MES & Shop FloorFree referencePDF, Excel, Word exportJob Shop Manufacturing

Job Shop KPI Definitions and Formulas Reference

Most shops track on-time delivery and not much else, usually because nobody agreed on the formulas. This table gives a consistent definition for each common job shop KPI and points to where the data lives in an ERP.

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KPI	Area	Formula	Unit	Typical ERP data source
On-time delivery (OTD)	Delivery	Lines shipped on or before promise date / total lines shipped x 100	%	Sales order lines and shipment dates
Average days late	Delivery	Sum of days late on late lines / number of late lines	days	Promise date versus ship date
Lead time	Delivery	Ship date minus order received date, averaged	days	Sales order and shipment
Machine utilization	Capacity	Productive spindle or run hours / available hours x 100	%	Shop floor time collection and work center calendar
Work center load	Capacity	Scheduled hours / available hours x 100	%	Open job operations and capacity calendar
Setup ratio	Capacity	Setup hours / (setup hours + run hours) x 100	%	Actual time by operation
Estimate accuracy (hours)	Estimating	(Actual hours - estimated hours) / estimated hours x 100	%	Job estimate versus actual time
Quote hit rate (count)	Sales	Quotes won / quotes issued x 100	%	Quote status history
Quote hit rate (value)	Sales	Value of quotes won / value of quotes issued x 100	%	Quote totals by status
Quote turnaround	Sales	Quote issued date minus request received date, averaged	days	Quote header dates
Scrap rate	Quality	Scrap quantity / total quantity started x 100	%	Operation scrap reporting
First pass yield	Quality	Good parts first time / parts started x 100	%	Inspection records
Customer return rate	Quality	Parts returned / parts shipped x 100	%	RMA or return records
Cost of poor quality	Quality	Scrap cost + rework cost + returns cost + concessions	currency	Non-conformance and job costs
WIP turns	Inventory	Cost of goods shipped over a period / average WIP value	turns	Job costing and ledger
Open jobs aging	Inventory	Count of open jobs by days since release	count	Job header release date and status
Material variance	Costing	Actual material cost - estimated material cost	currency	Job material issues versus estimate
Job margin	Costing	(Invoiced value - actual job cost) / invoiced value x 100	%	Job costing and invoicing
Revenue per employee	Financial	Annual revenue / average headcount	currency	Ledger and HR headcount
Outside process on-time	Purchasing	Outside operations returned by due date / outside operations returned x 100	%	Purchase order receipts
Supplier on-time delivery	Purchasing	PO lines received by promise date / PO lines received x 100	%	Purchase order receipts

Define each KPI once in writing, including exactly what counts as a late line or an available hour, before you build dashboards.

KPI dashboard from your ERP

Tell us your ERP and we will outline how these KPIs could be queried without manual spreadsheets.

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How to use the table

Pick five to eight KPIs, not all twenty. Search by area, read the formula, then check whether your ERP captures the required data reliably. A KPI built on data that people only sometimes enter will mislead. Export the rows you adopt and attach them to your ERP requirements or dashboard specification.

Start with OTD, utilization, estimate accuracy and scrap rate
Write down your own rule for what counts as late
Review the same KPIs monthly with the same definition

Definitions that trip people up

On-time delivery can be measured against the customer's request date or your promise date, and the two give very different numbers. Utilization can use calendar hours, scheduled shift hours or available machine hours. Pick one definition and publish it. Estimate accuracy is most valuable by operation or work center, not only per job.

Data quality comes first

Time and quantity entries drive nearly every KPI here. If operators enter time at the end of the week or scrap is not reported by reason, the numbers will be wrong. Fixing the data capture step usually adds more value than a better dashboard.

Frequently Asked Questions

What is a good on-time delivery rate for a job shop?

Targets vary by customer and industry, but many shops aim for the high ninety percent range. What matters more is a consistent definition and tracking trend by customer and work center.

How do I calculate machine utilization?

Divide productive run hours by available hours for the period. Decide whether available hours means calendar, scheduled shift or planned production hours, and keep the same choice every month.

What is estimate accuracy?

It compares actual hours or cost on a job against what you quoted. Tracking it by operation shows which routings or machines are consistently under-quoted.

Which KPIs need shop floor data collection?

Utilization, setup ratio, estimate accuracy and scrap rate all depend on timely time and quantity entries from the floor. Financial KPIs can come from the ledger alone.

If you want these KPIs pulled live from your ERP without building reports by hand, Netray can set up read-only questions and dashboards over your data.

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