How do your metrics measure up?

During the 1976-77 NHL season, the Montreal Canadiens compiled a record of 60-8-12, while losing only a single game on home ice. They then capped that magnificent run with a Stanley Cup victory. That season was a total success.

That record of 60 wins stood for more than four decades, only falling this year to the 65-win Boston Bruins (a team that was eliminated in the first round of the playoffs). It was, of course, the Vegas Golden Knights that won the Stanley Cup. So, which of those teams had success?

The relatively smart Albert Einstein once said that failure is success in progress. The slogan is perfect for a coffee mug or T-shirt, but does it reflect real life? And how do you even measure success?

In a manufacturing business, you literally can measure success with a micrometer, probing system, or gauge. But maintaining correct part tolerances is only one small slice of success.

The Big Two measures of success in manufacturing are productivity and profitability. Most other metrics are tethered to these two in some way.

Some manufacturers think that they are inextricably linked; that if you are productive, you will be profitable. However, you may find yourself in a scenario where you are just making bad parts very quickly. In these situations, you lose the machine shop trifecta: time, material, and money.

All metrics aren’t created equal, either. And some may not apply to your shop environment.

Measuring Machine Tool Productivity

At the top of most lists are the three-letter metrics of OEE, MRR, and ROI. If you get these three right, you put yourself in good shape to achieve both the productivity and profitability that you desire.

OEE—overall equipment effectiveness—is an important measure of productivity, especially among large manufacturers with high part volumes. OEE helps plant managers understand capacity utilization, which also includes the metric operating time versus planned downtime. OEE gives a pretty good overview of how long your machines are actively working for you.

Job shops that have various lot sizes and numerous changeovers also understand its importance, but it may not be the single driving force that measures their success.

MRR—material removal rate—is pretty simple to understand. It’s the amount of material you remove over a given time (usually measured in cubic inches per minute). A high MRR creates lower cycle times, which increases throughput. This is a good thing for job shops to keep track of.

ROI—return on investment—is directly related to both OEE and MRR. If they are high, then ROI is low, and profits follow.

If only it was that easy.