NC: Lack of efficiency measurement for scheduling/shipping: clause 5.1.1

[howste]

Tracking shipments using premium freight can be an efficiency measurement because you are relating how much product gets shipped to how many dollars you spent. Maybe I stated it wrong above. How about instead of a percent, you measure pounds of product shipped per dollar?

If your trucks are almost always full, your percent of truckload capacity utilized will be pretty efficient. If you're not at 100% there's still room to improve, and it would be good to know if the percent goes down. Why not measure this instead of something meaningless to make the auditor happy?

By the way, the ISO definition of efficiency is the "relationship between the result achieved and the resources used." The resources don't have to be "consumed" to be used. The resources could be floorspace, dock doors, personnel, time, dollars, etc.

I'm sure the reason the efficiency measurement is required is because OEMs want efficient suppliers so they can reduce part cost. Should it be required?

 

[Coury Ferguson]

Thank you for your comments. To address your questions, and provide further background:

1) Top Management review - He has clarified his stance on this to be that he will review our effectiveness and efficiency of our key processes. We defined Scheduling/Shipping as a key process. Perhaps that was a mistake.

Well, if it was defined as a key process, then the Auditor maybe right. However, identifying Scheduling/Shipping as critical...how/who was this determined by? I would not remove it as a critical process since there are ways to improve that process by, reducing premium freight costs, and improving delivery times to the customer. I might consider it as a "Quality Objective" rather than a key process (but I am not really sure if TS requires Objectives be established, even though TS was tailored around ISO9001).

2) Auditor perscription for efficiency measurement - No he was quite explicit that efficiency was measurement of Output/Resource Input. The example he used was transactions / hour. This same topic came up with this auditor at a sister plant, and he was only satisfied when they developed 6 charts showing schedules per employee hour.

I still feel that the Auditor was only suggesting, even though this came up with the same auditor at your sister plant. That being said, maybe the auditor might have been stepping out of the scope and brought the subjective aspect on this issue, not the objective aspect. Which could be interpreted as telling your company what they shall do and that is not what the standard means.

3) Preventative action? Please clarify

I didn't really see the preventative action in the two ideas that came up, but maybe I was reading it incorrectly.

 

[howste]

I didn't really see the preventative action in the two ideas that came up, but maybe I was reading it incorrectly.

I believe the confusion is coming from what you're calling a "preventative action."

In the ISO 9000 definitions (where the terms are defined for TS) a preventive action prevents occurrence of a potential nonconformity. A corrective action prevents recurrence of a detected nonconformity.

Since the auditor wrote it up, there can be no preventive action - it's already been detected. I think what you meant is the action that will prevent recurrence of the nonconformity - a corrective action.

 

[tyker]

This is the sort of thread I most appreciate in the Cove, one which raises issues of auditor perception, concentrates on wording of the standard which can easily be overlooked and makes me think about the way my organization performs.

The big issue for me is that I have often seen findings based on "process effectiveness" but hardly ever consider the "efficiency" element as a seperate topic in my thought processes.

Reviewing what we do at my present company we do have both effectiveness and efficiency covered in our monitoring/measurement/review activities but efficiency is concentrated on manufacturing and for other processes is often incorporated as an improvement project.

I realize I haven't expressed this very well (it's early) but, for example, we currently have a project underway to improve our logistics activity. This incorporates measurement of efficiency of the process, setting targets for improvement and planning/reviewing achievements of these targets.
I can demonstrate, via this project, compliance with the TS requirements but when the project is completed our main measurement for this activity will again revert to effectiveness and we'll deploy resources to improve a different process.

The key point is it works for us and our limited resources are used where we see the potential benefits.

I've enjoyed reading all the replies.

 

[Coury Ferguson]

I believe the confusion is coming from what you're calling a "preventative action."

In the ISO 9000 definitions (where the terms are defined for TS) a preventive action prevents occurrence of a potential nonconformity. A corrective action prevents recurrence of a detected nonconformity.

Since the auditor wrote it up, there can be no preventive action - it's already been detected. I think what you meant is the action that will prevent recurrence of the nonconformity - a corrective action.

Thanks Howste. You are right.

 

[vanputten]

I think the best response is to not really measure process efficiency but to figure out how to answer the N/C without any improvement. After all, who really cares about efficiency?

Make sure that certification is just a piece of paper.

Regards,

Dirk

 

[triner]

I think the best response is to not really measure process efficiency but to figure out how to answer the N/C without any improvement. After all, who really cares about efficiency?

Make sure that certification is just a piece of paper.

Regards,

Dirk

Sarcasm noted.

The efficiency being discussed specifically, is the efficiency of support activities such as scheduling, cost estimating, APQP preparation, etc. NOT the efficiency of the production process. I agree at some point in time, the support function will make fertile ground for improvement, but at this time, my organization and customer will both be best served by focusing on eliminating chronic defects produced by our process and identifying and mitigating areas where failure will cause hardship for our customer. Improving the efficiency of my scheduler so that they can produce a schedule in 1 hour instead of 2 will not benefit the customer.

I believe I will consume more resources creating and maintaining a measurement that will be ignored than I will save by tracking and reacting to that measurement.

I understand the intention of the TS standard. To create a QMS that focuses more on effectivness of the system rather than compliance to the system. However, that intention gets lost when we blindly create meaningless measurements to satisfy a vaguely written sentence.

In your effort to make the certificate meaningful, how have you addressed efficiency measurements for support functions?

 

[vanputten]

"In your effort to make the certificate meaningful, how have you addressed efficiency measurements for support functions?"

Excellent question.

We have many Profit and Loss meetings. The poeple that attend these meetings look at resources used to accomplish our goals. Efficiency is not really reviewed specific to individual processes.

We have never been audited for efficiency requirements. Never.

I think about this issue with a big grin. "Key processes," "supporting processes", etc. There sure is a lot of variation and interpretation in the conformity assessment world.

Can anyone tell me where the requirements are for key processes and supporting processes?

Regards,

Dirk

 

[howste]

5.1.1 requires that you review "support processes" for efficiency. I don't know how you can do it without having defined them. There is no reference in the standard to "key processes."

However, the IATF guidance document in 5.1.1 references both "key processes" and "support processes." This is probably where the terms come from. There is no guidance about how to determine what they are...

 

[vanputten]

Thank you Howtse.

Great stuff.

Sincerely,

Dirk