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articles:understanding_quality_kpis_and_objectives [2023/01/29 21:34] – [Common KPIs and Quality Objectives] rrandallarticles:understanding_quality_kpis_and_objectives [2023/05/25 18:01] (current) – [Common KPIs and Quality Objectives] rrandall
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 ====== Understanding Quality KPIs & Objectives ====== ====== Understanding Quality KPIs & Objectives ======
 +{{keywords>Quality Objectives}}
 Before discussing "KPIs and Objectives" (Goals/Targets), we must first recognize and understand the hierarchical relationship between the Quality Policy, KPIs, and Quality Objectives. Before discussing "KPIs and Objectives" (Goals/Targets), we must first recognize and understand the hierarchical relationship between the Quality Policy, KPIs, and Quality Objectives.
  
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 <WRAP center round important 80%> <WRAP center round important 80%>
-ISO doesn't care that having a "//Quality Policy//" is directly contrary to [[https://deming.org/eliminate-slogans-exhortations-and-targets/|point 10]] ("//Eliminate slogans, exhortations...//") of [[https://deming.org/explore/fourteen-points/|Demings 14 Points]]. The requirement for a "Quality Policy" is driven by Philip Crosby's failed "Zero Defects" motivational management philosophy... and has absolutely no influence whatsoever on the level of quality that a company produces. The "Quality Policy" is effectively a non-value-added form of "virtue signaling". However, this is something that many 3rd Party Auditors will ask both management and employees about. Since the "Quality Policy" will likely never be seriously "critiqued" after it is established, the goal should be to simply satisfy the ISO 9001 / AS9100 / AS9120 requirement by creating a short, simple "Quality Policy". For example: \\+ISO doesn't care that having a "//Quality Policy//" is directly contrary to [[https://deming.org/eliminate-slogans-exhortations-and-targets/|point 10]] ("//Eliminate slogans, exhortations...//") of [[https://deming.org/explore/fourteen-points/|Demings 14 Points]]. The requirement for a "Quality Policy" is driven by Philip Crosby's failed "Zero Defects" motivational management philosophy... and has absolutely no influence whatsoever on the level of quality that a company produces. The "Quality Policy" is effectively a non-value-added form of "virtue signaling". However, this is something that many 3rd Party Auditors will ask both management and employees about. Since the "Quality Policy" will likely never be seriously "critiqued" after it is established, the goal should be to simply satisfy the ISO 9001 / AS91xx requirement by creating a short, simple "Quality Policy". For example: \\
 "//__(Insert Company Name)__ is committed to satisfying all applicable requirements; and continual improvement of the quality management system.//” "//__(Insert Company Name)__ is committed to satisfying all applicable requirements; and continual improvement of the quality management system.//”
 </WRAP> </WRAP>
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 However, AS9101 does define a KPI. However, AS9101 does define a KPI.
  
-<blockquote>AS9101 - 3.2 Key Performance Indicator (KPI) \\ +<blockquote>AS9101 (Rev. G) - 3.2 Key Performance Indicator (KPI) \\ 
-Measures __associated with goals or targets__ showing how well an organization is achieving its __objectives__ or critical success factors for a particular project. KPIs are used to objectively define a quantifiable and measurable indication of the organization's progress towards achieving its goals.</blockquote>+Measures associated with __goals or targets__ showing how well an organization is achieving its __objectives__ or critical success factors. KPIs are used to objectively define a __quantifiable and measurable__ indication of performance. 
 +</blockquote>
  
-AS9101 goes further than ISO 9001 by requiring AS91xx Auditors to complete a “Process Effectiveness Assessment Report” (PEAR) during each assessment.+ISO 9001 & AS9100, sec. 6.2 are identical in stating:  
 +<blockquote>6.2.1 The organization shall establish quality objectives at relevant functions, levels, and __processes__ needed for the quality management system.</blockquote>
  
