Key performance indicators as a tool for evaluating efficiency of production processes

Abstract

This paper deals with the topic of Key Performance Indicators as a tool for evaluating the efficiency of production processes. In the current competitive market environment, manufacturing enterprises face increasing demands for maximizing efficiency and performance. Traditional financial indicators often fail to capture the complexity of process improvement, necessitating a shift towards more comprehensive evaluation methods. Key Performance Indicators (KPIs) have become essential tools for assessing production efficiency, providing a framework for monitoring, measuring, and optimizing various production activities. This paper examines the implementation and benefits of KPIs in an engineering company specializing in CNC machining of metallic and non-metallic components. The research outlines a step-by-step algorithm for KPI integration, including process mapping, identification of process owners, data collection, and performance evaluation. The study specifically focuses on the KPI "number of non-conformities" to assess production stability over a 16-month period, using internal parts per million (ppm) metrics. The results demonstrate the role of KPIs in improving transparency, enhancing decision-making quality, and supporting continuous improvement initiatives. Furthermore, the paper discusses the importance of adapting to market trends, such as technological innovations and legislative changes, to maintain a competitive advantage. The findings indicate that the strategic use of KPIs allows companies not only to track operational performance but also to proactively respond to industry changes, thus fostering sustainable growth.