How does your manufacturing stack up?
By Staff -- Modern Materials Handling, 5/1/1999
There are several measures you can use to determine how your manufacturing operations compare to those of your peers and competitors.In the fourth annual Pulsemark survey, various types of manufacturers from engineer-to-order firms to producers of discrete parts were evaluated on several counts. Here's a rundown on some of the findings of the study, sponsored by the National Association of Manufacturers and consultants McGladrey & Pullen.
Product lead time. Manufacturers are beginning to recognize the growing importance of delivery speed in their markets. Short lead times are seen as an order-winning, competitive advantage, says the report.
Average product lead time for discrete manufacturers is 11 days with 5 days showing up as the shortest. The study calls 40 days of lead time "poor".
Manufacturing cycle time. "Bottlenecks, excessive open shop orders, and inefficient shop floor planning and control contribute to inflated manufacturing cycle times," concludes the survey. "Any company with a 3:1 ratio between overall product lead time and manufacturing cycle time should examine the internal processes used to accept, schedule, and build a product."
Delivery performance. This is now considered a qualifier for obtaining orders. For discrete manufacturers, the average on-time delivery performance is 91%. An 85% rating is considered poor while 99% is best.
Finished goods inventory turns. "Finished goods inventory should be viewed as expenses rather than assets," concludes Pulsemark. The study suggests that manufacturers are in the best position when they try to balance production and demand, not production and capacity.
For more information, about the complete benchmark study, visit www.pulsemark.mcgladrey.com.
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