Leadership Development ROI – Key Data from 1000 Manufacturers

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.

 150x10_white_spacer 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

Supervisor Training Return on Investment from 1000 Manufacturers

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The facts are clear; you will improve your organization’s bottom line by providing leadership training. We guarantee across the board performance improvements if you enroll your team leaders and supervisors in our leadership development program. Take a quick look for yourself.

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