-<blockquote>AS9101 - 4.2.2.5.1 Process Results \\ +While many ISO 9001 auditors are flexible or lax in how they interpret this requirement for a quality objective to be established for EACH process, AS9101 requires AS91xx Auditors to complete a “Process Effectiveness Assessment Report” (PEAR) during each assessment. 
-The audit team shall record measures, targets, and values of __KPIs__ related to each audited operational process (see 9100-series standards clause 8) on the PEAR (see Form 3 Section 2), taking into account the confidentiality of information (see ISO/IEC 17021-1 clause 8.4 requirements).</blockquote>+ 
 +<blockquote>AS9101 (Rev. G) - 5.3.7 Process Results \\ 
 +5.3.7.1 The audit team shall record measures, targets, and values of KPIs related to each audited operational process (see 9100-series standards clause 8) on the PEAR (see Form 3, Section 2), taking into account the confidentiality of information (see ISO/IEC 17021-1 clause 8.4 requirements). \\  
 + 
 +NOTE: Upon mutual agreement between the organization and the CB, other processes can be recorded on a PEAR.  
 +</blockquote>
  
 A PEAR form is required to be completed for each “operational process” (e.g., Contracts, Programs, Engineering, Procurement, Production). A PEAR form is required to be completed for each “operational process” (e.g., Contracts, Programs, Engineering, Procurement, Production).
  
-While the PEAR form includes fields for the Auditor to record data relating to procedures reviewed, records examined, people interviewed, etc., it also has a specific section for the auditor to record the KPIs for the process, the “Objectives” (e.g., “Target”) associated with each KPI, and the actual data (i.e., value) for the period audited (usually the previous 12 months).+While the PEAR form includes fields for the Auditor to record data relating to procedures reviewed, records examined, people interviewed, etc., it also has a specific section for the auditor to record the KPIs for the processes, the “Objectives” (e.g., “Goal/Target”) associated with each KPI, and the actual data (i.e., value) for the period audited (usually the previous 12 months).
  
-{{ :articles:as9101_form_3_sec._2.png?nolink |}}+{{ :articles:as9101g_form_3_sec._2.png.png?nolink&800 |}}
  
 The “Comments” field is for the auditor to either note that the “objective” was met OR what actions are being taken to meet it. The “Comments” field is for the auditor to either note that the “objective” was met OR what actions are being taken to meet it.
  
-This is because AS91xx requires Auditors to issue an NCR when “Quality Objectives” are not being met, and no action is being taken.+While there is no requirement for the "actions" to be recorded (documented), both ISO 9001 / AS91xx auditors //should// ask how 6.2.2 a thru e are being addressed. 
 +<blockquote>6.2.2 When planning how to achieve its quality objectives, the organization shall determine: \\  
 +a. what will be done; \\  
 +b. what resources will be required; \\  
 +c. who will be responsible; \\  
 +d. when it will be completed; \\  
 +e. how the results will be evaluated.</blockquote>
  
-<blockquote>AS9101 - 4.2.2.5.1 Process Results (Cont.) \\ +These questions are straightforward... and if management cannot answer each of them, then a nonconformity is justified. 
-The audit team shall issue an NCR against the relevant 9100-series standard clause when the process is not delivering the planned results and appropriate action is not being taken.</blockquote>+ 
 +In fact, AS91xx specifically requires Auditors to issue an NCR when “Quality Objectives” are not being met, and no action is being taken. 
 + 
 +<blockquote>AS9101 (Rev. G) - 5.3.7 Process Results (Cont.) \\ 
 +5.3.7.2 \\  
 +The audit team shall issue an NCR against the relevant 9100-series standard clause, when the process is not delivering the planned results __and appropriate action is not being taken__. \\  
 + 
 +NOTE 1: The NCR may be issued against 9100-series standards clause 4.4.1.c and/or 4.4.1.g, if the nonconformity is related to the effective operation and control of the process. \\  
 + 
 +NOTE 2: Nonconformities identified against 9100-series standards clauses 4.4.1.c and/or 4.4.1.g, resulting from multiple PEARs, may be combined into a single NCR.</blockquote>
  
