Resource Library

Raw material inventory turns

This measure calculates raw material inventory turns by dividing cost of goods sold (COGS) for the year by the average value of month-end raw material inventory for the most…

Raw material inventory days of supply

This measure determines raw material inventory days of supply, which is calculated as the value of raw materials inventory divided by the "value of transfers divided by 365…

Production schedule attainment during a primary products planning period

This measure calculates average production schedule attainment for a planning period for primary (or high level) products. It is part of a set of Process Efficiency measures…

Engineering change order (ECO) cycle time in days

This measure helps companies calculate the average number of days elapsed for engineering change order (ECO) cycle time. An ECO is a documented outline of a proposed change…

Labor costs as a percentage of cost of goods sold

This measure calculates the percentage of cost of goods sold (COGS) that comes from labor costs. COGS represents the cost of purchasing raw materials and manufacturing…

Turnover rate for manufacturing personnel

This measure determines the annualized rate of manufacturing employee departures as a percentage of total production workforce. A high turnover rate often indicates that…

Primary product manufacturing cycle time in hours

This measure calculates the average manufacturing time (in hours) for high level product that a company manufactures. It is a Cycle Time measure that helps companies analyze…

Material costs as a percentage of cost of goods sold

This measure calculates the percentage of cost of goods sold (COGS) that comes from material costs. COGS represents the cost of purchasing raw materials and manufacturing…

Overhead costs as a percentage of cost of goods sold

This measure calculates the percentage of cost of goods sold (COGS) that comes from overhead costs. Overhead costs refer to those that an organization cannot identify as…

Total cost of manufacturing per $1,000 revenue

This measure helps companies calculate the total cost of manufacturing per $1,000 revenue. It is part of a set of Cost Effectiveness measures that help companies understand…

Warranty costs (repair and replacement) as a percentage of sales

This measure calculates warranty costs (repair and replacement) as a percentage of sales. Warranty costs include materials, labor, and problem diagnosis for products returned…

Work-in-process (WIP) inventory days of supply

This measure determines work-in-process (WIP) inventory days of supply, which is calculated as annual average WIP inventory value (i.e. the value of all materials, components…

Work-in-process (WIP) inventory turns

This asset management measure is typically calculated as the cost of goods sold (COGS) for the year divided by the average on-hand work-in-process material value (i.e. the…

Scrap and rework costs as a percentage of cost of goods sold

This measure calculates the total cost of material that is added into production but is not part of a finished product as a percentage of cost of goods sold (COGS). COGS…

Value of plant shipments per manufacturing employee

This measure calculates the total annual value of plant shipments per manufacturing employee. It is part of a set of Process Efficiency measures that help companies optimize…