Performance Indicators for Quality Management Systems (QMS) in Engineering Companies

J

Juliasun

Hallo, guys! I just need to have some help on performance indicators for QMS. Does anybody have experience for design engineering companies?
 
C

ccochran

Juliasun,

Hello! A for-profit engineering company would share many of the same performance indicators that any other business enterprise would. These measures struck me as being particularly relevant to an engineer company, though:


Cash flow: How much money is *really* left over at the end of the month after expenses are paid (irrespective of the net income number generated by accounting).
Revenue per employee: Simply take the revenue received each period and divide it by the total number of employees. This can indicate, on average, how much money per person the company is receiving. This can help limit the amount of overhead and non-productive human resources the organization utilizes.
Adherence to budget: Budgets are based on quotes that the engineeering company provides, so they need to track close to reality. Failure to meet budget means the company may lose money.
Adherence to project plan: Each job at the engineering company is probably accompanied by a project plan. Whether or not the plan is accurate and being followed as a huge bearing on the comany's success.
Customer satisfaction index: Develop a very simple and streamlined tool for gauging customer satisfaction after each project. Consider probing different levels of customers. You'll probably learn a lot and have plenty of opportunities for making improvements.


Good luck,
Craig

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Craig Cochran
Center for International Standards and Quality
Georgia Institute of Technology
 

Govind

Super Moderator
Leader
Super Moderator
Juliasun said:
Hallo, guys! I just need to have some help on performance indicators for QMS. Does anybody have experience for design engineering companies?

Guys,
Who has an experience in development of performance indicators in designengineering company for design, HR and procurements processes and also performance indicators for projects implementation, marketing and other areas please share your knowledge: methods, questions, indicators, charts and other tools.
Thank you in advance.

Juliasun,
You have posted a similar posting in Statistical Techniques! see above.
I replied in that location without knowing that you have posted here also.
Govind.
 

Manoj Mathur

Quite Involved in Discussions
Some performance indicators are as below


1. Percent of certified suppliers : Certified suppliers require, at the minimum, supplier's process has been certified to the point that there is no incoming material inspection required.

2. Percent reduction in supplier base : This measurement is utilized to review improvements in quality of source of supplier.

3. Percent increase in inventory turnover : Inventory turnover is looked at as a measure of material throughput. The measurement is completed by compiling the annual's cost of sales and dividing it by current total inventory.

4. Percent increase in dollars of product output per employee : The measurement is a measure of productivity. It determines how effectively people and resources are being used in the production of the product. The calculation would be annual's sales divided by total number of employees.

5. Percentage reduction in cycle Time: The reduction in cycle time is measured by product line. The measurement is the ratio calculated by dividing actual cycle time by the theoretical cycle time.

6. Percent increase in number of jobs mastered per employee : The purpose of increasing the number of jobs mastered per employee is not only for improvement in flexibility, but to help facilitate the habit of improvement. This is accomplished by continuously providing a "different set of eyes" engaged in the process.

7. Percent increase of process capable equipment : The first step must be to establish that the equipment is statistically in control, then measure process capability. The measure is percent of machines or processes at CP = 2.0.

8. Percent increase in overall equipment effectiveness : Machine effectiveness is availability (hours running divided by scheduled run hours) times performance (actual machine cycle or rate divided by theoretical machine cycle or rate)

9. Percent reduction in warranty costs : Measure and track monthly by product line in dollars as percent of sales and as percent of operating cost. Utilize trend charts.

10. Percent increase in on-time delivery : Measurement shows whether the product was shipped to the customer in the time frame promised. Actual measurement is orders shipped on time divided by total orders shipped.

11. Percent of management time spent on leading or fostering innovation : Percent Time This is measured individually from personal calendars and estimates; summarized weekly and reported monthly.



Manoj Mathur
 
B

BadgerMan

Juliasun said:
Does anybody have experience for design engineering companies?

Project lead times

Pre and post launch design changes

Spending vs. plan micro and macro

Percentage of milestones achieved/planned forward

Product reliability/infant mortality
 
J

Juliasun

Thank to everybody for help.

We have passed pre-audit and auditors have found that we don't use key performance indicators for HR management, procurement, marketing, internal audit, management review, calibration and design processes.

