Quality Objectives in the manufacturing industry

Quality Objectives (KPI):

Quality objectives are the SMART goals for enhancing customer satisfaction and are relevant to the quality policy of the company. Quality objectives are defined when establishing the quality management system or during management review. It is also called Key performance indicator. KPI shall be defined of each department.

List of the Quality Objectives :

Customer Complaints:

Customer complaints are the complaints registered by the customer. Customer complaints are monitored month-wise against the target and a trend chart is maintained to show the data. The target for customer complaints must be zero. It is the KPI of marketing department as per IATF & also related to quality & production department.

Customer Rejection PPM:

Customer rejection PPM is monitored month-wise against the target and a trend chart is maintained to show the data. it is also called customer PPM. Where PPM means parts per million. The target for customer PPM should be zero.

Rejection PPM= (Reject qty at customer end / Total dispatch qty) x 1000000

In house complaints:

In house complaints are the complaints that are captured inside the company. We must do red bin meetings to capture in-house complaints. In-house complaints are monitored month-wise against the target and a trend chart is maintained.

We should at least take action with a defect analysis report (DAR) on the top 3 in-house complaints as per the Pareto chart.

In house rejection PPM:

In-house rejection PPM is monitored month-wise against the target and a trend chart is maintained. The target for in-house PPM should be at least 20% less than the previous year’s target.

In house Rejection PPM= (Total rejection / Total production) x 1000000  

Cost of Poor Quality (COPQ):

 The cost incurred in producing & rectifying a defect is called the cost of poor quality. The cost of poor quality data is maintained month-wise against the target and a trend chart is maintained.  

Internal Audit:

 Internal audits are done as per plan (6-month frequency) and all non-conformity ( NC ) should be closed within the time period as defined in the procedure.

Product and Process Audit:

Product and process audits are done as per plan and all NC should be closed within the time period as defined in the procedure for internal audit.

External Audit (Customer audit):

Customer audits are reviewed and all NC should be closed timely.

Machine Breakdown Hours:

It is the total breakdown hours incurred in all machines in a month. Month wise data should be captured against the target. Follow maintenance procedure. Also calculate mean time to repair (MTTR) and mean time between failure (MTBF).

Preventive Maintenance as per plan:

Preventive maintenance of machine & tools should be as per plan.

Tool Breakdown Hours:

It is the total breakdown hours incurred in all tools in a month. Month wise data should be captured against the target.

Inventory Turnover Ratio (ITR):

It is the ratio of yearly sale of a company and average inventory.

ITR = Sale / Average Inventory

If we need to calculate on monthly basis then,

ITR = (Sale of month x 12) / Monthly average inventory

Overall Equipment Effectiveness (OEE) :

Calculate OEE of the plant / shop. OEE is the product of Availability, Performance & Quality ratio. It should be as per target decided. It is better OEE as high as possible. From OEE, we will get the plant efficiency & effectiveness.

Number of Kaizens :

Kaizen should be implemented in each month by each department as per target. Kaizen can be categorized as improvement in Productivity, Quality, Cost reduction, Delivery, Safety & Morale ( PQCDSM). It is the part of continual improvement process in the company.

Turnover ( Sale) :

Sale turnover is the main key performance indicator of top management & marketing department.. Sale should be as per target decided and customer demand.

Supplier performance :

Calculate supplier rating in each month. It should be as per target. Supplier rating should be calculated on the basis of some criteria like Rejection, quality problem, customer line disruption, delivery failure, premium freight and other.

Supplier Audit :

Supplier audit should be done as per plan. All observations should be closed by the supplier.

Read the Story about Key Performance Indicator (KPI).