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Same KPI in different processes although related?

Discussion in 'ISO 9001:2008 - Quality Management Systems' started by Qualmx, May 20, 2017.

  1. Qualmx

    Qualmx Well-Known Member

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    Hi everybody

    Please share your thoughs regarding to assign kpis

    For example:
    Delivery process

    I have a KPI for deliveries
    # of late deliveries = max 5 monthly

    Sales Process

    And also this kpi is set for Sales, why?

    Because I want to monitor how the sales process is complying with client´s compromises
    and for Delivery process, because is a key kpi to monitor deliveries.

    But recently, both processes resulted with uncompliment and is needed a Corrective Action in each process.

    But clearly we know what the problem was (there was power outage in the city) and was the cause of the problem.

    In this case if each process carries out the CA, for sure will lead to same cause, thus repeating the CA analysis, and if an uncompliment happens again, I'll have the same situation.

    In your opinion, is it recommended to keep the same KPI´s for both processes?
    or do you have any idea as to how to monitor the late deliveries in both processes?

    Thanks for your inputs
     
  2. Andy Nichols

    Andy Nichols Moderator Staff Member

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    QualMX - from your posts, I think you are making this waaaay too complicated! If you measure sales against delivery, how do you know they contributed to the lateness? Are they given lead times? Do they quote something different to (standard) lead times? It's a nice idea, but impractical without several other things being taken into consideration.
     
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  3. Qualmx

    Qualmx Well-Known Member

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    Thanks Andy
    My idea it is this:
    I want to detect if sales is the cause of late deliveries and I have some arguments.
    It takes too long to send work orders to product, thus delaying the deliveries,that is the reason to set this kpi to Sales.
    And I also set the same in Delivery process with the idea to cross the results for determining real cause.
    Please advise
    Thanks
     
  4. Bev D

    Bev D Moderator Staff Member

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    Let's try thinking about this a bit differently. On time delivery is a metric for the entire organization. There are many functions and departments involved in the process of delivery. It starts with the person taking the order from the paying Customer and ends with the person handing over the product to the paying Customer. Each function will have critical characteristics that can be measured that will effect on time delivery and that they can directly control. Understanding this entire process as a system and improving it as a system is absolutely essential to making lasting improvements in the process performance. If there is a problem with on time deliveries then a cross functional team should investigate the Causal mechanism and avoid blame.

    Thinking about it this way, what would you do about this situation?
     
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  5. Qualmx

    Qualmx Well-Known Member

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    Thanks Bev D,
     
  6. Qualmx

    Qualmx Well-Known Member

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    Because most of the processes have its specific KPI, maybe move it to top management?
    although there are other that may apply, e.g. product Rejects into it, several processes could be involved.
    sales didnt detect the requirement, bad manufacturing, poor inspection, bad raw material,Purchase process
    didnt specify the right need,etc.

    Still is not clear for me, I´m going to think it a little bit more.

    The matter is, same KPIs in several processes.

    Thanks
     
  7. normzone

    normzone Well-Known Member

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    I don't know if this will help any, but in the dysfunctional environment I play in, I sort our on time delivery as:

    Overall OTD (On Time Delivery)
    OTD within our control - this excludes customer changing their mind midstream, suppliers coming back and saying "oops, sorry, it's on back order", etc
    Percent late due to Sales screwups
    Percent late due to Engineering screwups (these two groups overlap, must discriminate in data review)
    Percent late due to Labor availability
    Percent late due to Sale, Engineering, and Change Control (last minute COTS modifications, or previously unidentified incompatible components) all balled up in one number
    Percent late due to Suppliers (usually a tiny number, with occasional dramatic spike)
     
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  8. Qualmx

    Qualmx Well-Known Member

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    Normzone
    You mean,you splitted up the kpi?
    You have defined a % allowed of late deliveries in each process?that is, it is not defined in one process but in many?
    How do others at qualityforum manage this kpi?
    Thanks
     
  9. Nick1

    Nick1 Member

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    Hi Qualmx,

    Is Sales really responsible for late deliveries? I think there are too many factors involved in late deliveries which are out of the influence of sales.

    I do understand that promising unrealistic delivery times is something you want to keep under control but try to find a different KPI for that. You probably have something of a guideline for delivery times when it comes to manufacturing. Try to see how close sales comes to these guidelines when they offer a project. Don't use delivery time as a KPI for sales, just too many variables unrelated to sales are involved.
     
