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Going overboard on KPI's?

Discussion in 'IATF 16949:2016 - Automotive Quality Systems' started by Mark H, Nov 12, 2018.

  1. Mark H

    Mark H Member

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    Hey guys!

    At my company, we are in the middle of implementing IATF. We don’t manufacture any new parts for automotive, but we re-manufacture service parts for several OEM’s that are replaced under factory warranty. (Please don’t tell me that our company is out of scope of IATF, because it’s not, and I’m tired of explaining that. lol. Our customers and registrar both agree that we are in scope, but that’s always the first thing people say when I describe our company)

    I’ve put together a small team at my company to set KPI’s company wide, and we are running into a problem. We are having trouble agreeing on what needs to have a KPI.

    My worry is that we overdo this and waste a lot of time developing KPI’s that we don’t need.

    Our Quality Objectives are
    · Quality
    · Safety
    · Efficiency


    Here is what we are planning to set KPI’s for:

    1. Reman (Several production lines, for several OEM customers)
    2. Recycle
    3. Manufacturing (this is non-automotive, and out of scope of IATF, we re-purpose parts not fit for automotive for industrial use)
    4. Logistics (we distribute new and used parts for OEM’s)
    5. Support:
    • Operations
    • Accounting
    • Human Resources
    • Quality (Corrective Action Response time, Repeat Nonconformities, Time Spent Auditing vs Budgeted)
    • Maintenance, and Calibration
    • Engineering (Proj $ Budget / Actual, Proj Time Budget / Actual, On-time Task/Proj/Milestone completion)
    • R&D
    • Fabrication


    I have heard that every process needs to have a KPI, is that true?

    I have about 30 procedures, every procedure is for a process, do each of these need KPI’s?

    We need to monitor supplier performance, does that need to have a KPI?

    Warranty performance is a required input of Management Review, does that need a KPI?

    What exactly do they mean by warranty performance? Percentage of returned product?


    If anyone can shed some light on this, it would be greatly appreciated.

    Thanks!
     
  2. Golfman25

    Golfman25 Well-Known Member

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    Every process needs a kpi, but you can use the same kpi for multiple processes. For example, a big one for us is on-time shipments. That covers a lot of operations. If things are clicking properly our on-time shipments will be on good. If not, then we know we need to look. We are small enough that we generally know where our problems lie, so additional kpi's for sub-processes aren't helpful. Supplier performance is usually a combo of delivery and quality. Warranty will only apply if you have a warranty on your products. Good luck.
     
  3. ncwalker

    ncwalker Well-Known Member

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    What is the clause number that says every process needs a KPI?
     
    Andy Nichols likes this.
  4. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Oh no...
     
  5. Andy Nichols

    Andy Nichols Moderator Staff Member

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    See above

    The fundamentals of setting KPIs is that they need to relate to (key) processes and also the objectives. Simply grasping KPIs is flat out wrong. If you adopt the principles of "right first time" and "on time", flow those to your key (customer facing) processes, what does that translate into?
     
    John C. Abnet likes this.
  6. Golfman25

    Golfman25 Well-Known Member

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    IATF 16949 5.1.1.2: "Top management shall review the product realization processes and support processes to evaluate and improve their effectiveness and efficiency." (emphasis added)

    This becomes an input to management review under 9.3.2.1:
    Input to management review shall include:
    b) measures of process effectiveness
    c) measures of process efficiency

    You can fight it, develop dozens of KPIs, or link your big KPIs to the support processes and be done with it.
     
  7. Andy Nichols

    Andy Nichols Moderator Staff Member

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    I still don't see that KPIs need developing. ISO 9001:2015 doesn't require a "process" for example, for document control, so why would you have a KPI for it?
     
  8. Golfman25

    Golfman25 Well-Known Member

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    We are talking about IATF. So they have their own quirks. The basic requirement from the auditors I have worked with over the years was one efficiency and one effectiveness kpi for each identified process. I don't think the new versions have changed that mentality. And again, you can use the same KPI for multiple processes. It is what it is.
     
