Performance indicators of the enterprise's material and production activities

[Mimaktsa10]

The actual functioning of a company is determined not by its goal and strategy, but by the way the main task is presented to the structural divisions and personnel of the enterprise in the form of KPI. At the same time, for effective work, the "Goal" must exist outside the enterprise, and it must be given specific KPIs (measurable indicators), on the basis of which it is necessary to develop a strategy for achieving results. In the form of KPIs, specific tasks must be set and plans for their achievement must be developed for all departments and specific employees:

Measurable goal of the organization (KPI) >> Strategy >> Measurable goals and plans (KPI) of structural divisions and employees.

If the priorities noted above are not taken into account, the presented KPI subsystems are contradictory in nature, and their incorrect arrangement leads to negative results.

Performance indicators of the enterprise's material and production activities
The main performance indicators of the enterprise include the following.

Material consumption
This indicator reflects the level cameroon email list of efficiency of the enterprise's use of each unit of raw materials and shows what gross profit is obtained from each ruble of spent stocks. The coefficient is defined as the ratio of material costs for the manufacture of products to the volume of goods produced:

Me = Material costs / Volume of production of this type of goods

The calculated coefficient of material intensity is assessed in comparison with the standard indicator. If the calculation result is greater than 1, it means that there is an overexpenditure of materials and raw materials. If the indicator is less than 1, it means that there is a saving of raw materials in production.

Cost per unit of production
It is defined as the ratio of material costs and the cost of the resulting product and allows for an analysis of the cost of the product. If the coefficient exceeds 1, then production is causing losses. In this case, it is necessary to either increase the cost of the product or reduce the total costs of its manufacture. This indicator can be used in any manufacturing industry, as it directly shows the relationship between profit and the cost of the product.

Performance indicators of the enterprise's material and production activities

Source: freepik.com

When setting the retail price of a product for the end consumer, it is necessary to take into account not only all the costs that the enterprise incurs in the production process (from the cost of purchasing raw materials to paying taxes on income received from sales), but also the fact that the entrepreneur needs to receive income from the sale of each unit of goods.

However, in this concept we take into account only the first category of sources, i.e. expenses directly related to production and related processes. If the actual cost is calculated incorrectly, then the efficiency of the enterprise will decrease (in case of underestimation of the cost). If the enterprise spends more money on production than was included in the price of the goods, then a loss will arise, which will increase in parallel with the growth of sales volume.