Must-Know Production Planning Kpis [Latest Report]

Highlights: Production Planning Kpis

  • 1. Production Capacity Utilization
  • 2. Cycle Time
  • 3. On-time Delivery Rate
  • 4. Schedule Attainment
  • 5. Work in Process (WIP) Inventory
  • 6. Yield Rate
  • 7. First Pass Yield
  • 8. Scrap Rate
  • 9. Equipment Downtime
  • 10. Changeover Time
  • 11. Labor Productivity
  • 13. Production Cost per Unit
  • 14. Return on Assets (ROA)
  • 15. Backorder Rate

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In today’s highly competitive and fast-paced business environment, effective production planning is crucial for manufacturing companies to optimize their resources, minimize costs, and achieve the highest level of efficiency. Key Performance Indicators (KPIs) play a vital role in measuring the success of production planning, allowing businesses to evaluate their performance and make well-informed decisions to drive continuous improvement.

This blog post delves into the world of Production Planning KPIs, discussing their importance, the various types of KPIs that matter, and how to implement them for maximum impact on your organization’s bottom line. Prepare to elevate your production planning strategy and gain a competitive advantage in the marketplace by mastering these essential KPIs.

Production Planning KPIs You Should Know

1. Production Capacity Utilization

Measures the extent to which the available production capacity is being used. Higher utilization rates indicate efficient use of resources.

2. Cycle Time

The time it takes to complete a single production cycle, from starting the process to the finished product. Shorter cycle times usually indicate better efficiency.

Higher rates reflect better adherence to plans.

3. On-time Delivery Rate

Indicates the percentage of products that are delivered on or before the committed delivery date. A higher rate shows good planning and supply chain efficiency.

4. Schedule Attainment

Monitors the percentage of planned production runs that are completed on or before the targeted completion date. Higher rates reflect better adherence to plans.

5. Work in Process (WIP) Inventory

Measures the amount of unfinished goods during the production process. Lower WIP inventories may indicate smoother production flows and better operation management.

6. Yield Rate

Reflects the percentage of products that pass quality control checks and don’t require rework. A higher yield rate signifies better production quality and lower waste.

7. First Pass Yield

Evaluates the percentage of products that are manufactured correctly on the first attempt without any rework or scrap. Higher first pass yields denote better production processes and fewer defects.

Lower scrap rates typically indicate better production efficiency and material utilization.

8. Scrap Rate

Monitors the percentage of materials that are wasted or unusable during the production process. Lower scrap rates typically indicate better production efficiency and material utilization.

9. Equipment Downtime

Measures the time equipment is non-operational due to breakdowns or planned maintenance. Shorter downtime can help ensure higher production efficiency and capacity utilization.

10. Changeover Time

The time required to switch a production line from one product type to another. Reducing changeover times can help increase flexibility and productivity.

11. Labor Productivity

Assesses the output produced per labor hour. Higher labor productivity indicates more efficient use of human resources and better allocation of tasks.

12. Overall Equipment Effectiveness (OEE)

A measure of how well a manufacturing operation is utilized, combining availability, performance, and quality. Higher OEE values indicate higher production efficiency and resource use.

13. Production Cost per Unit

Calculates the cost of manufacturing a single unit of product, including material, labor, and overhead costs. Lower production costs per unit may signal better production planning and cost management.

14. Return on Assets (ROA)

Compares a company’s net income to its assets to determine how effectively assets are being used to generate profit. A higher ROA may indicate better production planning and resource management.

15. Backorder Rate

Indicates the percentage of unfulfilled orders due to stockouts or production delays. Lower backorder rates typically reflect better production planning and inventory management.

Production Planning KPIs Explained

Production Planning KPIs are essential for evaluating the efficiency and effectiveness of a manufacturing process. Production Capacity Utilization shows how well available resources are being utilized, and higher rates demonstrate efficient resource use. Cycle Time measures the time it takes to complete a single production process, with shorter times representing better efficiency.

On-time Delivery Rate and Schedule Attainment both monitor the efficiency of planning and supply chain management. Work in Process (WIP) Inventory reflects the smoothness of production flows, while Yield Rate and First Pass Yield indicate production quality and waste levels. Scrap Rate and Equipment Downtime both have implications for production efficiency and material utilization. Changeover Time affects flexibility and productivity, while Labor Productivity and Overall Equipment Effectiveness (OEE) assess the efficient use of human resources and equipment.

Production Cost per Unit and Return on Assets (ROA) gauge production planning and cost management effectiveness. Lastly, Backorder Rate highlights the efficiency of production planning and inventory management in fulfilling customer orders. Overall, these KPIs provide valuable insights into the strengths and weaknesses of a production process, helping businesses optimize their operations and improve their bottom line.


In conclusion, implementing Production Planning KPIs is vital for any manufacturing business to thrive in today’s competitive market. By consistently monitoring these performance indicators, businesses can streamline their processes, reduce waste, minimize lead times, and achieve greater customer satisfaction. Additionally, KPIs assist companies in making well-informed decisions aimed at improving their production capabilities and reaching operational excellence.

As we have discussed, the key Production Planning KPIs to focus on include efficiency, effectiveness, flexibility, and quality. By investing time and effort into developing, tracking, and continuously refining these KPIs, organizations can maintain a competitive edge in the manufacturing industry and ensure the long-term success of their operations.


What are the essential Production Planning KPIs that a manufacturing company should track?

The key Production Planning KPIs include Overall Equipment Effectiveness (OEE), Schedule Adherence, Production Yield, Mean Time Between Failures (MTBF), and Labor Productivity. Tracking these KPIs helps in gauging production efficiency and identifying room for improvement.

How is the Overall Equipment Effectiveness (OEE) KPI calculated, and why is it important?

OEE is calculated by multiplying Availability, Performance, and Quality ratios. It involves measuring equipment operational performance, schedule adherence, and the quality of the products. A high OEE indicates that the production process is efficient and effective, making it a critical KPI for production planning.

Why is Schedule Adherence significant as a Production Planning KPI?

Schedule Adherence measures the alignment between planned production and actual production. It indicates how well an organization adheres to its production schedules, reflecting its overall production efficiency. High Schedule Adherence ensures on-time deliveries, fewer production backlogs, and better customer satisfaction.

How does measuring Production Yield help in improving a manufacturing process?

Production Yield refers to the number of quality products manufactured divided by the total products produced. By tracking this KPI, companies can monitor the efficiency of the production process, identify areas of inefficiency, and address issues that may impact product quality. This ultimately leads to reduced waste and improved production efficiency.

How can monitoring Labor Productivity help a company optimize its production processes?

Labor Productivity measures the amount of output produced per labor hour. By keeping track of this KPI, companies can gauge the effectiveness of their workforce and evaluate their production methods. Knowing these insights allows companies to identify potential improvements, implement workforce training, and allocate resources more effectively, maximizing the production process's effectiveness.

How we write our statistic reports:

We have not conducted any studies ourselves. Our article provides a summary of all the statistics and studies available at the time of writing. We are solely presenting a summary, not expressing our own opinion. We have collected all statistics within our internal database. In some cases, we use Artificial Intelligence for formulating the statistics. The articles are updated regularly.

See our Editorial Process.

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