 The “action” is not specifically required to be a “corrective action”. An acceptable “action” could be an “improvement” activity. The “action” is not specifically required to be a “corrective action”. An acceptable “action” could be an “improvement” activity.
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 <WRAP center round important 80%> <WRAP center round important 80%>
-While I would ordinarily caution "//Beware the sirens call to mediocrity//", in a strange twist, the [[articles:ocap|OCAP]] (required for all AS91xx companies) actually promotes mediocrity by linking the company's performance to a "risk factor" - used to determine whether the company is a High, Medium, or Low risk. This discourages the use of "//stretch goals//" because the [[articles:ocap|OCAP]] will "punish" these companies with a 'High" risk rating (which is used to adjust the audit time by ±10%).+While I would ordinarily caution "//Beware the sirens call to mediocrity//", in a strange twist, the [[articles:ocap|OCAP]] (required for all AS91xx companies) actually promotes mediocrity by linking the company's performance to a "risk factor" - used to determine whether the company is a High, Medium, or Low risk! This discourages the use of "//stretch goals//" because the [[articles:ocap|OCAP]] will "punish" these companies with a 'High" risk rating (which is used to adjust the audit time by ±10%).
 </WRAP> </WRAP>
 +
 +While your "true" goal will often be 100% compliance... these goals are established for "certification" purposes. If you don't know the difference, read: [[articles:qms_vs_iso9001_cert_mgmnt_system|"How a QMS is different from a "Certified Management System"]]
  
 To put the suggested goals/targets in perspective: 99.80% is approx. 4.38 Sigma Short Term (Z<sub>ST</sub>) – or 2,000 DPMO (Defects Per Million Opportunities). That is the average % products delivered “defect-free” from a “typical” machining “Job Shop” (producing high variation, low volume lots at inconsistent rates). To put the suggested goals/targets in perspective: 99.80% is approx. 4.38 Sigma Short Term (Z<sub>ST</sub>) – or 2,000 DPMO (Defects Per Million Opportunities). That is the average % products delivered “defect-free” from a “typical” machining “Job Shop” (producing high variation, low volume lots at inconsistent rates).
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 ^  Process  ^  KPI  ^  Suggested \\  Goal / Target  ^ ^  Process  ^  KPI  ^  Suggested \\  Goal / Target  ^
-|  Contracts  | Proposals submitted prior to deadline (typically established by the customer)  |  100%  |+|  Contracts  | Proposals submitted prior to deadline (typically established by the customer)  |  98%  |
 |  :::        | Contract / Customer Purchase Order revisions requested after acceptance (due to review errors) |  ≤0.25% of opportunities  | |  :::        | Contract / Customer Purchase Order revisions requested after acceptance (due to review errors) |  ≤0.25% of opportunities  |
-|  Project  | Project Milestones achieved on-time  |  100%  | +|  Project  | Project Milestones achieved on-time  |  98%  | 
-|:::  | Project Deliverables (e.g., [[https://www.smalltofeds.com/2007/07/contract-data-requirements-list-cdrl.html|CDRLs]]) delivered on-time  |  100%  | +|:::  | Project Deliverables (e.g., [[https://www.smalltofeds.com/2007/07/contract-data-requirements-list-cdrl.html|CDRLs]]) delivered on-time  |  98%  | 
-|  Engineering  | Engineering Milestones achieved on-time  |  100%  |+|  Engineering  | Engineering Milestones achieved on-time  |  98%  |
 |:::  | % of ECOs (Engineering Change Order) due to "design” errors (e.g., poor manufacturability)  |  ≤2% of ECOs submitted  | |:::  | % of ECOs (Engineering Change Order) due to "design” errors (e.g., poor manufacturability)  |  ≤2% of ECOs submitted  |
 |:::  | % of ECOs (Engineering Change Order) submitted citing "drawing” errors  |  ≤2% of ECOs submitted  | |:::  | % of ECOs (Engineering Change Order) submitted citing "drawing” errors  |  ≤2% of ECOs submitted  |
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 </WRAP> </WRAP>
  
 +{{page>wiki:pathforward}}