ISO 9001:2015 - KPI (Key Performance Indicators) vs. Objectives

Ragnarok

Involved In Discussions
#1
Hi all

I'm confused about the following

An auditor once mentioned a few months ago that in the new ISO standard (ISO 9001:2015) we should not only have objectives but also have KPI

Im still confused about the above ?

Aren't Objectives based on KPI ?

Please if someone can clarify difference and what he meant I would be obliged

Thanks
 
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Sidney Vianna

Post Responsibly
Staff member
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#2
The auditor is, obviously, confused. ISO 9001:2015 does not mandate KPI's. It does, however mandate the need for quality objectives to be established, as well as means for monitoring processes effectiveness, which might include performance indicators (PI).

The term KPI is mandated in the Aerospace Conformity Assessment sector and is a requirement imposed via the AS9101 on to the CB auditors.

As for quality objectives being the same as a KPI, they might not be the same.

Example of a hypothetical scenario:

One of the quality objectives: Improve customer satisfaction by 5% by end of FY2018.
Organization analyzes the main reasons behind customer dissatisfaction and realize that a few areas contribute to the problem:

1. Lead time is excessive
2. On time delivery performance is poor
3. Invoice mistakes create problems for customers


to address these issues, the organization establishes multiple process improvement projects including expedite procurement and develop alternative suppliers with better raw material lead times, improve production planning accuracy and expedited delivery tools, improve invoicing accuracy. Each of these improvement projects could have associated performance indicators and, collectively, they aim at achieving the objective of improving customer satisfaction.
 
Last edited:

Golfman25

Trusted Information Resource
#3
While I agree with Sidney and the example, they can also be both objectives and performance indicators. Take something like On-time delivery -- I want to hit a certain percentage, and I can also use it to monitor how well I am doing each day, week, month and year. I wouldn't get caught up so much in what they are called, but rather focus on whether or not they are actually helpful. Good luck.
 

Ragnarok

Involved In Discussions
#4
Thank you both

Yeah i was bit confused by the auditor comment,especially that we use to have several quality objectives per department such as :

- improve on time delivery by 10%
- Support cases should at the maximum be 5% outside promised Response SLA ( is this acceptable? ...or should it be 0%?)

Was also a bit confused with the distinction quality objectives/performance ndicators .... Aren't all quality objectives based on performance indicators?
 
#5
In a recent gap analysis, Objectives and KPIs were explained in a manner of scale.

Objective: A certain on-time delivery percentage over a period of time.

In a small machine shop were everyone can see all the walls and the dock door, a KPI may not make much sense as the machine operator can see the orders shipping on-time or late and get a sense of the objective.

Now if the same machine operator is working in the machine shop as part of a manufacturing plant that covers several acres of property, the operator may not see all the other operations taking place and product going out the door. In this case, a KPI may measure the scheduled versus actual completion dates of orders machined in the department. Assuming the schedule will allow the finished product to be shipped on time, the machine shop can be confident that the closer they are to meeting the department scheduled date, the greater the likelihood the finished product will ship on time. In this case, the KPI is measuring the on-time completion percentage in the department as one component of the company's overall on-time delivery of the finished product.
 

MrPhish

ISOLove to Dance
#6
I tend to use the term KPI for any metric I want to track at any given level or department in the company. This way everyone (departments, group, etc.) can have their own metrics that are useful to their specific operations and goals within the overall company. Then I create a simple matrix that lists each KPI and links each metric to a specific company Quality Objective (QOs). Now its easy for anyone in the company to show an auditor how THEIR DAILY WORK supports one of the company QOs, by being able to show they accomplish their own local KPIs which in turn supports the company QOs.
 
#8
I tend to use the term KPI for any metric I want to track at any given level or department in the company. This way everyone (departments, group, etc.) can have their own metrics that are useful to their specific operations and goals within the overall company. Then I create a simple matrix that lists each KPI and links each metric to a specific company Quality Objective (QOs). Now its easy for anyone in the company to show an auditor how THEIR DAILY WORK supports one of the company QOs, by being able to show they accomplish their own local KPIs which in turn supports the company QOs.
Could you provide an example for the QO and KPI?

My company use term QO such as
1) Achieve productivity more than 90% by the end of 2019
2) Less than 2 customer complaint by the end of 2019.

Are these QO correct? Or it is actually KPI? If yes, then what can I use for KPI?

I am still confused. I hope you can provide example for both QO and KPI.

Appreciate your respond :)
 
Last edited:

skb76

Starting to get Involved
#9
All,

emmm.. (maybe 'simple' ways..)
(as posted Ragnarok)


On-Time Deliver (quality objectives)
... we use to have several quality objectives per department such as :
- improve on time delivery by 10% ~ (kpi) / (logistic department)
- purchase order to be close within 3 days ~ (kpi) / (sales department)

Integrity on promised Response SLA (quality objectives)
- Support cases should at the maximum be 5% outside promised Response SLA ( is this acceptable? ...or should it be 0%?) ~ (kpi)

p/s advise!..

thanks in advance..
 

Kronos147

Trusted Information Resource
#10
I looked the terms up:

Quality Objective:
A Quality Objective is a quality result that company intends to achieve.

Key Performance Indicator:
A quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance.

How I think about them: Objectives are something that all or most processes are contributing. Key Performance Indicators are more process specific.

If an organization has a Customer Service process, a Production process, and a Shipping process, don't all three contribute to OTD? Yet Cust Service might have a KPI for order processing time, or order accuracy, or bids won. Shipping might have an error rate. Production KPI could be DPPM.
 
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