To control the work of the enterprise, a special system of indicators is used. With their help, it turns out to explore various aspects of the organization's activities, to identify the weaknesses of the processes. Having developed a number of measures, the company can eliminate the negative trends that have emerged in the manufacturing sector. This allows us to produce competitive, cost-effective products. What performance indicators are used in the analysis? Examples of their calculation will be presented below.
General concept of indicators
Indicators are the results of a qualitative and quantitative assessment of the state of the research object, expressed in numerical form. There are different groups of indicators that allow you to evaluate the effectiveness of the organization from different points of view.
Considering the concept of performance indicators, it should be noted that they are studied in the course of the company's activities, which is associated with the production of goods, the provision of services. The analysis takes into account qualitative and quantitative indicators. The latter are expressed in numerical terms. Some types of indicators are regulated at the legislative level. Others are introduced in the course of the company's activities. Production indicators are grouped as follows:
- normal;
- indicators of time spent;
- human resources;
- production of finished products;
- financials.
Using such groups during the analysis, you can comprehensively assess the efficiency of production, as well as find reserves for improving this process at the enterprise.
The main production indicators are divided into the following groups:
- Large-scale. Demonstrate the level that has been achieved by the company in the course of its production activities. For this, working capital, fixed assets, authorized capital, etc. are examined.
- Absolute. This is the total value that is determined per unit of time, such as profit, turnover, costs, etc.
- Relative. This is the ratio (comparison) of the two indicators of the first two groups.
- Structural. Reflect the share of an individual element in the total amount. Indicators of the production structure are often considered in dynamics, which increases the information content of the methodology.
- Incremental. Reflect the change in indicators for a certain period in relation to the initial value.
Norms
In the course of the study of production performance, norms are often used to determine the required amount of resources and profit. Rationing allows you to periodically monitor the implementation of production programs. To do this, develop a system of maximum permissible values. These criteria must meet the main production indicators. This speaks to the effectiveness of the organization.
Norms of production indicators are divided into groups by types of resources. This allows you to comprehensively evaluate the process of manufacturing products. The following production resources are subject to rationing:
- time;
- human resources;
- material consumption;
- energy resources;
- tools;
- spare parts.
If the listed indicators go beyond the established norms, this indicates non-compliance with the production technology. Such facts lead to the manufacture of lower quality products, an increase in its cost, a decrease in turnover and output. Therefore, during the production cycle, the presented indicators are constantly monitored in order to prevent exceeding the limits of the standards, to maintain the production process at the desired level.
During the assessment of production indicators, the main normalized characteristics are considered. The main ones are:
- unit production time;
- quantity of manufactured products per unit of time;
- number of workers per unit of production serviced equipment;
- output by one worker per unit of time;
- consumption of materials, semi-finished products, raw materials, energy resources that need to be spent on the production of a unit of production.
To perform the calculation, the figures presented are expressed in numbers. This allows you to compare them with the planned value. For example, the rate of output of the quantity of finished products per unit of time for the shop is 150 thousand parts per month. In fact, 155 thousand parts were manufactured. The workshop exceeded the norm by 5,000 parts, which is a positive trend, indicating the correct organization of the production process.
The disadvantage of this technique is the fact that not all indicators can be normalized. At the same time, it takes time to improve the methodology and adjust it to existing production conditions. The creation of standardization criteria should be based on extensive experience, as well as in-depth research.
Established time and number of workers
When evaluating the performance of production products, the time for which it was made is taken into account. This allows you to evaluate the work of the organization's personnel. From this follow the norms of labor productivity, the amount of labor resources spent on the manufacture of products is determined.
The time indicator is considered from different points of view and can be:
- calendar;
- actual;
- private.
The most general, abstract indicator is calendar time. It is divided into a nominal value and a regulated rest period. The latter includes all weekends and public holidays in the period.
