Why KPIs Matter More Than Dashboards
Running a small or mid-sized manufacturing company isn’t easy. You juggle customer expectations, supplier lead-times, machine uptime, and a team that relies on you to keep work flowing smoothly. In the middle of all this, you need information you can trust—information that helps you make decisions quickly without drowning in noise.
Here’s the catch: many companies confuse data with insight. They create dashboards full of colorful charts, but most of them don’t actually drive decisions. We’ve seen companies track dozens of numbers just because they can, only to find themselves overwhelmed, unsure which ones really matter.
The truth is, not every metric deserves your attention. If you’re looking at everything, you’re focusing on nothing.
That’s why we believe in keeping it simple. Fewer, more meaningful KPIs (Key Performance Indicators) are far more valuable than a cluttered dashboard. We even wrote about the difference between KPIs and Reports here and shared our thoughts on how to define meaningful KPIs here.
This article focuses on the 10 KPIs we believe every manufacturing company should track—the ones that consistently guide better decisions.
The Cost of Tracking the Wrong Metrics
When a company confuses “reports” with “KPIs,” dashboards fill up quickly. The result?
- Leaders struggle to spot the real issues.
- Teams lose confidence in the numbers.
- Problems get addressed too late.
For example, we’ve seen cases where companies proudly tracked machine uptime percentages down to decimal places but had no idea if their orders were being delivered on time. Others focused on tracking daily output numbers without checking if their average margins were sustainable.
Without the right KPIs, it’s like trying to steer a ship in fog—you might move, but you don’t really know if you’re heading in the right direction.
The Top 10 KPIs We Recommend
These KPIs are not about giving you a dashboard that looks impressive; they’re about helping you make faster, smarter, and more profitable decisions.
1. On-Time Delivery Rate
How many orders are delivered compared to how many were promised on time? Falling behind regularly damages customer trust. This KPI tells you whether you should set more realistic lead-times or improve processes to actually meet them.
2. Average Lead-Time
Track how long it takes from receiving an order until the customer has it in hand. Break it down by type, size, or complexity of product. If this number starts climbing, it’s a clear sign that capacity or process improvements are needed.
3. Expected Revenue per Month
Look beyond sales bookings—what matters is when revenue will actually be invoiced. If you land a big order today but it delivers over several months, cash flow could suffer in the short term. This KPI helps balance production priorities with financial health.
4. Capacity Utilization
Know how much your equipment is really being used. Low-utilization machines may be opportunities to turn orders around faster, while bottleneck processes need attention before they limit growth.
5. Average Margin
Combine real shop-floor times with material costs and compare them to sales prices. This reveals which jobs or customers truly contribute to your business and which ones drain resources.
6. Quoting Win/Loss Rate
Are your quotes converting to orders? If you spend too much time quoting with poor conversion, something needs fixing—either in pricing, response time, or customer targeting.
7. Quality Overall Scorecard
How many units were produced, and how many had quality issues? Rising quality problems not only hurt reputation but also point to deeper process issues. This KPI often highlights where continuous improvement projects should start.
8. WIP Inventory Cost
Materials stuck in production tie up cash. The longer the conversion from material to invoice, the more cash flow is needed to keep operations running. Keeping WIP lean protects both cash and risk.
9. Overhead Cost Percentage
Compare overhead costs against revenue. If the percentage rises, either sales are too low or overhead costs are creeping up. This KPI should feed directly into how you price quotes.
10. Cost of Quality
Track the costs of rework or scrap. If this number is consistently high, it may justify investing in better equipment or process improvements. When you know the cost, it’s easier to calculate ROI for improvement projects.
Why These KPIs Work
All 10 of these KPIs are practical and action-oriented. They’re not just numbers for the sake of numbers; they guide decisions that affect delivery performance, customer satisfaction, profitability, and long-term sustainability.
Better yet, these KPIs are scalable. Whether you have 5 employees or 100, they apply across most types of manufacturing—metal, plastics, assemblies, or mixed processes.
And when something changes in one of these KPIs, the next step is simple: dive deeper into reports to understand the cause. KPIs tell you what needs attention, reports tell you why.
How to Start Using Them
Implementing these KPIs doesn’t have to be complicated. Here’s a simple starting plan:
- Pick 3–4 KPIs first. Choose the ones that resonate most with your current challenges.
- Track consistently. Daily, weekly, or monthly—choose a rhythm that makes sense for each KPI.
- Use them in decisions. A KPI only matters if it changes your actions.
- Review and refine. As your business evolves, your key KPIs may shift.
The important part is starting with KPIs that matter—not filling dashboards with numbers you won’t use.
Where an ERP Fits In
Tracking these KPIs manually can quickly become messy. Spreadsheets work for a while, but as soon as you want real-time visibility, errors and delays creep in.
That’s where an ERP system becomes central. It pulls your operations, sales, and production data together, giving you a single place to track and analyze KPIs. With an ERP like Nengatu, these 10 KPIs become easier to measure and act on.
Time to Check Your KPIs
Take a look at your current KPIs.
- Do you already track some of these 10?
- Are they truly helping you make better decisions, or are they just filling a dashboard?
If you’re unsure, it might be time for a fresh look.
👉 Book a call with us, and we’ll help you review your current state and make a plan for upgrading your ERP to track meaningful KPIs.