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  10. Bev D

    Bev D Moderator Staff Member

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    Dysfunctional? I'll say...a culture of blame is one of the biggest enemies of Quality. As Quality professionals we need to fight against this culture. While I fully understand (and have certainly experienced) how difficult this can be, if we fall in to the culture we are lost. "Screw-ups"? How sad, it really is about root cause not root blame. As Deming said, "a bad system will defeat a good person every time". Most people, when supported in understanding and improving the system by avoiding blame, will rise to the occasion and achieve truly impressive improvements in Quality. Most people don't come to work thinking 'how can I screw the company today'. Most people really want to do a good job - they just need to know the path. Of course if you work for a company that has a bad set of leaders who think only of profit for themselves, you are doomed. Time to find another job.

    As I alluded to in my initial post, I manage on time delivery as an organization wide KPI. We view the process from order entry to delivery as a single process - or value stream if you will. When we have a problem with on time delivery we investigate using a cross functional team to determine the causal mechanism and then we correct it. We do have metrics for each departmental function that they can control and that affect the cycle time of orders through their function. These are typically time related and are related to the take time of the product.
     
    Last edited: May 30, 2017
  11. normzone

    normzone Well-Known Member

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    [Bev D] -

    Is your product line high/low mix and/or high/low volume ? -
     
  12. Bev D

    Bev D Moderator Staff Member

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    yes...
    high mix high volume
    high mix low volume
    low mix high volume
    we don't have low mix, low volume..
     
  13. Qualmx

    Qualmx Well-Known Member

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    Thanks,when you say wide kpi,could be to assign it to top management or set it as quality objective?
    Thanks
     
  14. Bev D

    Bev D Moderator Staff Member

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    It is quality objective. The primary owner is the Planning group. When there is a problem with delivery they lead the investigation and improvement effort. QA or the Operational Excellence team will 'coach' the crossfunctional team through the process to ensure that the true causal mechanism is determined and an effective solution is implemented.
     
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  15. Qualmx

    Qualmx Well-Known Member

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    Thanks for your time

    But dont you think that OTD should be a kpi defined down in other process? I mean a son of a Quality objective?
    for this case the quality objective would be for example, Customer satisfaction?
    Because Quality objectives are evaluated in a long-term base (six months or yearly), while when is defined
    into another of the realization processes, it is evaluated daily/monthly?

    Thanks again for your help
     
  16. Bev D

    Bev D Moderator Staff Member

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    No I don't. This is based on my experience with metrics on the output of processes that span many operations and organizations. Think about this high level flow for delivering product: sales & order entry - planning - procurement of raw material - delivery of raw material - manufacturing - QC - movement/transportation to ship-able locations - order picked in warehouse - transportation to Customer. No one in this process has direct immediate control of on-time delivery. They do have direct immediate control or influence over the cycle time and quality of their work. All of these add up to on time delivery performance. The metrics each of these organizations/operations need to have are those that measure the characteristics that they have direct control and influence over. When a person or organization is 'held accountable' for something they can control or influence they are left with nothing but blaming other people or simple denying that they are to blame. This is a destructive and dysfunctional environment under which no improvements can be made.

    On time delivery is a result of a complex SYSTEM. We must treat it as a system.

    As for how frequently we monitor quality objectives or any other metric we typically look at the trends in weekly or monthly subgroups (on a control chart!). We do expect 'continual' improvement over time but we also expect that 'goals' are met over a longer period of time so we get permanent improvements. We also will launch investigations into specific failures as they occur, so we actually monitor performance in real time...
     
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  17. Qualmx

    Qualmx Well-Known Member

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    Thanks Bev D
    Very clear your explanation.
    1-But I Wonder if kpis like this ,all of them should be quality objectives?
    2-should also be possible to assign this kpi (as kpi,not quality objective) to top management?
    3- In your experience,what others kpi are similar to OTD?
    Thank you so much
     
  18. Bev D

    Bev D Moderator Staff Member

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    1. We choose to make them quality objectives. In keeping with the the spirit of most quality standards this approach fits as it essentially assigns the metric to the organization as a whole and it is seen as a directive of the organization's leadership from the CEO on down.
    2. If the metric is a quality objective it DOES belong to top management...
    3. Any high level metric such as Quality/Customer satisfaction, revenue, profit, innovation targets, etc. For example. We have Mean time to failure goals and Run fault rate goals as well as Customer loss (defection) goals under our Quality metrics.


    I would suggest studying the process of Hoshin Kanri. This is a core principle of the Toyota Production System that speaks to setting "True North" goals and then water falling these top level goals down through the organization such that the local organizational goals align properly to contribute to the success of the high level goals
     
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