The actual run time is less than the nominal value. This is due to the presence of a certain number of days during which employees are officially allowed not to go to work. This includes the period of vacation, sick leave, as well as days allowed for skipping by company managers.
The attendance time is determined by subtracting from the actual rate of absenteeism. To understand how the accounting of production time indicators is carried out, you need to consider an example. So, in October, the employee was on vacation for 7 days. After that, he did not come to work for 1 day.
Calendar time in this case is calculated as follows: 31 days - 9 days off=22 days.
Actual time is calculated as follows: 22 days - 7 days=15 days.
Coach time: 15 days – 1 day=14 days.
The number of workers is determined by the indicators of the placement and payroll staff. In the first case, the number of personnel is determined by jobs in the enterprise. This allows you to determine the maintenance standards for units, machine tools and other equipment, as well as labor productivity.
The payroll staff consists of a placement staff and a reserve of employees for vacation, sick leave, and other regulated rest.
Production of finished products
Production indicatorsconsidered from different positions in the study. This is necessary to identify hidden reserves for the development of various areas. Industrial production can be main, secondary and associated.
The first category includes the result of the company's work, which does not include waste, defective products. It makes up the bulk of the company's sales.
Side products are products that are produced together with the main one. It has a certain value, but is not the purpose of the company's production. For example, in the metallurgical industry, special dust traps are installed on pipes. These products can be used by other enterprises as raw materials.
Sometimes, when manufacturing products from one raw material, several types of products are obtained simultaneously, which are called conjugated.
To analyze the main production indicators, the company keeps records of the product range. With its help, you can explore the main specialization of the company, as well as the direction of its production activities. There can be several different products for each position of the nomenclature. They differ in appearance, design and other characteristics.
To assess the features of production and the dynamics of the performance of all products at the enterprise, their assortment is analyzed. This is a more extended list than the nomenclature. It includes products that differ in size, quality, and other characteristics. Studyrange and nomenclature allows you to study the structure of output.
Costs
Considering the types of production indicators, it is worth noting such an important category as expenses. They are monitored in dynamics, structural changes are examined and compared with the result.
Expenses consist of the cost of purchasing raw materials, materials, energy, tools. This also includes organizational and preparatory procedures, depreciation.
The enterprise may also incur expenses for the repair and maintenance of equipment, administrative apparatus, wages of employees. If the premises for production are rented, certain funds are allocated for it. It is also the cost of the organization. The use of credit leads to the appearance of costs for the payment of interest for the use of this capital. To assess the relationship of costs with the final result, the classification of cost elements is applied. For the analysis of production indicators, they calculate:
- Production costs. This is the cost of all the efforts that have been made in order to obtain finished products (goods or services). These are the costs that arise in the course of production activities, as well as the costs of marketing, advertising, operations for cash and intellectual investments. They are needed in order to make not just products, but goods or services that the buyer needs, for which he is willing to pay.
- Provision costs. They are not aimed at creating certain values. But theynecessary in order to deliver the finished product to the consumer, place an order. This includes staff development costs. In reality, the result of the company's activities largely depends on this item of expenditure. Many organizations seek to minimize such items of expenditure. But here it is important to determine which of them are appropriate to allocate funding, and which can be dispensed with.
- Costs of a security, warning type. They are aimed at preventing the development of adverse events and situations. This cost item is mandatory for all enterprises. This makes it possible to prevent the development of a failure in the field of sales, to predict and prevent the negative consequences of changes in consumer demand in case of incorrect actions of suppliers.
- Unproductive expenses. This is the cost of efforts that do not lead to results. These are such unfavorable factors as equipment downtime, idling of vehicles, etc. This type of expense requires careful study and minimization. To do this, they use new, advanced technologies, conduct a well-thought-out marketing policy, etc.
Cost
Considering the characteristics of production indicators, it is worth noting such an important category as the cost of production. This is the amount of current costs, expressed in monetary terms. They arose at the enterprise in the reporting period and are associated with sales and production. This includes both the results of past labor transferred to products, such as depreciation, the cost of raw materials, other material resources, and the cost ofwages of workers of all categories, other current costs.
