KPI's for AS9100 Cl. 8.2/8.5 - Bids/Contract Review/Order Entry

[J.Enger]

During our Stage 1 Audit, the auditor stated we needed to add KPI's to our core processes, and we looked at them and decided that the following were our Core Processes: 8.2/8.5 Bids/Contract Review/Order Entry, 8.4 Purchasing, 8.5 Manufacturing, and 10.2 Corrective Action. I have come up with plenty of them for 8.4, 8.5, and 10.2, but having issues with 8.2/8.5.

The problem being that:

• Quotes are not always simple, sometimes its a single part, other times its 50-100 parts or assemblies.
  
• Contract review with different customers, sometimes it easy to review, other times its 2-3 day process at a minimum.
  
• Order Entry takes only a couple of hours as we use our ERP system when creating the quotes and basically generate a standard router for the parts during the RFQ stage, and just transfer it to active order when/if we get the contract, again only a few hours.

I was thinking of doing KPIs based on turn around time for quotes, but dont see how that would work due to the fluctuation in the size of the quotes.

I was looking at was percentage of contracts awarded based on quotes submitted, but the ERP system does not typically get updated with whether we lost the job quoted because it can take several months to get quotes from a customer & nobody is tracking or reviewing open quotes as a whole, as far as I know. Many of our quotes also have several lines items for difference quantities of the same part number.

Any ideas would be helpful.

 

[Golfman25]

Why would you consider quoting/order entry a core process?

We sound similar with quotes that can be all over the place. We look at two things. Percent of quotes won with current customers. And we compute an average response time for quotes, with a target of less than 2 weeks. The short ones average out the longer ones.

Are the numbers that helpful? Not all that much. We could be successful with out measuring them. But we needed something, and they work.

 

[RoxaneB]

During our Stage 1 Audit, the auditor stated we needed to add KPI's to our core processes, and we looked at them and decided that the following were our Core Processes: 8.2/8.5 Bids/Contract Review/Order Entry, 8.4 Purchasing, 8.5 Manufacturing, and 10.2 Corrective Action. I have come up with plenty of them for 8.4, 8.5, and 10.2, but having issues with 8.2/8.5.

I'm puzzled why there was a decision needed regarding the determination of your core processes. Or was this more to say it was an exercise in determining what was core versus support.

As for the auditor telling you what your organization needed, please tell me you know where in the standard it says metrics are needed for core processes. Not looking for other Cove members to point out where/if it is said...this is an opportunity for the OP to understand that it's what the standard requires, not what the auditor wants.

Similar to Golfman, I'm uncertain why the bidding process was deemed to be a core process. That said, my current organization has a metric for the bidding process reported to the Board on a quarterly basis.

It used be "% of wins". The problem being...what's a win? The process owner reporting the results considered it a win if we advanced to the next round in the bidding process. So, if there were 3 stages and we made it through the first 2, our "% of wins" was 66%, but with no work to show for it.

We have several aggressive growth targets for the next few years, which is why the bidding process is reported on to the Board. The metric has evolved to something along the lines of "$ won". Essentially, we don't want our growth to be based on helter-skelter bidding. We have a focused, dedicated approach or plan to our growth and want to do smart bidding. So, rather than report on "% wins" with no dollars to show for it, they'll now be reporting if we have $$$ to show for our efforts.

It can be a bit of a lagging indicator - work may be done months in advance of an actual determination on if we've been awarded the work - but it's a bit a two-part, accounting metric.

We'll show the $$$ in the bidding pipe...and the $$$ that is coming our way once/if we're awarded the job.

 

[J.Enger]

The auditor had pointed out that in our procedures, we have what are considered KPI's in the text, but they are just not identified as KPI's. I believe they are as we review them at Mgmt Review (OTD, Scrap $, Rework $, Supplier Performance, etc).

As for Quoting/Contract Review/Order Entry being a Core process, that came more from general discussion among top management. The overwhelming point being if we don't win bids, we won't have work, so by default it is a core process. I don't 100% agree with it, but I see where they are coming from.


