Discover the 21 industrial performance indicators that are essential for optimizing your production site! Find out how these KPIs can help you improve productivity, quality, costs, profitability and efficiency. human resourcessupply chain, safety and profitability.
1. Control your human resources with these indicators industrial performance
The effective human resources management is a fundamental pillar of industrial performance. Motivated and committed employees are the key to a company's success.
1. Absenteeism rate
The absenteeism rate measures the frequency of unplanned absences within your teams. It reveals problems that are often invisible: unhappiness at work, overwork, difficult conditions or lack of recognition.
Formula : Absenteeism rate = (Number of days absent / Number of days theoretically worked) x 100
A rate in excess of 5 % should raise the alarm. Every unanticipated absence disorganizes lines, overloads the colleagues present and causes production delays. Monthly monitoring of this indicator enables us to identify seasonal trends and the teams most affected, so that we can take action before the situation deteriorates.
On the 300 industrial sites equipped by Mercateam, By monitoring absenteeism in real time, production managers can react more quickly to weak signals and stabilize their teams over time.
2. Turnover
Turnover measures the rate at which employees leave and rejoin your company. A high turnover rate isn't just an HR problem: it's a direct drag on performance.
Formula: Turnover = (Number of departures over the period / Average workforce) x 100
Each departure is costly. Recruitment, integration, job training, loss of accumulated know-how... Not to mention the impact on the morale of the remaining teams. To reduce this rate, we must first understand the reasons for departures. Regular professional interviews and a structured skills management help to enhance career paths and retain talent.
3. Employee satisfaction index
This index assesses your employees' level of well-being and commitment. It is generally measured by quarterly or half-yearly internal surveys.
Formula: Average score of responses to satisfaction surveys (scale from 1 to 10 or in %)
Satisfied employees are more productive, more involved and less likely to be absent. This link is not theoretical: it can be verified in the field. Gathering feedback from your teams on a regular basis - and, above all, taking action on identified irritants - creates a virtuous circle that ripples through the entire production chain.
The 3 productivity metrics that really count
Productivity is more than just «producing faster». It measures the efficiency with which your resources - human and material - are mobilized to create value. Three indicators structure this vision.
4. Labor productivity
Labor productivity measures the volume of production achieved per unit of work. It is generally calculated per hour worked or per operator.
Formula: Labor productivity = Quantity produced / Number of hours worked
High productivity means that your teams and processes are well calibrated. Conversely, a drop may signal bottlenecks, training problems or chronic understaffing. This indicator is best cross-referenced with absenteeism rates and the assignment schedule to understand the root causes of a discrepancy.
5. Takt Time
Takt time is not a manufacturing time. It's the rate of production needed to respond exactly to customer demand. It sets the ideal tempo for your line.
Formula : Takt Time = Available production time / Customer demand over the period
If your Takt Time is 60 seconds, you have to release a part every 60 seconds to meet your orders. Producing faster generates overstock. Producing more slowly creates delays. Takt Time helps you calibrate your production rate to market reality, not to a disconnected theoretical capacity.
6. Cycle time
Cycle time measures the actual time required to manufacture a unit, from start to finish.
Formula : Cycle time = End of production time - Start of production time
Comparing actual cycle time with Takt Time immediately reveals whether your production rate is in line with demand. Cycle times above Takt Time mean you can't keep up without overtime or additional resources. This is a warning signal that needs to be dealt with as a priority.
Your 3 benchmarks for quality and performance
Quality determines everything else. A non-compliant product means wasted material, lost time and a potentially unhappy customer. These three KPIs give you a clear picture of your quality performance.
Boost your TRS with qualified operators in the right place
The majority of quality and output discrepancies are due to poorly staffed positions. Visualize the real skills of each operator and assign the right people to the right jobs.
Book a demo7. Synthetic rate of return (SRR)
The TRS - or OEE in English - is the king of industry indicators. Standardized by AFNOR since 2002 (standard NFE 60-182), it measures the overall efficiency of a piece of equipment by combining three dimensions: availability, performance and quality.
Formula : TRS = Availability rate x Performance rate x Quality rate
Let's take an example. If your availability is 90 %, your performance 85 % and your quality 95 %, your OEE is 72.7 %. An OEE of over 85 % is considered «world class». The majority of industrial sites are between 55 % and 75 %.
The power of the OEE lies in its breakdown. A low OEE doesn't say much on its own, but by analyzing its three components, you can identify exactly where your losses lie: machine stoppages, slowdowns or quality defects.
8. Scrap rate
The scrap rate represents the proportion of your production that does not pass quality control and must be scrapped.
Formula : Scrap rate = (Scrap quantity / Total quantity produced) x 100
Each rejected part consumes raw material, energy and machine time without generating any value. A rising scrap rate points to a problem with set-up, raw materials or operator skills. Daily monitoring of this indicator, item by item, enables you to quickly pinpoint sources of non-quality.
