Best SMART Goals For Manufacturing
Today I want to discuss production goals examples. More specifically, SMART goals for manufacturing businesses that support critical success factors in the manufacturing industry.
Having nearly 30 years of experience in various manufacturing operations, I’d love to share some of the things I learned. So, let’s get moving; then, you can start improving.
Production Goals Examples For Manufacturing Companies
Here’s my top list of examples of manufacturing goals and objectives:
- Process map your supply chain
- Get more from the information systems
- Decrease raw material costs
- Optimize inventory levels
- Start production on time
- Reduce downtime
- Improve preventative maintenance
- Streamline production processes
- Reduce costs
- Fill excess capacity
- Make smart capital investments
- Achieve target quality levels
- Optimize distribution
- Hit on-time delivery dates
- Adapt to change
- Attract and retain the right people
- Improve workplace safety
- Create a pleasant environment
- Develop your employees
- Build better relationships
Next, we will touch on each of these points one at a time. Then, before we wrap up, I will provide tips on setting and achieving your manufacturing goals and objectives.
Disclosure: At no cost to you, I may get commissions for purchases made through links in this post.
Furthermore, when you are ready to learn more about business success, check out the online business courses at MasterClass. They are all taught by experienced business experts.
Otherwise, please stick with me here as we keep moving. Our first two production goals begin with the topic of information gathering. After all, knowledge is power.
1. Process Map Your Supply Chain
First, you can only improve what you understand. So, set an immediate goal to map your supply chain from start to finish.
Start at the beginning of when a customer places an order. Then, finish when that order arrives at your customer’s dock. Finally, include every process step and input to that process in between.
2. Get More From The Information Systems
Determine what output you can get from your technology systems. Identify any information gaps that exist.
Then, set a goal to fill the information void. If you can enlist the support of a business analyst, all the better. They will be skilled at mining data from the information system.
Next, let’s move on to raw materials and inventory. They are essential components of production processes.
3. Decrease Raw Material Costs
One of the first inputs to any manufacturing process is raw materials. Thus, look for ways to lower these costs.
There are several ways to reduce your per unit raw material spend.
First, negotiate better prices with your current suppliers. Second, onboard new suppliers offering better prices. Finally, look for less expensive substitutes as long as they maintain the quality of your product.
For best results, put your purchasing department to work on these ongoing business goals.
4. Optimize Inventory Levels
Inventory has carrying costs. It ties up space and requires precious cash to buy and hold.
So, pay attention to these crucial financial aspects of your business. Thus, determine the best ways to reduce inventory throughout your process.
That means all stock categories, including raw materials, work-in-process, and finished goods.
Days on hand is the most typical metric for managing inventory levels. Thus, set a goal to reduce days on hand of raw materials, work-in-process, and finished goods inventories.
After addressing raw material costs and inventory levels, it’s time to move on to the manufacturing process. In production is where good time management equals money.
5. Start Production On Time
Everything comes together at the start of the production process. So, this goal is more straightforward said than done. However, I will say it anyway.
Start production on time, all of the time.
That means every resource must be ready, including your managers, raw materials, production crew, equipment, and the facility.
6. Reduce Downtime
After you start on time, you must meet your production goal and keep running until you do.
To do this, reduce downtime.
What is the most typical cause of unplanned production shutdowns? It is an equipment failure.
This issue leads us to my next point about manufacturing business goal-setting.
7. Improve Preventative Maintenance
Look at your routine and planned preventative maintenance processes. Then optimize your maintenance schedule to limit unplanned downtime of equipment.
Because when your equipment goes down, it creates a domino effect. As a result, equipment downtime idles people and materials available to produce products for your customers.
8. Streamline Production Processes
Next, take it one step further with your production processes running and performing as you expect them to.
Map out the process and look for ways to work better and more efficiently. Also, identify bottlenecks and waste points to eliminate them.
Okay. Much of what we have discussed thus far will reduce costs. Next, however, let’s address that point head-on.
9. Reduce Costs
Efficient expense management is the foundation for successful manufacturing companies. However, only some companies should strive to be lost-cost producers.
The goal is to deliver your products cost-effectively while maintaining target quality and service standards. However, that only sometimes means operating at the lowest cost possible.
Typical cost reduction targets are part of the goals of lean manufacturing. So, look to reduce expenses in the following areas:
- Raw material costs
- Inventory levels
- Waste reduction
- Labor and salary rates
- Employee benefits
- Overhead expenses
First, ask for help from your finance department on this goal. Second, cost reductions are some of the most measurable goals. Because finally, with measurement comes performance!
Okay. Please stick with me. Ten production goals examples down, and ten to go.
10. Fill Excess Capacity
Next, every manufacturing operation has fixed costs. Namely, those expenses that remain the same regardless of production levels.
So, seek to leverage your fixed costs over higher production volumes. First, however, make sure everything produced can be sold.
11. Make Smart Capital Investments
Another excellent way to reduce costs and become more efficient is by making smart capital investment decisions. Each investment, however, must generate an acceptable return over the next one to five years.
Thus, seek out investments that:
- Increase manufacturing throughput
- Decrease raw material waste
- Reduce labor requirements
- Decrease product defects
As long as we are on product quality, that production goal example is next.
12. Achieve Target Quality Levels
Quality goals for manufacturing are essential.
Furthermore, “first pass acceptance (FPA)” is the best quality goal. That means the percentage of products produced meeting quality standards when made the first time.
