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 a Key performance indicator. KPI shall be defined by 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 the marketing department as per IATF & also related to the 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 one in-house complaints as per the Pareto chart. But we should cover all processes/departments like the press, machining, welding & assembly etc.
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. If it is more than the target then should take corrective action.
Internal Audit:
Internal audits are done as per plan ( recommend 6-month frequency) & with a departmental internal audit check sheet. 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 with a process audit check sheet & Control plan. 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 in a timely as per the action plan to close all non-conformities.
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 the mean time to repair (MTTR) and the mean time between failure (MTBF).
Preventive Maintenance as per plan:
Preventive maintenance of machines & tools should be as per plan. In the preventive maintenance plan, all machines as per the master list of machines should be covered.
Tool Breakdown Hours:
It is the total breakdown of hours incurred in all tools in a month. Month-wise data should be captured against the target. Follow the Tool Maintenance procedure.
Inventory Turnover Ratio:
It is the ratio of the yearly sales of a company and the average inventory.
ITR = Sale / Average Inventory
If we need to calculate on monthly basis then,
ITR = (Sale of month x 12) / Monthly average inventory
For more detail about Inventory Turnover Ratio.
Overall Equipment Effectiveness:
Calculate the OEE of the plant/shop. OEE is the product of the Availability, Performance & Quality ratio. It should be as per the target decided. It is better that OEE is as high as possible. From OEE, we will get the plant efficiency & effectiveness.
Number of Kaizens :
Kaizen should be implemented each month by each department as per the target. Kaizen can be categorized as an 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 departments. Sales should be as per the target decided and customer demand.
Supplier performance :
Calculate supplier rating each month. It should be as per the target. Supplier rating should be calculated on the basis of some criteria like Rejection, quality problem, customer line disruption, delivery failure, premium freight and others.
For more detail about Supplier control management.
Supplier Audit :
Supplier audit should be done as per plan with a supplier audit check sheet. All observations should be closed by the supplier.