Criteria for setting a target value against a quality objective/KPI?

[samsung]

What I want to know is the criteria on which a target is set. For example, in our company, maintenance performance is evaluated based on the average equipment downtime on monthly basis. Each Maintenance Deptt. sets a target for downtime in Hour:Minutes based on the past performance and compares with the actual breakdown/ downtime hours in a month.

Is this the correct method for setting targets based on past performance ? Can there be some benchmark for setting the targets as long as downtime is concerned?

Your valuable info. is appreciated.

Best regards,

[Jim Wynne]

Originally Posted by samsung

What I want to know is the criteria on which a target is set. For example, in our company, maintenance performance is evaluated based on the average equipment downtime on monthly basis. Each Maintenance Deptt. sets a target for downtime in Hour:Minutes based on the past performance and compares with the actual breakdown/ downtime hours in a month.

Is this the correct method for setting targets based on past performance ? Can there be some benchmark for setting the targets as long as downtime is concerned?

Your valuable info. is appreciated.

Best regards,

Past performance may be all you have to go by, and it's a little dangerous to look for benchmarks if the targets aren't realistic in your own situation. What you need to be concerned with is (A) the causes of downtime and (B) the economic realities of improving it. If you decrease downtime and productivity isn't improved (the working machines aren't producing anything) you've wasted money in an effort to save money.

Once you understand the cost of downtime you can develop a plan for improvement, and justify monies spent to improve it.

[samsung]

Originally Posted by Jim Wynne

Past performance may be all you have to go by, and it's a little dangerous to look for benchmarks if the targets aren't realistic in your own situation. What you need to be concerned with is (A) the causes of downtime and (B) the economic realities of improving it. If you decrease downtime and productivity isn't improved (the working machines aren't producing anything) you've wasted money in an effort to save money.

Once you understand the cost of downtime you can develop a plan for improvement, and justify monies spent to improve it.

Thank you Sir, a good piece of advice. Rightly said, decreased downtime does not necessarily result into higher productivity. Higher frequency of breakdowns (even with low average downtime), in turn, adversely affects the productivity & product quality as well.

By 'Developing an improvement plan' does it mean strengthening the process of PM / part replacement ( increasing the frequency of PM and the like ) if it costs less than the cost of B/D ?

One more query - depending on the past performance (consistent achievement, e.g. 3 Hrs. against a target of 5 Hrs.), is it reasonable to reduce the target (e.g. from 5 to 4 Hrs.) ?

(Our staff argue that it should not be reduced since the target is set for the year and then divided over months. Moreover, the CB auditors expect 'improvement' in this KPI even if it hasn't affected the productivity.)

Best regards,

[Big Jim]

Most any goal setting activity should start with any history available and then some consideration of where you really want to be as well as what is needed to get there. It also usually helps to set goals that are slightly higher than history, something slightly out of reach, but with within your grasp with a little bit of stretching.

In other words, balance your history with some reasoned improvements.

[Jennifer Kirley]

Good responses so far.

I am often wary of target setting. It can seem like a Pin the Tail On the Donkey game.

That said, machine performance and capability can be tracked and studied. If it were up to me, I would pick aspects that impact productivity and factors that can be controlled. For example, I would set a target for machine uptime knowing that hot environments cause it to shut down, but we are trying to control the environment with air movement so as to maximize the machine's uptime.

In other words, I would make the target based on an actual initiative or process based action, not just "Let's make sure our machines do XYZ."

[Steve Prevette]

Originally Posted by samsung

Is this the correct method for setting targets based on past performance ? Can there be some benchmark for setting the targets as long as downtime is concerned?

As with many questions about quality, there is rarely one "correct method". In fact, if you happen to follow Dr. Deming's work, his 14 points stated do NOT set numerical targets at all.

I do have a lot of information at http://www.hanford.gov/rl/?page=1156&parent=1144 if you are interested in setting goals through statistical trending. Basically the goals become directional - if your current process is stable and predictable, then is it performing where it needs to in order to make a profit, be competitive, be efficient and effective. If not, the goal becomes to improve the process, with the improvement being measured by trending on a control chart.

[samsung]

Thanks to Jennifer & Big Jim for your informative posts which opens up new dimensions for the target setting process.

Thanks to Steve Prevette for the valuable thoughts & for the link which does possess wealth of information worthy for a starter like me.

Best regards,