Thus, neither the product’s disposal nor rework is required. FPA is one of many possible key performance indicators indicating your manufacturing business’s overall health.
As a result, the higher the first-pass acceptance rate, the better.
13. Optimize Distribution
Thus far, we have talked about improving the inputs required to make your product. Also discussed was achieving an acceptable quality level.
In football terms, we have made it to the “red zone.” Next, however, you must get across the goal line and score.
That’s where your distribution processes come into play. So, set a goal to optimize your finished goods warehousing, shipping, and distribution processes.
14. Hit On-Time Delivery Dates
Then punch the ball into the end zone and hit your promised delivery date to the customer. Like first-pass quality acceptance, higher on-time delivery rates are better.
Thus, always remember that your business success depends on on-time delivery! Therefore, getting this area right is a critical component of manufacturing objectives.
15. Adapt To Change
Next, flexibility, adaptability, and innovation are essential for long-term business success.
Why? Because the world around us is changing at a swift pace.
Yet, manufacturing professionals like you and me prefer stability.
For example, we want to set up the production line and run the same product for as long as possible. Doing so makes us more efficient.
Just remember, to stay the same is to fall behind. So, set a goal to become more adaptable. Thus, become a change agent within your industry.
Remember that continuous personal development for managers and all employees is a must! It will keep your manufacturing business one step ahead of the competition.
Okay. Everything we have discussed thus far relies on one essential input to your manufacturing processes.
What is it? Simply put, it’s your people.
Specifically, I am talking about your employees, associates, and stakeholders in the workplace at your manufacturing company.
As a result, we will close with several people-related production goals examples.
16. Attract And Retain The Right People
First, look at your hiring processes and make them better. Involve all of your managers in this activity.
Then, identify and hire the right people with the right skills. Finally, ensure they will fit and thrive in your company culture.
Second, set a goal to improve employee retention. Involuntary turnover costs money and leads to inefficiency and hidden costs.
To improve employee retention, carefully consider the following several goals.
17. Improve Workplace Safety
Next, understand that safety goals for manufacturing are critical.
Sending employees home sick, hurt, or injured is a fast recipe for failure. Thus, this could be one of your most critical business goals.
Due to the nature of many production processes, manufacturing companies are at greater risk of employee accidents. So, create a better work environment by improving workplace safety.
18. Create A Pleasant Environment
After addressing safety issues, take your workplace to the next level. Thus, creating an enjoyable environment for workers is essential for manufacturing businesses.
Walk around and take a hard look at the following:
- Exterior grounds
- Employee entrance
- Locker rooms
- Break room
Then look for ways to make your surroundings more pleasant for employees to come and work. Their productivity depends on it!
19. Develop Your Employees
Next, a great goal is to create an employee development plan. Thus, help your team members become the best they can be through the following activities:
- On-the-job training
- Courses or seminars
- Cross training
- Promotional opportunities
- Leadership skills training
20. Build Better Relationships
Building positive relationships in your manufacturing company doesn’t start and end with your employees. Most noteworthy, relationship building includes all of your stakeholders.
After all, your company is part of a broad and complex supply chain. Also, the company is part of the local business and financial community.
So set manufacturing goals to be the best business partner you can be. Good partnering includes relationships with the following:
- Government agencies
Okay. Before I wrap up, please allow me to address a couple more critical topics.
SMART Goals For Manufacturing Companies
First, more than choosing performance goals is required. You must set them the right way.
Furthermore, for setting goals, I prefer SMART manufacturing goals examples. SMART is an acronym that stands for:
Try out this article about how to set SMART goals. There you will find all of the details on goal-setting best practices.
Achieving These Production Goals Examples
Next, selecting and setting goals the right way is only the start. No matter what manufacturing goals and objectives examples you pursue, achieving them is the ultimate prize.
Furthermore, production goals and objectives are reasonably complex, with many interrelated parts. So, you must have a method to achieve the goals you select.
It begins with having the right mindset. Then, planning, acting, and monitoring results.
Here’s more on my suggested approach to achieving goals.
Okay. That’s all I have.
So, allow me to wrap up with a few parting thoughts.
Wrap-Up: Production Goals Examples For Manufacturing
Manufacturing is tricky, even for a small business. There are a lot of different moving parts that have to come together for success.
Thus, choosing, setting, and achieving the right manufacturing goals and objectives examples is vital.
So, use today’s list and the supporting articles I have provided. Then get started and accelerate your journey to manufacturing excellence.
Ready for more? If yes, check out our library of business articles to take your company to the next level.
Most importantly, thanks for reading, and good luck achieving your production goals and objectives. Get it right, and your company will become more and more successful over time.
Author Bio, Disclosure, & Disclaimer: Please join me (Tom) as I try to achieve my goals, find my next place to live, and make the most of my money. However, I am not a licensed investment adviser, financial counselor, real estate agent, or tax professional. Instead, I’m a 50-something-year-old, early retired CPA, finance professional, and business school teacher with 40+ years of DIY dividend investing experience. I’m here only to share my thoughts about essential topics for success. As a result, nothing published on this site should be considered individual investment, financial, tax, or real estate advice. This site’s only purpose is general information & entertainment. Thus, neither I nor Dividends Diversify can be held liable for losses suffered by any party because of the information published on this website. Finally, all written content is the property of Dividends Diversify LLC. Unauthorized publication elsewhere is strictly prohibited.