Bramvia — Business Central Experts

A dashboard won't save you: what mid-market manufacturers should actually measure (and why most KPI lists fail)

Every article gives you ten manufacturing KPIs. None tells you which one is costing you money right now. The six numbers that change decisions, where each one comes from, and what to do when your system can't produce them.

Short answer: most manufacturing KPI articles hand you a list — OEE, scrap rate, on-time delivery, inventory turns — without saying which one matters for your problem, where the data comes from, or what to do when your system can't produce it. A dashboard built on numbers nobody trusts gets ignored in six weeks. What works is narrower: six numbers that change a decision, each traceable to a source you already have, each with a threshold that triggers an action. Contribution margin by product and customer. Inventory age. Expedite count and cost. Actual versus standard yield. Quote-to-cash cycle. Schedule adherence. If you can produce those six, you can find your leaks. If you can't, that is the finding — and it is more useful than a screen full of gauges.

Why most KPI dashboards die

They measure what's easy, not what's decisive. Units produced is easy. Contribution margin per unit after freight and rebates is hard — and it's the one that tells you what to reprice.

Nobody owns the number. A metric without a person and a threshold is decoration. "On-time delivery: 87%" changes nothing. "On-time delivery below 92% for two weeks → production planning review, owner: Maria" changes something.

The data is assembled by hand. If a person rebuilds it every Monday in a spreadsheet, it will be late, inconsistent, and eventually abandoned. And the hours spent building it are themselves a cost.

They report the past with no context. A number without a target, a trend and a comparable is trivia.

The six numbers that change decisions

1. Contribution margin by product and by customer. Not gross margin — everything loaded: landed component cost, inbound and outbound freight, rebates, returns, discounts. Decision it drives: what to reprice and what to walk away from. Threshold: anything below your floor, reviewed monthly. Where it comes from: order lines plus actual costs plus deduction agreements. This is the single most valuable number in a cost surge, and the one most companies cannot produce.

2. Inventory age and dead stock value. Value on hand versus consumption over 12 months, per item. Decision: what to liquidate, what to stop buying. Threshold: zero movement in 12 months → disposal review. Where: item ledger.

3. Expedite count and cost. Rush orders per month, with premium freight, overtime and the knock-on late order. Decision: fix the planning cause, or price expediting properly. Threshold: a trend, not a number — three months rising is the signal. Where: shipments plus freight invoices plus production reschedules.

4. Actual versus standard consumption (yield). Per production order, over a year. Decision: update standard costs — because every quote sits on them — and find the processes where material or time is being lost. Threshold: deviation beyond your tolerance, per item family. Where: production orders.

5. Days sales outstanding versus your terms. Not the average — the gap. Terms at 30, actual at 74, is 44 days of your cash funding somebody else. Decision: credit control, dunning, and who gets blocked. Threshold: the gap itself. Where: AR ledger.

6. Schedule adherence. What percentage of production orders finished on the day planned. Decision: whether your plan is a plan or a wish. Threshold: below 85% means planning has broken down. Where: production orders, planned vs actual.

That's it. Six numbers, each with an owner, a threshold and an action. If you want OEE and scrap rate on top, fine — but add them after these six work.

Where the numbers actually come from

Almost every one of these lives across two or three places in a typical mid-market company: the ERP, a freight or logistics tool, and a spreadsheet somebody maintains. That's the real obstacle. It is not that the data doesn't exist — it is that assembling it takes a person a day, so it happens quarterly at best.

Three ways out, in increasing order of effort:

What to do when your system can't produce them

This is the honest part. Some systems cannot give you contribution margin by customer, because freight and rebates were never captured against the order. Some cannot give you yield, because production feedback is a paper sheet. In those cases:

  1. Do it manually once, for a quarter of data. It's a day of work and it tells you the size of the prize.
  2. Decide whether the prize justifies the plumbing. Sometimes capturing freight per order is a configuration change. Sometimes it's a project.
  3. Don't buy a dashboard tool to solve a data problem. A visualization layer over missing data produces confident-looking nonsense.

And if the conclusion is that the system itself is the constraint, that's a legitimate finding — but it should come from the numbers, not from a vendor's demo. We would rather tell you your current system is fine than sell you a migration you don't need. What we look at first.

FAQ

What about OEE? Useful when equipment is genuinely your constraint. In most mid-market plants the constraint is planning, purchasing or mix — not machine availability. Measure OEE after the six above, not instead of them.

We're a distributor, not a manufacturer. Drop yield and schedule adherence; add lines-per-order-picked and perfect order rate. The first four apply unchanged.

How often should these be reviewed? Monthly for margin, inventory and yield; weekly for expediting and schedule adherence; DSO whenever the gap moves.

Who should own them? One named person per number, with authority to act. A metric owned by "the management team" is owned by nobody.

Want the six numbers for your company without building anything? Free assessment, no commitment — or see how the Profit Leak Audit works.

Bramvia · bramvia.net