Roxanne, I was thinking along the same lines about Money Awarded vs Money if Awarded as a KPI for 8.2/8.5, just have to see if I can find that information out from our ERP system, which means i need more access to it as well.

 

[dsanabria]

During our Stage 1 Audit, the auditor stated we needed to add KPI's to our core processes, and we looked at them and decided that the following were our Core Processes: 8.2/8.5 Bids/Contract Review/Order Entry, 8.4 Purchasing, 8.5 Manufacturing, and 10.2 Corrective Action. I have come up with plenty of them for 8.4, 8.5, and 10.2, but having issues with 8.2/8.5.

The problem being that:

• Quotes are not always simple, sometimes its a single part, other times its 50-100 parts or assemblies.
  
• Contract review with different customers, sometimes it easy to review, other times its 2-3 day process at a minimum.
  
• Order Entry takes only a couple of hours as we use our ERP system when creating the quotes and basically generate a standard router for the parts during the RFQ stage, and just transfer it to active order when/if we get the contract, again only a few hours.

I was thinking of doing KPIs based on turn around time for quotes, but dont see how that would work due to the fluctuation in the size of the quotes.

I was looking at was percentage of contracts awarded based on quotes submitted, but the ERP system does not typically get updated with whether we lost the job quoted because it can take several months to get quotes from a customer & nobody is tracking or reviewing open quotes as a whole, as far as I know. Many of our quotes also have several lines items for difference quantities of the same part number.

Any ideas would be helpful.

Some ot the metrics we look at is OTD - O Time Delivery - (what was th quoted day vs the actual delivery date. Another one is the amount of time that a quote takes to go thru the process.

That means - what you really looking is how long did a quote sat on a desk and why...

 

[Big Jim]

A set of four quality objectives can be applied as Key Performance Indicators (KPI) in such a way as to handle each of your core processes. You can use any one objective/KPI more than once.

The hint from the old standard came from 8.4, analysis of data. It is still there in 9.3 in the new standard but it isn't as clear as they muddied it up with three additional topics that have more to do with the application of analysis and evaluation.

The four topics are:
1. Customer satisfaction
2. Product quality
3. On-time delivery (a common measure of the system overall)
4. Supplier performance

Objectives need to be measurable and by definition need goals. An example of a reasonable set then could be:

1. Customer satisfaction of 95% or above by annual customer survey.
2. First pass yield of 98% or above (how many finished goods make it through final inspection without rework).
3. On-time delivery of 95%
4, Supplier performance of 95% or higher (supplier quality & supplier on-time delivery.

For whatever name you give to 8.2, two or three of the one mentioned about would be appropriate. If they deal with the customer, then customer satisfaction would be an appropriate KPI. If they deal with gathering customer requirements, then product quality and on-time delivery would be appropriate.

For whatever name you give to 8.5, product quality and on-time delivery would be appropriate KPI.

I hope this helps.

 

[J.Enger]

I'm puzzled why there was a decision needed regarding the determination of your core processes. Or was this more to say it was an exercise in determining what was core versus support.

As for the auditor telling you what your organization needed, please tell me you know where in the standard it says metrics are needed for core processes. Not looking for other Cove members to point out where/if it is said...this is an opportunity for the OP to understand that it's what the standard requires, not what the auditor wants.

Similar to Golfman, I'm uncertain why the bidding process was deemed to be a core process. That said, my current organization has a metric for the bidding process reported to the Board on a quarterly basis.

It used be "% of wins". The problem being...what's a win? The process owner reporting the results considered it a win if we advanced to the next round in the bidding process. So, if there were 3 stages and we made it through the first 2, our "% of wins" was 66%, but with no work to show for it.

We have several aggressive growth targets for the next few years, which is why the bidding process is reported on to the Board. The metric has evolved to something along the lines of "$ won". Essentially, we don't want our growth to be based on helter-skelter bidding. We have a focused, dedicated approach or plan to our growth and want to do smart bidding. So, rather than report on "% wins" with no dollars to show for it, they'll now be reporting if we have $$$ to show for our efforts.