9. First-pass yield (FPR)
Also known as FPY (First Pass Yield), RPP measures the percentage of compliant products from the first pass through production, without retouching or reworking.
Formula : RPP = (First-pass parts / Total parts produced) x 100
This indicator is more demanding than the scrap rate alone, as it also counts reworked parts. A part that has been successfully reworked does not appear in scrap, but it has consumed additional time and resources. RPP reveals the true quality of your processes, without the mask of rework.
Control your production costs
Cutting costs without sacrificing quality is the equation that every production manager must solve. These three operational financial indicators will help you to identify the cost items you need to optimize.
10. Production cost per unit
Unit production cost measures the total amount spent to manufacture one unit of finished product, including raw materials, labor, energy and equipment depreciation.
Formula : Unit cost = Total production costs / Number of units produced
A high unit cost is a sign of inefficiency: wasted materials, idle time, poorly calibrated processes or excessive energy consumption. Tracking this indicator over time enables you to measure the real impact of your continuous improvement actions.
11. Cost of non-quality
The cost of non-quality aggregates all expenses linked to production defects: scrapped parts, rework, product recalls, customer complaints and loss of image.
Formula : Non-quality costs = Scrap costs + Rework costs + Return costs + Complaints costs
We distinguish between visible costs (discarded parts, hours of rework) and invisible costs (loss of customer confidence, time spent handling complaints). The latter are often much higher than the former. Measuring the cost of non-quality in euros, not just as a percentage, makes the issue tangible for the whole organization.
12. Preventive maintenance costs
This indicator tracks the expenses incurred to keep your equipment in optimal working order, before a breakdown occurs.
Formula : Maintenance ratio = Cost of preventive maintenance / Total cost of maintenance (preventive + corrective)
The aim is not to reduce preventive maintenance, but to increase its share in relation to corrective maintenance. An 80/20 split in favor of preventive maintenance is a common benchmark. Every euro invested in preventive maintenance avoids several euros in emergency repairs, line stoppages and lost production.
Equipment maintenance and reliability
Your machines are the heart of your production tool. Their reliability directly affects your ability to meet your commitments. Three indicators enable you to monitor the health of your equipment.
Reduce your MTTR with authorized technicians and available
Keep track of your maintenance teams' authorizations in real time, anticipate renewals and assign the right profiles to the right jobs to limit line stoppages.
Book a demo13. GRR (Total Rate of Return)
The TRG is the big brother of the TRS. It measures the performance of the production tool by integrating the total opening time, not just the time required.
Formula : TRG = Useful time / Opening time
Whereas the TRS focuses on the time when the machine is supposed to be producing, the TRG takes into account all the time available, including periods of voluntary non-use (planned maintenance, breaks, absence of orders). It gives a broader view of the actual utilization of your industrial assets.
14. MTBF (mean time between failures)
MTBF (Mean Time Between Failures) measures the average length of time a piece of equipment remains operational between two breakdowns. The higher the MTBF, the more reliable your machine.
Formula : MTBF = Total uptime / Number of failures
A declining MTBF is a warning signal: equipment is aging, preventive maintenance may be inadequate, or operating conditions may have changed. Tracking this indicator machine by machine enables you to prioritize replacement or renovation investments.
15. MTTR (mean time to repair)
MTTR (Mean Time To Repair) measures the average time needed to get equipment back up and running after a breakdown.
Formula : MTTR = Total downtime for repairs / Number of breakdowns
A high MTTR points to several possible causes: lack of spare parts, insufficiently trained technicians, or diagnostics that take too long. The challenge is to reduce this time to minimize the impact of each breakdown on production. The MTBF / MTTR combination gives a complete picture of the reliability of your machinery.
3 indicators to secure your supply chain
Performance doesn't stop at the end of your lines. The ability to deliver the right product, at the right time, in the right quantity, determines your customers' satisfaction. These three KPIs measure the performance of your supply chain.
16. Lead time
Lead time measures the total time between receipt of an order and delivery of the finished product to the customer.
Formula : Lead time = Actual delivery date - Date order received
Reducing lead time improves your responsiveness to fluctuations in demand. But beware: trying to reduce lead time at all costs without making upstream processes more reliable risks creating non-quality. The right approach is to break down lead time by stage (procurement, production, dispatch) to identify bottlenecks.
17. Customer service rate (OTD)
OTD (On Time Delivery) measures your ability to deliver orders within the time promised to the customer.
Formula : OTD = (Number of orders delivered on time / Total number of orders) x 100
An OTD of less than 95 % weakens customer relations. Beyond meeting deadlines, this indicator reveals the reliability of your entire chain: planning, production, quality control and shipping. It is an output indicator that summarizes the performance of all upstream links.
18. Inventory turnover rate
Stock rotation measures the frequency with which your stock is renewed over a given period.
