Which Production Metrics Must You Track To improve QMS 1

Which Production Metrics Must You Track To improve QMS

Introduction

QMS or Quality Management System, with its array of metrics, is a valuable tool for organisations to determine and continually improve the quality of its goods and services. The ISO requires all organisations in all types of industries to comply with certain standards primarily with a view to catering adequately to customer’s satisfaction and adhering to environmental and safety standards. To check if your organisation is on the right side of QMS you need to check certain Production metrics.

Production Metrics you need to track

QMS calls for a continual improvement of the production processes, requiring organisations to keep a constant eye on visible production metrics. For the best quality improvements in your organisation, you could consider the following Production metrics which provide quantifiable data.

Metrics to Improve Quality

  • Yield: This metric calculates the percentage of correctly manufactured products in accordance with the standard specifications without any rework.
  • Customer Rejects/Return Material Authorizations/Returns: This is a measurement of the number of times customers rejected products and requested replacement owing to their low quality.
  • Supplier’s Quality Incoming: This refers to the percentage of satisfactory material for manufacture sourced from the supplier.

Metrics for Improving Efficiency

  • Throughput : This is the measure of the product being produced on the factory floor or on a machine or a line in a given period of time.
  • Capacity Utilization: is the measurement of the total manufacturing output capacity is utilized at a given point in time.
  • Overall Equipment Effectiveness (OEE) : Provides various metrics on machine or an entire production line. It is the product of Availability x Performance x Quality.
  • Schedule or Production Attainment: the metric pertains to measuring the percentage of time consumed in production within a specified schedule.

Metrics for Reducing Inventory

  • WIP Inventory/Turns: this is a radio calculation for measuring the efficient use of inventory materials derived from the cost of sold goods by the average cost of inventory utilised for their production.

Compliance Metrics

The compliance metrics drive the firm towards better adherence to the mandatory rules and regulations of different authorities. These include the measurement or an account of :

  • Reportable Health and Safety Incidents : A measure which accounts the number of health and safety related incidents in the factory or plant in a given period of time.
  • Reportable Environmental Incidents : A measure of the number of adverse environment- related incidents that were recorded as occurring over a period of time.
  • Number of Non-Compliance Events / Year : this metric entails measuring and documentation of events during production that violated the existing regulatory compliance within a period of a year. The details of the reason. Time and their resolutions need to be mentioned also.

Reducing Maintenance Metrics

This includes :

  • Percentage Planned vs. Emergency Maintenance Work Orders
  • Downtime in Proportion to Operating Time

Increasing Flexibility & Innovation

The New Products Introduction (NPI ) metric reflects how well a company is at striking and exploiting markets with its new products. The automation and electronics sector is especially known for utilising this metric to gauge their standing in the competitive market environment. This can be assessed with the help of –

  • Rate of New Product Introduction
  • Engineering Change Order Cycle Time

Reducing Costs & Increasing Profitability

This metric includes the following:

  • This can be calculated with a host of metric that include
  • Total Manufacturing Cost per Unit Excluding Materials
  • Manufacturing Cost as a Percentage of Revenue
  • Net Operating Profit
  • Productivity in Revenue per Employee
  • Average Unit Contribution Margin.
  • Return on Assets/Return on Net Assets
  • Energy Cost per Unit
  • Cash-to-Cash Cycle Time
  • EBITDA
  • Customer Fill Rate/On-Time delivery/Perfect Order Percentage

Conclusion

QMS is a valuable tool in organisations for observing and furthering the culture of quality. It is imperative, then, that management tracks the right Production metrics for attaining quality that comply with safety standards and customer satisfaction.

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