I determined following indicators for each process:
1. PROCESS AND SERVICE MEASUREMENT

No. INDICATOR
1 Customer feedback:
2 Satisfied, %
3 Unsatisfied, %
4 Project completed on time, %
5 Tenders won, %
6 Large projects, %
7 Customer complaints, No.
8 Manhours
9 Project manhours
10 Administration/Company development manhours
11 Planned projects, %
12 Outsourcers involved in projects, No


2. PERSONNEL ACHIVEMENTS

No. INDICATOR
1 Participation in projects, %
2 Participation in large projects, %
3 Assignments completed on time, %
4 Senior staff, %
5 Junior staff, %
6 Discipline balance
7 Staff histogram

3. HR MEASUREMENT

No. INDICATOR
1 Training, %
2 Training (% of planned)
3 Approved trainers No, % of personnel
4 Staff No.
5 PC No
6 Staff with PC, %
7 Geotechnical staff, %

4. PROCUREMENT MEASUREMENT

No. INDICATOR
1 Choice of successful suppliers, %
2 Complaints to suppliers from Company, No.
3 Complaints from customers on Company outsource, No.
4 Customer satisfied, %
5 PO Nos.
6 Order confirmation Nos 9% of PO)

5. MARKETING MEASUREMENT

No. INDICATOR
1 Respondents to Customer survey, % of sent questionnaires
2 Tender preparation manhours
3 % of tender preparation (versus total manhours)
3 % of successful tenders
4 Presentations to potential customers, No.
5 Customer Audits No.
6 Pre-qualification questionnaires filled and submitted No.
7 Implemented preventive actions No.


6. MANAGEMENT

No. INDICATOR
1 Management personnel, %
2 Customers satisfied with project management, No., %
3 Complaints No.

7. AUDITS
Compliance with audit plan
Completed audits versus planned, %
Corrective actions No.
Audit reccomendations made versus accepted, %
% of reccomendations implemented.

8. CONSULTING PROCESS MEASUREMENT
% of consultees satisfied
Complaints No.
% of consulting projects
% of manhours spent on consulting

9. GEOTECHNICAL PROCESS MEASUREMENT
% of customers satisfied
% of work done by outsourced
% of geotechnical projects
% of manhours

10. MEASUREMENT OF EACH PROJECT
On time
Resources enough
Customer complaints
% personnel completed tasks in time
Non-conforming product No.
Total changes (revisions of docs)
Changes due to customer requirements
Customer satisfied

Could you please review my performance indicators and make some comments.
 
Last edited by a moderator:

RoxaneB

Change Agent and Data Storyteller
Super Moderator
Juliasun said:
We have passed pre-audit and auditors have found that we don't use key performance indicators for HR management, procurement, marketing, internal audit, management review, calibration and design processes.

Congratulations on passing! :applause:

Do you need Key Indicators for all of these processes? Remember, it's your system, not your auditors.

Juliasun said:
I determined following indicators for each process:

How did you come up with them? Did the owners of the processes have input?

Have you determined the points for each of these indicators when the process will be deemed out of control and/or action must be taken to get the process back under control?

My comments/thoughts are in blue from now on...

1. PROCESS AND SERVICE MEASUREMENT

No. INDICATOR
1 Customer feedback Is this for surveys sent out/questions asked or for the number of Customers that reply?
2 Satisfied, %
3 Unsatisfied, % What determines is they are satisfied or unsatisfied?
4 Project completed on time, %
5 Tenders won, % What about tenders submitted? I mean you send out one, win it and have a 100% KPI....or you could send out 50, win 45 and have 90% KPI. The % doesn't mean much to me as it doesn't show truly how busy and successful we were
6 Large projects, % What consitutes a large project?
7 Customer complaints, No. Just a thought here...we divide our Customer Complaints into 4 types - Invoicing, Service-Sales, Service-Mill and Quality. It allows for a better analysis of our Customer Complaints so that we can take steps to reduce them.
8 Manhours
9 Project manhours
10 Administration/Company development manhours
11 Planned projects, %
12 Outsourcers involved in projects, No Would you not want percentage here...maybe two Indicators? One showing the % of projects where outsourcing was involved and the number of outsources involved per project?


