KPI (Key Process Indicator) - Cost of Non Quality

[alekra]

Dear All,

In last audit the Auditor has made an observation about this KPI, because we used to have as goal less than the rate of the last 12 months. He suggested a value related to $$$ (lucre) of the company. Do you have any similar KPI? Is 0,5% from the lucre aceptable?

Regards,

ALEKRA

[howste]

Without knowing what the current rate is, I can't say if 0.5% is better or worse than what you have now.

[alekra]

Values in the last 6 months:
Dec - 0,4%
Jan - 0,35%
Feb - 0,8%
Mar - 0,9%
Apr - 0,3%

I thought there was a market value per kind of industry (the one I work for is metalic compounds).

Regards!

[SpongeMouse]

Originally Posted by alekra

Dear All,

In last audit the Auditor has made an observation about this KPI, because we used to have as goal less than the rate of the last 12 months. He suggested a value related to $$$ (lucre) of the company. Do you have any similar KPI? Is 0,5% from the lucre aceptable?

Regards,

ALEKRA

i would sugest to bring the issue to the top management first. they would be the one who will have last say on this issue.

and also, maybe you guys (including your management) can have better ideas than that of the audit suggestions, right?

another thing, it would be better if your KPI's from previous year is much better than the current. it will show how much the organization if keen on the improvements on its QCD's (Quality Cost & Delivery)

[TamTom]

Hello,

I'm really interested in discussions about KPI, but here I didn't understand a word.

The value "Cost of Non-Quality" should be a value go down, if I improve??

So what is wrong by have a goal less then the last month rate??

What means "lucre", I only know relations to the turnover or the production costs.

another thing, it would be better if your KPI's from previous year is much better than the current. it will show how much the organization if keen on the improvements on its QCD's (Quality Cost & Delivery)

Why should KPIs from the previous year should be better, than the current?
I thought by Improvement it is the other way around?

I don't know if this (again) is a language problem, but maybe you take the time to explain it to me.

Regards,

TamTom

[JaneB]

TamTom,

I'm not surprised you found it hard to follow - I'm finding it hard to follow myself!

'lucre' means money. So I'm guessing that the original poster is saying their auditor suggested setting a KPI which is related to some kind of financial measurement important to their company (instead of the 'less than last year' one).

Originally Posted by TamTom

The value "Cost of Non-Quality" should be a value go down, if I improve??

Again, hard to work out from what's written. But I think the answer might be yes.

Originally Posted by TamTom

So what is wrong by have a goal less then the last month rate??

It's a bit too vague. eg, If this month is 0.000001% less than last month's rate, is that good or just barely acceptable. It's less, yes, but something more specific would be better. Hence also Howste's comment that without "without knowing what the current rate is, I can't say if 0.5% is better or worse than what you have now."

Originally Posted by TamTom

Why should KPIs from the previous year should be better, than the current?

I am not sure - hard to figure out from what's written. And not necessarily true. 'Better' is a very vague statement. Possibly they mean 'set the target higher'.

I agree that it's a language problem, but not one of translation I think, but of things not very clearly worded or explained. Hope this helps a bit.

[Miner]

Originally Posted by JaneB

'lucre' means money. So I'm guessing that the original poster is saying their auditor suggested setting a KPI which is related to some kind of financial measurement important to their company (instead of the 'less than last year' one).

"lucre" can mean money or profit. In this context, I believe it means profit.

[JaneB]

TamTom-
I should have mentioned, be wary of using the term 'lucre'.

It has a longstanding negative connotation, as in the phrase 'filthy lucre'.

Sometimes used facetiously (as presumably in the post on this thread), but not a term you'd want to say in front of your bosses unless you were pretty sure of your ground.