Formula : Inventory turnover = Cost of goods sold / Average inventory
High turnover means that your stock is not asleep: it's circulating, turning into sales. Conversely, low turnover ties up capital and increases the risk of obsolescence. The right balance depends on your sector and your lead times, but the trend should always be towards greater fluidity.
Finance, safety and global performance
These last three indicators take a step back. They measure the profitability of your business, the safety of your teams and the return on your investments. These are the KPIs that your management looks at in steering committee meetings.
19. Gross profit margin
Gross margin measures the profitability of your production activity before indirect costs (overheads, sales and administrative expenses).
Formula : Gross margin = ((Sales - Cost of production) / Sales) x 100
This is your plant's financial thermometer. A falling gross margin, while production volume is stable, reveals cost drift or sales price erosion. Tracking this indicator month by month, product by product, enables you to fine-tune your profitability.
20. Work-related accident frequency rate
This indicator measures the number of workplace accidents in relation to the volume of hours worked. Safety is not just another KPI: it's an absolute priority.
Formula : Frequency rate = (Number of lost-time accidents x 1,000,000) / Number of hours worked
Beyond the human dimension, accidents have a direct impact on production: line stoppages, investigations, reorganization of teams. A high accident frequency rate means that working conditions need to be urgently reviewed. Monitoring this indicator, coupled with analysis of near-accidents, enables us to move from a reactive to a preventive approach.
21. ROI of industrial equipment
Return on equipment investment measures the profitability of your investment in machines and production lines.
Formula : ROI = ((Gains generated by equipment - Total cost of equipment) / Total cost of equipment) x 100
Before investing in new equipment, calculating forecast ROI helps to prioritize projects. After investment, monitoring actual ROI enables you to validate (or not) initial hypotheses. It's a steering indicator that informs the strategic decisions of your investment committee.
How do you choose the right indicators for your plant?
Having 21 KPIs at your disposal doesn't mean you have to track them all simultaneously. The most common pitfall in production is multiplying KPIs until no one is looking at them anymore.
The method SMART remains the benchmark for selecting your indicators. Each KPI selected must be Specific (linked to a precise objective), Measurable (quantifiable without ambiguity), Attainable (the objective set is realistic), Relevant (it informs a decision) and Temporal (monitored over a defined period).
In practice, start by identifying your 3 to 5 priority issues. If your main problem is scrap rate, focus on OEE, RPP and cost of non-quality. If it's team disorganization, track absenteeism, turnover and labor productivity. The mistake is trying to measure everything at once.
A point that is often underestimated: KPIs are only worthwhile if they are understood and followed by the teams in the field. KPIs posted in an office but never consulted by operators make no difference. Visual display in the field, daily updating and team involvement in gap analysis make all the difference between a decorative dashboard and a genuine management tool.
Environmental and CSR indicators (carbon footprint per unit, water consumption, recycling rate) are playing an increasingly important role in industrial dashboards. By 2025, they will no longer be the preserve of large groups: industrial SMEs and SMIs will gradually be incorporating them into their management processes, driven by regulatory requirements and the expectations of their principals.
Turn your KPIs into levers for action
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Summary table of the 21 indicators
| N. | Indicator | Category | Summarized formula |
|---|---|---|---|
| 1 | Absenteeism rate | HR | Days absent / Days worked x 100 |
| 2 | Turnover | HR | Departures / Average workforce x 100 |
| 3 | Employee satisfaction | HR | Average survey score (1-10) |
| 4 | Labor productivity | Productivity | Quantity produced / Hours worked |
| 5 | Takt Time | Productivity | Time available / Customer demand |
| 6 | Cycle time | Productivity | End time - Start time |
| 7 | TRS (OEE) | Quality | Availability x Performance x Quality |
| 8 | Scrap rates | Quality | Scrap quantity / Total quantity x 100 |
| 9 | RPP (FPY) | Quality | Compliant 1st pass / Total x 100 |
| 10 | Unit cost | Costs | Total costs / Units produced |
| 11 | Cost of non-quality | Costs | Scrap + Rework + Returns + Claims |
| 12 | Preventive maintenance | Costs | Preventive maintenance costs / Total maintenance costs |
| 13 | TRG | Maintenance | Operating time / Opening time |
| 14 | MTBF | Maintenance | Uptime / Number of faults |
| 15 | MTTR | Maintenance | Repair downtime / Number of breakdowns |
| 16 | Lead time | Supply chain | Delivery date - Order date |
| 17 | OTD (service rate) | Supply chain | On-time orders / Total orders x 100 |
| 18 | Stock rotation | Supply chain | Cost of goods sold / Average inventory |
| 19 | Gross margin | Finance | (Sales - Production costs) / Sales x 100 |
| 20 | Accident frequency rate | Security | Accidents x 1,000,000 / Hours worked |
| 21 | ROI equipment | Finance | (Earnings - Cost) / Cost x 100 |
