Manufacturing controllable cost as a percentage of revenue

This measure calculates all costs under direct control of the manufacturing operation— which includes direct labor and expenses, asset charges, and excess material and packaging costs—as a percentage of revenue. It is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "produce/manufacture/deliver product."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure ID:
100851
Total Sample Size:
224 All Companies
Performers:
25th
-
Median
-
75th
-
Key Performance
Indicator:
Yes

Compute this Measure

Units for this measure are percent.

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(Manufacturing controllable costs / Total business entity revenue) * 100

Key Terms

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Total Annual Revenue/Net Revenue

Total annual revenue is net proceeds generated from the sale of products or services. This should reflect the selling price less any allowances such as quantity, discounts, rebates and returns. If your business entity is a support unit and therefore does not directly generate revenue, then provide the revenue amount for the units you support. For government/non-profit organizations, please use your non-pass-through budget. For insurance companies the total annual revenue is the total amount of direct written premiums, excluding net investment income. Note: Business entity revenue needs to only include inter-company business segment revenue when the transactions between those business segments are intended to reflect an arm's length transfer price and would therefore meet the regulatory requirements for external revenue reporting.

Manufacturing Controllable Costs

Manufacturing controllable costs are defined as all costs under direct control of the manufacturing operation. This includes direct labor and expenses, asset charges, and excess material and packaging costs. Raw material and finished goods packaging are not included.

Cost Effectiveness

Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.

Median

The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Measure Scope

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Cross Industry (7.3.1)

  • 4.3.1 - Schedule production (10303)
    • 4.3.1.1 - Model and simulate plant (19563)
    • 4.3.1.2 - Generate line level plan (10306)
    • 4.3.1.3 - Generate detailed schedule (10307)
    • 4.3.1.4 - Schedule production orders and create lots (10308)
    • 4.3.1.5 - Schedule preventive (planned) maintenance (preventive maintenance orders) (10315)
    • 4.3.1.6 - Schedule requested (unplanned) maintenance (work order cycle) (10316)
    • 4.3.1.7 - Release production orders and create lots (10309)
  • 4.3.2 - Produce/Assemble product (10304)
    • 4.3.2.1 - Manage raw material inventory (10310)
    • 4.3.2.2 - Execute detailed line schedule (10311)
    • 4.3.2.3 - Report maintenance issues (10319)
    • 4.3.2.4 - Rerun defective items (10313)
    • 4.3.2.5 - Monitor and optimize production process (19566)
      • 4.3.2.5.1 - Automate and control plant (19567)
      • 4.3.2.5.2 - Perform advanced process control (19568)
      • 4.3.2.5.3 - Perform real-time optimization (19569)
      • 4.3.2.5.4 - Manage plant alarms and alerts (19570)
    • 4.3.2.6 - Assess production performance (10314)
  • 4.3.3 - Perform quality testing (10369)
    • 4.3.3.1 - Calibrate test equipment (10318)
    • 4.3.3.2 - Perform testing using the standard testing procedure (10374)
    • 4.3.3.3 - Manage quality samples (20956)
    • 4.3.3.4 - Record test results (10375)
    • 4.3.3.5 - Track and analyze non-conformance trends (12045)
    • 4.3.3.6 - Perform root cause analysis (12046)
  • 4.3.4 - Maintain production records and manage lot traceability (10370)
    • 4.3.4.1 - Determine lot numbering system (10376)
    • 4.3.4.2 - Determine lot use (10377)