As the saying goes, what gets measured gets managed. Though sometimes it’s hard to know which metrics are the most important when focused on quality.
This post gives a high-level overview of 14 quality metrics examples every top executive should consider monitoring, depending on your specific goals and improvement needs.
The Cost of Quality stands out as a crucial metric that warrants close monitoring, despite frequently being neglected. It encompasses both the expenses incurred due to poor quality and the investments made to ensure high quality.
The following formula for Cost of Quality was developed by ASQ, also known as the American Society of Quality:
COPQ includes internal and external failures, such as:
COGQ is comprised of what you spend to create conforming products, including:
There are a couple of ways to look at defects that tend to confuse people:
Closely monitoring customer issues is the only way to systematically prevent them. Figures to help you track customer-related issues include:
Scrap rate is the percentage of materials sent to production that never become part of finished products. In addition, you’ll want to keep a close eye on total scrap costs.
Scrap to include in your calculations would be: vendor scrap, internal scrap, and internal setup scrap. Manufacturers usually have their own internal ways of calculating scrap, for example, some companies would not include setup scrap, so it’s important to check with your company on what to include.
An easy way to calculate scrap is:
Yield is a classic measure of process or plant effectiveness. Beyond total yield, consider monitoring first-pass yield (FPY), the percentage of products manufactured correctly the first time through without rework.
Overall Equipment Effectiveness (OEE) is an important measure of productivity and efficiency, calculated in simple terms as availability multiplied by performance and quality. Here’s a more detailed look at each of those component metrics:
Throughput is the quantity of goods produced over a given period. You can measure throughput:
Suppliers have a huge impact on quality costs. Metrics to track here include:
There are two crucial metrics you should be measuring with regards to delivery from a customer satisfaction and efficiency perspective:
It’s harder to achieve a good POM considering that each component of this metric gets multiplied together:
10. Internal Timing Efficiency MetricsA number of metrics provide insight into how efficiently your facility runs in terms of timing. A few basics include:
Capacity utilization is the percentage of total output capacity used at any given point. This KPI can help with strategic planning and is also an indicator of market demand.
This metric tells you how often your plant reaches production targets over a given period of time. A simple calculation is orders completed by the scheduled date divided by a total number of orders.
Audit metrics are another leading indicator to monitor, especially if you’re using high-frequency layered process audits to reduce defects.
Which audit metrics should executives track? On a high level, you’ll want to look at:
Maintenance metrics serve as vital leading indicators for quality, offering an early alert system for potential quality concerns. Key leading metrics to track in this regard include:
It’s essential to monitor a mix of leading and lagging indicators. While lagging indicators tell you the results you’re achieving, leading indicators let you step in early to make adjustments before things go off the rails.
And really, that’s what monitoring KPIs is all about—and what your customers expect to see you doing. Learn more about key manufacturing quality metrics.
