Can a KPI (Key Process Indicator) be created against Nonconformances?

[munkee]

My company is moving through a transition phase of identifying nonconformances to now actually doing something about them.

We have a formal procedure for handling product deviations however there are thousands of other nonconformances within our process which are not associated with the product. This may be documentation being incorrect, machine breakdowns etc. This is typically where we are wasting time reworking things because of our own deviations from a process procedure etc.

We now have a system for capturing these "internal" nonconformances. Last year we set a target for raising nonconformances, trying to push the company towards seeing they wont be beaten over the head for identifying an issue (this issue will typically come directly out of our profit at the end of the day).

The new system however is more geared towards raising but then logging an investigation, assigning costs and managing our nonconformances to closure.

I was wondering if anyone has seen/used or can think of an adequate way to mark a KPI against such a system.

I believe having a KPI for each department to do with raising x amount of nonconformances isn't the right way to go as last year we had so much.. well rubbish... coming in to the system just to hit the target.

I want to focus on doing something about them, so the management side. A typical KPI I see is close out on time. However this usually doesn't take in to account the variance in time it actually would take and is usually just a guestimate.

I have looked in to using an index, or some system where you get part of a point for raising, but the bulk of a point for investigating/assigning costs and closing out. Whilst any nonconformances assigned to the person that aren't closed out results in -ve points.

Any ideas? I know this sounds totally unreasonable and silly in some circumstances but without the KPI being there for all to see lots of departments often would rather not bother and get on with "more important" stuff.

 

[PotentCompoundSafety]

Re: Can a KPI be created against nonconformances?

In the environmental, health and safety field we use a couple of KPIs:

1) Percent of on-time completion of corrective actions. A little bit of a twist from the close out days. This one takes into account that some corrective actions make take longer. So if you get them done before the target completion date it's a good thing, overdue is a bad thing.

2) Number of nnoconformances by priority. Category A - severe, Category B - high, Category C - moderate, Category D - low. You get the idea.

Several years ago, an organization called the Global Environmental Management Imitative came up with a document providing all kinds of metrics. Many of these could be adopted to other types of efforts. Go here to download the document.

 

[Bev D]

I like the ranking by severity.

I think you may be a bit confused about the KPI and the goal associated with the KPI. Usually its an unreasonable goal that drives undesired behavior not the metric itself. Unless the metric is not balanced among quality delivery and cost considerations.

How about a metric that simply tracks the number of NCs in each rating category for each department (and trend recurring types of NCs?). THEN determine which specific NC types (in the high severlity category) need to be 'eliminated' through systemic improvements. Form teams, set reasonable timelines and THAT's you goal. not some arbitrary X% reduction...

 

[munkee]

Last year the bonus was associated with identifying nonconformances (the company has gone through years of people hiding these away and not really trying to improve). We have been trying to change the stigma that reporting nonconformances is not going to get you in to trouble. But we ended up with a silly arbitary number used such as you must raise 10 a month. Which as has rightly been suggested drives the wrong behaviours because we were reporting everything and anything.

This year I was put in charge of the whole process and made a database to allow us to raise, manage and analyse nonconformances much more effectively. I do not want us to be using a similar KPI as last year where people are bonused against how many they raise. I want to see people using the system so I figured if people are bonused regarding closing out nonconformances raised where their department is responsible we will create more of a "pull" system than pushing it on to them.

The only issue with this is that there may be a complete drop off with people not report as previous years.

 

[Bev D]

The only issue with this is that there may be a complete drop off with people not report as previous years.

you will get the behavior you reward. that said think about what you are really rewarding people for with this approach.

• 'closing' doesn't mean closing well
• and its easier to close many simple non-value-add NCs than it is to take on the top 3-5 high impact systemic causes.

so ask yourself - how have you helped the business?

 

[munkee]

The way I have set the system up is basically:

Anyone can report a nonconformance event through an online form

This is then assigned/distributed out to the responsible department to investigate, assign costs, determine a root cause and carry out any corrective actions. Preventative action can also be added.

All of these reported events + costs are able to be analysed via pareto and pivot charts so there should be a good indication for each department to see where its nonconformances are.

I like what you are saying about the behaviours that are driven and what truly am I trying to get out of this.

If there was a index produced or some ratio towards the costs you have assigned and the investigation quality etc it might work. But there is still plenty of area for abuse of the system. What is a big cost in some areas is not in others. If the KPI was set against a reduction in nonconformances within your area, this could be simply hidden behind not reporting them. So in that essence there needs to be incentive to report.

Honestly I can see so many angles to take this but there seems too many ways to abuse this. I want the system to be fair, but I dont want that to be an excuse for people not to use it by somewhat believing people will do the right thing.

 

[qualityboi]

Not sure if you can have a key process indicator for a non-conformity, which is not a process but an unplanned result or change. I am thinking that your key process indicator would be for the corrective and preventive action process(es).
Apart from the KPI's already mentioned, we measure repeat non-conformities as a measure of effectivity for corrective/preventive actions taken against the non-conformity.

 

[Raffy]

In our end, Sometimes, you need to issue a nonconformity for KPI to ensure that in the future it will be accomplished, otherwise they will forget it and leave it behind .
Raffy

 

[Chance]

If nonconformities have already been identified then the KPI's should focus on monitoring/correcting those the top 10 of top 5 ones.
Might include:
1. Time the noncoformance found vs time corrective action was implemented
2. % of repeated nonconformances as stated by other posters