Oana Boteanu Staff asked 9 years ago
This indicator is for measuring the actual production as a % of the scheduled production, also known as the absolute variance. This KPI shows the % variance between the two figures of actual and scheduled production.
If this KPI is either low or high, it has an effect on the company, both in terms of investment and performance. However, the company will aim to either keep this variance low or close to zero.
For instance, if a shoe manufacturer signed a contract with a supplier for 10000 pairs of shoes, however, the actual production was of 9500 pairs, the contract may not go forward or may be affected, as the supplier is expecting 10000 pairs of shoes.
Formula:
(Scheduled Production-Actual Production)/Scheduled Production x 100
KPI Unit: %
KPI Time Frame: update quarterly or annually
Example:
A refrigeration manufacturing company is measuring the manufacturing scheduled adherence for the overall production over a 3 months period.
This is calculated as below:
(Scheduled Production-Actual Production)/Scheduled Production x 100
Scheduled Production: 1500
Actual Production: 1000
Manufacturing Schedule Adherence:
(1500-1000)/1500 x 100 = 33.3 %
Hence, the manufacturing variance is 33.3%, in other words the manufacturing company has produced 33.3% less refrigerators than scheduled.
