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

Abstract

This paper deals with the topic of Key PerformanceIndicators as a tool for evaluating the efficiencyof production processes. In the current competitivemarketenvironment, manufacturing enterprises faceinreasing demands for maximizing efficiency and performance. Traditionalfinancial indicators often fail to capture thecomplexity of process improvement, necessitating a shift towards more comprehensive evaluation methods. Key Performance Indicators (KPIs) have become essential tools for assessing productionefficiency, providing a framework for monitoring,measuring, and optimizing various production activities. This paperxamines the implementation and benefits of KPIsinan engineering company specializing in CNC machining of metallicnda non-metallic components. The research outlinesatep-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 asseproduction stability over a 16-month period, using internalpartsper million (ppm) metrics. The results demonstratethe role of KPIs in improving transparency, enhancing decision-making quality, and supporting continuous improvementinitatives. Furthermore, the paper discusses the importanceofadapting to market trends, such as technologicalinnovations and legislative changes, to maintain a competitive advantge. The findings indicate that the strategic ofuseKPIs allows companies not only to track operational performancebutalso to proactively respond to industry changes,thus fostering sustainable growth.