It can be a bit of a lagging indicator - work may be done months in advance of an actual determination on if we've been awarded the work - but it's a bit a two-part, accounting metric.

We'll show the $$$ in the bidding pipe...and the $$$ that is coming our way once/if we're awarded the job.

Under 4.4.1 c. the standard states "determine and apply the criteria and methods (including monitoring, measurements and related performance indicators) needed to ensure the effective operation and control of these processes;".

Using the Interaction processes map attached, I have 25 different sections of the standard called out, showing their interactions. Our CB for our stage 2 Audit is telling me we need metrics for all 25 sections.

The Metrics we have set up are:

Management Process

• Customer Satisfaction at 80% or better (9.1.2)
• Supplier Corrective Action Response time (10.2)

Product Realization Process

• Scrap Rate ( in $) at 3% or less (8.5)
• Rework Rate (in $) at 3% or less (8.5)
• Supplier Non-conforming Product at 50,000 PPM (95%) Acceptance Level (8.4, 8.6)
• Customer Satisfaction at 80% or better (8.2)

Support Process

• Supplier On-Time Delivery at 95% or better (8.4)

While we were going through our Stage 1 Audit, our CB indicated that we needed to add KPI's to our core processes (in the written procedures that correspond to them), which i have highlighted under the Product Realization process. He gave no indication that we needed metrics for every one of the sections.

I dont have any written procedures for many of these other than what is in the QMS Manual. I have listed my written procedures below and if they have KPI's.

QP-0500 Leadership
QP-0715 Calibration
QP-0720 Competence
QP-0750 Documented Information
QP-0810 Operational Planning and Control
QP-0820 Requirements for Products and Services (KPI's)
QP-0840 Control of Externally Provided Processes, Products and Services(KPI's)
QP-0851 Product and Service (KPI's)
QP-0852 Identification and Traceability
QP-0854 Preservation
QP-0870 Control of Nonconforming Product
QP-0920 Internal Audit
QP-0930 Management Review
QP-1020 Nonconformity and Corrective Action(KPI's)

What are your thoughts? Alot of these i dont see a ggod way to create KPIs for them, as they are more instructive or explaining the process.

 

[Golfman25]

While I am not familiar with the specifics of AS, I would disagree with your auditor. First, the kpi does not have to be in the written procedure and shouldn't. You don't want to have to update the procedure if you decide to change a kpi.

Second, 25 kpis is overkill. I think from a business standpoint the ones you have identified are good. Anything else may just be noise.

You'll have to figure out how to deal with your auditor. Good luck.

 

[J.Enger]

We rearranged our Interaction chart, and came up with several metrics.

Management Resources
Customer OTD
Return Rate ( Returned vs. Total Sales)

Sales/Contract Revew
Sales - Budget vs. Acutal
Order Acknowledgement (% of Orders ACK in 7 days)

Facilities
Machine Downtime(Hours)
Repair Costs

Human Resources
Turnover Rate
Unauthorized Absenteeism

Purchasing
Supplier OTD
Supplier Quality

QMS
Items found out of Calibration
Cost of Calibration

Manufacturing
Rework % of Sales
Scrap % of Sales

 

[dsanabria]

We rearranged our Interaction chart, and came up with several metrics.

Management Resources
Customer OTD
Return Rate ( Returned vs. Total Sales)

Sales/Contract Revew
Sales - Budget vs. Acutal
Order Acknowledgement (% of Orders ACK in 7 days)

Facilities
Machine Downtime(Hours)
Repair Costs

Human Resources
Turnover Rate
Unauthorized Absenteeism

Purchasing
Supplier OTD
Supplier Quality

QMS
Items found out of Calibration
Cost of Calibration

Manufacturing
Rework % of Sales
Scrap % of Sales

Keep it simple

Most companies measure sales / contract review, purchasing and manufacturing / production

Those are considered the money making processes and the ones that you should keep measuring and improving.