A leading publisher of financial metrics for manufacturing organizations recently released data regarding leadership development and its effect on a manufacturing organization’s key performance indicators. One thousand manufacturers were broken into two groups, those that had more than 20 hours of leadership training per supervisor or manager, and those with less than 20 hours.

Indicators like Sales per Employee, Gross Profit Margin, Production Volume and Operating Equipment Efficiency are very clear, the manufacturers that invested in more than 20 hours of training per supervisor or manager nearly outperformed those that did not in nearly every indicator. A table of key performance indicators is below for your reference.

	Manufacturers with more than 20 hours of leadership training	Manufacturers with less than 20 hours of leadership training
Training Investment as a % of labor budget	>2%	<2%
Labor Cost	20% of COGS	20% of COGS
Sales per Employee	$181,000	$150,000
Gross Profit Margin	50%	30%
Return on Invested Capital	18%	13.3%
Overhead	29% of COGS	26% of COGS
Turnover	6%	2%
Materials Cost	47.5% of COGS	50% of COGS
Production Volume as a % of designed plant capacity	78%	70%
Operating Equipment Efficiency (OEE)	92%	79%
First-pass Quality Yield	98%	97%
On-time Delivery	98%	96%
Reduced per-unit manufacturing costs	57%	52%
Achieved cost reductions of 10% or greater	29%	20%

1000 Manufacturing Organizations from the United States were Surveyed