capture resource capacity data from inventory inflows and outflows, cycle times, and output capacity. In other words, this is a ratio between how many vehicles an automotive company can produce over a period of time and how many vehicles the company could potentially produce in that same period with optimal use of time and labor. Utilization rate = (actual level of output) ÷ (maximum level of output) x 100. Therefore, due to downtime being especially costly for automotive manufacturers, these businesses must take special care to track downtime accurately.Īlso known as capacity utilization, the utilization rate is the amount given by the following calculation: Across all businesses, the average cost of downtime is about $260,000 per hour, and it is often stated that manufacturers experience about 800 hours of downtime per year. According to an Advanced Technology Services survey, in the automotive industry, downtime costs up to $50,000 per minute, or about $3,000,000 per hour. Businesses will often hear that downtime is extremely expensive, and this holds especially true in the automotive industry, where it is estimated to be far more costly than in other manufacturing industries. You can calculate this value as the ratio:Īverage Downtime = (downtime hours in a time period) ÷ (total time available to produce vehicles in the same time period) x 100.Īny automotive business must, of course, take action to ensure that this time is minimized. One of the most critical indicators automotive businesses need to be aware of is downtime. Here are six Key Performance Indicators that Logan Consulting sees its automotive clients focus on. But including the vital yet possibly overlooked KPIs ensures that a business can determine the areas of success and the areas requiring improvement, and to what extent those areas must be improved. With so many KPIs to consider, it may seem daunting to have to choose among them. This is where the KPI concept comes in.Įnsuring that a business knows exactly what to measure and how to measure it is vital. With that said, an automotive business cannot make improvements in areas where it cannot measure success. For example, according to IHS, only about half of new car buyers remain loyal to the brand they already owned, showing just how competitive this industry can be. It is no secret that the automotive industry is very competitive, requiring any automotive business to make every improvement possible to compete. Posted on: Novem| By: Andrew Logan | QAD Manufacturing, QAD Business Process 6 Key KPIs for Automotive Industry Operations Executives ![]()
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