Workshop for

Setting Quality Objectives and

KPIs
Agenda

2
 ISO 9001:2015
6.2 Quality Objectives and planning

552
 6.2 Quality objectives and planning to achieve them
❑The organization shall establish quality objectives
at relevant functions, levels and processes needed
for QMS

4
6.2 Quality objectives and planning to achieve them

5
ISO 9002:2016

Quality Objectives
• The quality objectives take the goal(s) stated in the quality
policy and turn these into statements for improvement against
which plans can be made

• Quality objectives may be established to measure the

performance of products, processes, customer satisfaction,
suppliers, use of resources, and the overall performance and
effectiveness of the quality management system

• If you state in your policy that you will “meet customer

requirements”, then you might set customer focused objectives
for: product defects, customer complaints and returns, on-time
delivery, etc.
ISO 9002:2016
Quality Objectives
Examples of quality objectives:
• Product: reduction in defect rates, PPM, scrap rates, on-
time delivery
• Process: improving productivity, reduction of waste, set-up
times or rework, improved cycle times
• Customer: product returns, reduction in complaints,
improvement in customer satisfaction scores, improved on-
time delivery.
• Suppliers: reduction of complaints or defects, improved on-
time delivery
• Resources: availability, capability, personnel, competency,
efficiency, absenteeism
ISO 9002:2016

Quality Objectives
• The objectives should be designed to be SMART (setting
objectives that are Specific, Measurable, Achievable, Realistic
and Time-based).

What does SMART stand for?

Discussion
SMART Quality Objectives
Specific

Verifiable

Specific

Results
Outcome

10
Measurable

Resources

Value added
to mission

Quality
Quantity

11
Achievable

Are there
sufficient
resources? At the
appropriate
work level?

Is it
obtainable? Within
employee
control?

12
Relevant

Why am I
doing this?

Is it mission
Line
related? of sight

13
Time-bound

Frequency
Deadlines

Ongoing
work

14
Setting Quality Objectives Process

Input Process Output

• Quality policy • SMART Objectives • Quality objective list
• Performance reports statements • KPIs
• Legal Requirements
• Customer Requirements
• Recommendations

15
Activity

• Determine your company Quality Objectives Inputs:

Activity
16
Establish Plan

• Activities
• Responsibilities
• Resources
• Time bounded
• Evaluation

Input Process Output

• Quality • Planning • Plan
objectives • KPIs

17
Activity

• Establish your company Quality Plan

Activity

18
KPIs

19
Quality management system ‫نظام إدارة الجودة‬

How far would you drive

without your gauges?
Quality management system ‫نظام إدارة الجودة‬
Quality management system ‫نظام إدارة الجودة‬
23
Key Performance Indicators

WHAT ARE KPI’s FOR?

•To communicate status - actual v target

• Plant level
• Business level
• Work station level

•To drive improvement by fact not guesswork

•To help prioritise improvement activity

• A continual health check for the business

•To connect the customer to the process

Key Performance Indicators

Business KPI’s

• Objectives KPIs • Safety Performance

• Processes KPIs • Quality Performance

• Cost Performance
• Departments KPIs

• Delivery Performance
• Products, legal and
customer requirements • People Performance
• Others (Excellence)
Typical KPI’s

KPI - examples Target

Quality
Defects 1 Defects per unit
(Defects per unit)
Errors
(errors per unit)
2 errors per unit

Delivery
Schedule adherence 0 delta (nil Hours behind or ahead of plan)
(Hours delta to plan)
Cycle Time To be agreed
(Hours per Unit)

Cost
Manning 270 hours per unit
(man hours per set)
(Cost per unit) £5,000 per unit

People
Skill Level 75% people trained to Practitioner Level
Training Hours 40 hrs per man per year

Key performance indicators need to be simple and focused

Setting KPIs

Input Process Output

• Objectives KPIs • Setting KPIs Process • KPIs
• Processes KPIs • Performance Evaluation
• Departments KPIs Matrix
• Products, legal and
customer requirements
• Other (Excellence)

27
How to Create and Manage KPI’s

Identify
Customers Determine
and Suppliers Performance
Drivers

Form Team

Define Local
Performance
Indicators

Score & Prioritise

KEY
Performance
Indicators
How to Create and Manage KPI’s

Ease of recording data

Impact on business
Frequency of occurrence

Define Local
Performance
Indicators
&

Score & Prioritise

KEY
Performance
Indicators
How to Create and Manage KPI’s

Identify
Customers Determine
and Suppliers Performance
Drivers

Form Team

Define Local
Performance
Indicators

Score & Prioritise

KEY
Performance
Indicators

Identify Owners
Develop Format and Users
And Review
Process
Example
KPI : Key Performance Indicator