  9. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Auditors don't have "requirements". If you allow your auditor to run your business, good luck...
     
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  10. Mark H

    Mark H Member

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    My thinking is that "Key" processes would be processes that directly effect revenue, which also align with the Quality Objectives that we have defined at our company (Quality, Safety, and Efficiency)

    So I think we should stick with assigning KPI's for:
    • our production lines (throughput, and warranty returns),
    • our Quality department (time it takes to close corrective actions, and number of repeat nonconfomities,)
    • Maintenance (either OEE (Overall Equipment Effectiveness), MTBF (Mean Time Between Failure), and MTTR (Mean Time To Repair) as specified by IATF)
    I think we can skip support functions like HR, and Accounting, does that sound about right to you guys?
     
  11. bkirch

    bkirch Member

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    The way that it has been explained to me is that you first have to determine the processes needed for your Quality Management System (ISO 4.4.1.). We do this with a QMS process map. Once you have defined your processes, the expectation is that your process will have goals which are often measured through the use of KPI's. I do agree, though, that different processes could use the same KPI's.
     
  12. Golfman25

    Golfman25 Well-Known Member

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    Thanks for the well wishes. I am just telling what our Auditor and CB has required. The are bigger battles to fight.
     
  13. Golfman25

    Golfman25 Well-Known Member

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    As I have said, just be ready to tie HR into something bigger. You can tie it into your production metrics -- if you are hiring and training good/bad people it will show up in throughput, warranty, etc. Good luck.
     
  14. Andy Nichols

    Andy Nichols Moderator Staff Member

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    Certainly accounting. You may wish to take a look at retention and also unplanned absences for HR (if they are responsible for onboarding and motivation let's say). I would NOT wait to bury people issues in product conformity because trying to decide what caused something because you decided to measure the wrong thing makes zero sense!
     
    Last edited: Nov 18, 2018
  15. ncwalker

    ncwalker Well-Known Member

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    I've checked the clauses, and I don't see the dubious shall word coupled with every process.

    You definitely have to have some. (And you should). But every process, not seeing it. But ... as Golfman says, you pick your battles.
     
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  16. John C. Abnet

    John C. Abnet Well-Known Member

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    Good day @Mark H ;
    As you can see, you've already been given some good advice. I would simply add the following...

    1- Never do anything FOR the standard. Determine what metrics your organization needs to see for the proper "Monitoring, measurement, analysis, and evaluation (clause 9.1)
    2- Reverse engineer the "processes" that you will identify (clause 4.4.1)
    3- As already mentioned, you may want to consider grouping like processes (in the example below, we don't list "add pepperoni", we simply identify "assembly".

    Hope this helps.
    Be well.

    upload_2018-11-19_14-43-21.png
     
  17. Serious Man

    Serious Man Active Member

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    IATF 16949 same as ISO/TS 16949 is management system standard.
    It is for managers or people involved in managing company.
    Of course our core activity is making parts.
    If it is realy about product quality only, so why there are sections 4, 5, 6, 7, 9, 10?
    Generally main part of 8 should be enough.

    Managing without KPI is not managing.
    It is sad, that after so many years, we still have people who want to negotiate what processes need KPI.

    It's up to company how to define system processes.
    We have 12 system processes. None of them is called "document control" or "management review".
    All of them have KPI. Some of KPI were established due to customers' claims related to non-core activities.
     
  18. bkirch

    bkirch Member

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    Serious Man, would you be willing to post what those 12 processes are that you use?
     
  19. Serious Man

    Serious Man Active Member

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    Managing (so called document control and management review are inside), human resources, quotation, product design, process design, purchasing, manufacturing equipment (aka maintenance), inspection equipment (aka calibration), production, inspection of product (aka quality control), shipment, internal audits.
    When lower level processes are elevated to highest level of system processes, there are no doubts, that establishment of KPIs is hard and have no "social support" from process owners and involved persons side.
     
    Atul Khandekar likes this.
  20. Jennifer Kirley

    Jennifer Kirley Moderator Staff Member

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    Is the control of documents not a process? Is the control of documents not relevant to the QMS?
     

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