Blog · Board and management reporting · Industrial manufacturers
The ten sales KPIs an industrial manufacturer should run on, each with its formula, the export it comes from and what it tells you: aftermarket attach on the installed base, installed base register completeness, service contract renewal by fleet age, quote conversion by count and value, catalogue fit per customer, direct and distributor sales without double counting, warranty claims by customer and product, customer concentration, price realisation, and order intake against backlog. Also the three measures most manufacturers miss, the figures to drop, the identities, and who owns what.
A manufacturer sells a machine once and parts and service for twenty years, partly direct and partly through distributors. The measures that matter follow the unit after it ships: who owns it, what they buy for it, and from whom.
| # | Measure | Formula | Export | What it tells you |
|---|---|---|---|---|
| 1 | Aftermarket attach | Parts and service revenue ÷ installed units, per customer, against the norm for unit type and age | Ledger; installed base register | Customers sourcing parts elsewhere |
| 2 | Installed base completeness | Units with confirmed owner, site and status ÷ units shipped and not retired | Installed base register | Whether aftermarket figures can be trusted |
| 3 | Service contract renewal by fleet age | Contracts renewed ÷ contracts due, by unit age band; units coming off warranty with no contract | Service contract file; register | Where renewals are lost and who should call |
| 4 | Quote conversion, count and value | Quotes matched to orders ÷ quotes decided | Quote log; order file | Customers who price-check; families that lose |
| 5 | Catalogue fit | Product families bought ÷ families relevant to the customer's application | Ledger; customer application data | Families a customer could buy and does not |
| 6 | Direct and distributor sales, combined | Direct sales + distributor sell-through, per end customer | Ledger; distributor point-of-sale reports | The end customer view without double counting |
| 7 | Warranty claims by customer and product | Claims and cost ÷ units under warranty, per customer and product | Warranty system; register | The installed base that costs the most |
| 8 | Customer concentration | Top ten end customers' share; largest share; by margin | Ledger and sell-through | Dependence on a few OEM or end customers |
| 9 | Price realisation | Invoiced price ÷ list or agreement price, by customer and family | Ledger; price file | Discounts that were not decided |
| 10 | Order intake against backlog | Orders booked ÷ revenue shipped; backlog in weeks, by family | Order book; ledger | Whether the factory is filling or emptying |
Every one of these is computed per account, per account manager and channel, and in total, and every one carries an identity that must hold before the table is shown.
Aftermarket attach. Equipment revenue gets the attention. Parts revenue per installed unit, by customer, is seldom computed.
The register. It is nobody's job after the unit ships.
Distributor sell-through by end customer. The distributor is the customer in the ledger, so the end customer is invisible.
A customer runs 40 machines averaging eight years old. It buys $24,000 of parts a year: $600 per machine. Fleets of that type and age buy a median of $2,400 per machine. The gap is $72,000 a year, at parts margins. Twelve of the machines came off warranty in the last year and none has a service contract. No account manager has the customer on a list, because it has not bought a machine in three years.
Equipment revenue as the only sales measure. It ignores the larger, steadier stream.
Sell-in to distributors as end demand. It measures their stocking decisions.
Quotes issued. Conversion by value replaces it.
| Table | Must hold |
|---|---|
| Installed base | Units shipped = active + retired + status unknown |
| Channels | End customer sales = direct + distributor sell-through; sell-in is excluded from this view |
| Service contracts | Due = renewed + lapsed + pending |
| Order book | Opening backlog + intake − shipments − cancellations = closing backlog |
A table whose identity fails is a table with a row missing or counted twice. It is not shown until it is fixed.
| Measure | Owner | Reviewed |
|---|---|---|
| Units off warranty with no contract; quote conversion | Aftermarket sales; account managers | Monthly |
| Aftermarket attach; catalogue fit | Vice president of aftermarket; sales director | Quarterly |
| Installed base completeness; channel reconciliation | Sales operations with service | Quarterly |
| Warranty by customer; price realisation; intake and backlog | Commercial director; finance | Monthly to quarterly |
A measure with no owner is a metric, not a KPI; see KPI versus metric versus measure.
Ten measures from the ledger, the register, the contract file and distributor reports. Follow the unit after it ships; that is where most of the margin is. Covirage computes all of them from the exports manufacturers already produce, files only, with the definitions stated and the identities checked. See Covirage for industrial manufacturers.
Parts and service revenue per installed unit, by customer, against the norm for units of that type and age. A customer with forty machines buying $600 a year per machine in parts, where similar fleets buy $2,400, is sourcing parts elsewhere. Multiplied across an installed base it is usually the largest and most profitable gap a manufacturer has.
Because every aftermarket measure divides by it. Units sold through distributors, units resold, units scrapped: a register not maintained drifts until a third of records are wrong. Completeness, meaning units with a confirmed current owner, site and status, is the measure of whether attach and renewal figures can be trusted.
Sell-in to the distributor is in the ledger. Sell-through to end customers comes from distributor point-of-sale reports. The end customer view uses direct sales plus sell-through, never plus sell-in, or the same unit is counted twice. Matching end customer names across distributors and the direct ledger is most of the work.