LOST HOURS (UNPLANNED WORK) PRE & POST

30
29
28
27 L
26
25
1 24
23
22
21 H
20
19
18 G
17
16
15
4 14 B
13
12
11
5 10
9
8
7 A
6
5
4
3
2
1
Days 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7 1 2 3 4 5 6 7
28 29 30 31
Week

OSS A MCC G
Logistics
Internal B Supplier Trefn H
Maintenance C TAC I
MSE D Quality J
Engineering
Shop Support E Tooling K
3 Handling F Lean
& L
Unplanned Absence M

2 Blue Shift = TW
Owner: Red Shift = DJ

Location: X:\Broughton\A340-600\Lean Manufacturing\Stage 00\Std Documents\Lost Hours KPI

How to Create and Manage KPI’s

Identify
Customers Determine
and Suppliers Performance
Drivers

Form Team

Define Local
Performance
Indicators

Score & Prioritise

KEY
Performance
Indicators

Train Users Identify Owners

Develop Format and Users
And Review
Process
How to Create and Manage KPI’s

Identify
Customers Determine
and Suppliers Performance
Drivers

Form Team

Create Define Local

Improvement Performance
Plan Indicators

Score & Prioritise

KEY
Collect Data
Performance
Indicators

Train Users Identify Owners

Develop Format and Users
And Review
Process
How to Create and Manage KPI’s

Identify
Monitor Progress Customers Determine
To Plan And Take and Suppliers Performance
Corrective Action Drivers

Form
Improvement Form Team
Teams

Create Define Local

Improvement Performance
Plan Indicators

Score & Prioritise

KEY
Collect Data
Performance
Indicators

Train Users Identify Owners

Develop Format and users
And Review
Process
Examples & Case Studies

35
 Measuring Objectives

The Key Result Areas are the focus points critical to the success of the business.

• Needs to be able Future

to be consistently targeted
applied to yield figures
The objective should reliable results
be convertable into • Needs to be valid
action and should in that it will
also be measurable, measure The current Frequency of
Who is figure of reporting
ie. “what do we want attainment of responsible performance
to achieve?” objective for actioning
• Must have control the planned
over the measure measure?
37
What has been asked of us?

QHSE
Objectives

Continuous
improvement
in health and
safety
management
performance
What are we doing?

QHSE Initiatives
Objectives
New inspection regime,
introducing quarterly
Continuous
inspections.
improvement
in health and Destination Zero
safety Poster, email and
management leaflet campaign aimed
performance encouraging staff to
think what if...not if
only.
Lets introduce our KPIs.....

QHSE Initiatives KPI

Objectives
New inspection regime, Number of
introducing quarterly H&S
Continuous
inspections. Inspections
improvement
in health and Awareness program
safety Poster, email and
Number of
management leaflet campaign aimed
Lost Time
performance encouraging staff to
Accidents
think what if...not if
only.
Our benchmark or baseline...

QHSE Initiatives KPI Last

Objectives year
New inspection regime, Number of
introducing quarterly H&S 3
Continuous
inspections. Inspections
improvement
in health and Destination Zero
safety Poster, email and
Number of
management leaflet campaign aimed
Lost Time 5
performance encouraging staff to
Accidents
think what if...not if
only.
What is our target?

QHSE Initiatives KPI Last 2012

Objectives year Target
New inspection regime, Number of
introducing quarterly H&S 3 4
Continuous
inspections. Inspections
improvement
in health and Destination Zero
safety Poster, email and
Number of
management leaflet campaign aimed
Lost Time 5 2
performance encouraging staff to
Accidents
think what if...not if
only.
Lets measure how we actually did..
QHSE Initiatives KPI Last 2012 Actual
Objectives year Target
New inspection regime, Number of
introducing quarterly H&S 3 4 4
Continuous
inspections. Inspections
improvement
in health and Destination Zero
safety Poster, email and
Number of
management leaflet campaign aimed
Lost Time 5 2 3
performance encouraging staff to
Accidents
think what if...not if
only.
Revisit the KPIs......Success?
Activity

• Establish your company performance evaluation matrix

Activity

45
Review

46
Review Key Points

Mission
focused
Self-
management
Outcome
focused
tool

Objectives

Appraisal SMART
tool

47
Questions

48