Calculation of the cost is based on cost items. To do this, a simple formula is used: production cost=material costs + employee wages + depreciation + other expenses.
Other expenses include industry-wide and general production costs, as well as targeted financial investments. The formula for calculating the cost may include different items of expenditure. They arise exclusively in the course of the production activities of the enterprise. Considering each article of the calculation in dynamics, it is possible to determine the structural changes in this indicator, to draw conclusions about the main activities of the organization.
Considering examples of production indicators, it is worth noting that a special calculation is used to determine net profit, which is an important characteristic of the enterprise's performance:
- Revenue from sales - cost=gross margin.
- Gross Profit – (Selling Expenses + Taxes + Dividends)=Net Income.
The result obtained is used in the course of calculating the profitability of the enterprise, which makes it possible to evaluate the efficiency and feasibility of using the enterprise's resources.
Calculation example
To understand the principle of determining the cost, you need to consider the calculation of production indicators by example. So, the company in the reporting period incurred the following costs:
- raw materials – 50 million rubles;
- semi-finished products - 3 million rubles;
- leftoversmaterials - 0.9 million rubles;
- salary - 45 million rubles;
- energy costs – 6 million rubles;
- bonuses to staff - 8 million rubles;
- deductions to the Pension Fund - 13.78 million rubles;
- costs of the general production group - 13.55 million rubles;
- the cost of tool shops is 3.3 million rubles;
- general business expenses - 17.6 million rubles;
- marriage - 0.94 million rubles;
- shortage within the normal range - 0.92 million rubles;
- shortage above the norm - 2.15 million rubles;
- work in progress - 24.6 million rubles;
At the first stage, material costs are determined: 50 - 0.9=49.1 million rubles.
Further, the costs of semi-finished products, energy are added: 49.1 + 6 + 3=58.1 million rubles.
The next step is to calculate labor costs: 8 + 45 + 58, 1 + 13, 78=124.88 million rubles.
Global production and general business costs are added to the obtained value: 13.55 + 3.3 + 124.88 + 17.6=159.33 million rubles.
From the shortage indicator, which turned out to be above the norm, you need to subtract the result of the normalized shortage: 159.33 + 2.15 - 0.92=160.56 million rubles.
In the reporting period, you need to deduct the amount of costs for construction in progress, as it will be taken into account in the next period: 160, 56 - 24, 6=135.96 million rubles.
The result is the sum of the production cost.
Profitability
Among the indicators of production activity, one of the most important is profitability.
It reflects how efficiently the company used its resources to make a profit. Most often, the following indicators are used during the analysis:
- Profitability of production allows you to assess the feasibility of using the organization's assets in the reporting period. For calculations, the profit indicator is divided by production assets.
- Product profitability - allows you to characterize the degree of efficiency of the use of resources in the production process. To do this, the sales proceeds are divided by the cost of production.
Efficiency in the use of individual cost items
To assess the impact on the overall result of private production indicators, their effectiveness is determined in the context of certain cost items. So, it is possible to determine whether material, labor resources, production assets, etc. were used correctly in the reporting period.
Private performance indicators are used for this. So, to determine the efficiency of the use of fixed assets, the coefficients of capital intensity, capital productivity are calculated. To determine the results of the use of materials and raw materials, indicators of material consumption and material return are used. Similar indicators are calculated in the field of labor resources:
- Return on labor costs=volume of finished goods/labor costs.
- Labor intensity=labor cost/production.
A few more indicators
In progressanalysis of the company's core business can use different performance indicators. Their choice depends on the objectives of the study. In addition to the above indicators, analysts can calculate:
- Productivity - defined as the ratio of profit to resources spent on core activities.
- Solvency - compares the amount of debt with the results of profits.
- Turnover - compares inventory with sales in the reporting period.