2. PERSONNEL ACHIVEMENTS

No. INDICATOR
1 Participation in projects, % How is this measured? And what if the person is only assigned to non-large projects? Do they score low in #2 by no fault of their own?
2 Participation in large projects, %
3 Assignments completed on time, %
4 Senior staff, % Could you explain #4 and #5 to me, please? I'm not sure what you are measuring here.
5 Junior staff, %
6 Discipline balance Could you explain #6 and #7 to me please? I'm not sure what you are measuring here.
7 Staff histogram

As most people where I work are part of a team, it is the team's perfomance that is assessed. However, there are some individual Key Indicators that focus on outstanding training > 60 days (i.e., they still have people to train beyond 60 days after the documents release) and Employee Requests (i.e., suggestion box) open > 60 days.

3. HR MEASUREMENT

No. INDICATOR
1 Training, %
2 Training (% of planned)
3 Approved trainers No, % of personnel Is this number supposed to go up or remain constant?
4 Staff No. Same comment as above.
5 PC No
6 Staff with PC, %
7 Geotechnical staff, %

Our HR departments focuses on safety related issues, outstanding training > 60 days, and Employee Requests.

4. PROCUREMENT MEASUREMENT

No. INDICATOR
1 Choice of successful suppliers, %
2 Complaints to suppliers from Company, No.
3 Complaints from customers on Company outsource, No.
4 Customer satisfied, %
5 PO Nos.
6 Order confirmation Nos 9% of PO)

What about Supplier Reviews being conducted? Or successful Supplier Reviews?

5. MARKETING MEASUREMENT

No. INDICATOR
1 Respondents to Customer survey, % of sent questionnaires Does this repeat #1-#3 of Process and Service Measurement?[/quote]
2 Tender preparation manhours
3 % of tender preparation (versus total manhours)
3 % of successful tenders Is this the same as #5 of Process and Service Measurement?
4 Presentations to potential customers, No.
5 Customer Audits No. You audit Customers? Interesting. Could you tell me more about this, please?
6 Pre-qualification questionnaires filled and submitted No.
7 Implemented preventive actions No. I would think that everyone is capable of implementing preventive actions yet so far this is the first department to have it as an indicator.

6. MANAGEMENT

No. INDICATOR
1 Management personnel, % Is this number supposed to go up or remain constant?
2 Customers satisfied with project management, No., % Which Customers and how will you measure this?
3 Complaints No.

When you say Management are you referring to senior management, all management, or project management?

7. AUDITS
Compliance with audit plan
Completed audits versus planned, %
Corrective actions No. Do you expect this number to go up or remain constant? Be careful....a high number of corrective actions does not necessarily mean a good audit
Audit reccomendations made versus accepted, %
% of reccomendations implemented.

8. CONSULTING PROCESS MEASUREMENT
% of consultees satisfied
Complaints No.
% of consulting projects
% of manhours spent on consulting

You have Complaints in a lot of departments. How will they be obtaining the data for their indicators? Have you considered having one department be the central data collector?

9. GEOTECHNICAL PROCESS MEASUREMENT
% of customers satisfied
% of work done by outsourced
% of geotechnical projects
% of manhours

10. MEASUREMENT OF EACH PROJECT
On time
Resources enough
Customer complaints
% personnel completed tasks in time
Non-conforming product No.
Total changes (revisions of docs)
Changes due to customer requirements
Customer satisfied

If you would like, I can send you a list of our Key Indicators for our support processes like Purchasing, HR, etc. If you are interested, PM me, Juliasun, with your email address.
 
C

ccochran

Juliasun,

Nice work with the metrics. The only feedback I would provide is that there seem to be a lot of them! Do you think possibly you have too many? I counted at least 60 metrics. The number is mind-numbing, and many of these metrics seem to be redundant.

I would cut the list by about 75%, if not more. You have so many metrics here that people can't possibly understand what is important from a strategic level. "We're measuring everything, so everything must be important." In truth, not everything has critical importance. The starting point for this whole exercise is to determine the organization-wide key measures first, *then* determine the process metrics that support the organization-wide key measures. If you do this, I think the list will automatically be trimmed.

Again, nice work. Roxanne's comments about defining each of the metrics is another huge issue. I wouldn't even start thinking about defining these until you've gotten rid of a few, though.

Craig

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Craig Cochran
Center for International Standards and Quality
Georgia Institute of Technology
 
J

Juliasun

Craig,
Thank you for your criticism.

In fact, I proposed such type of various indicators to choose later about 60-70% of them as main focused.
That's why I gave all the examples to get your opinions on the matter.
 

RoxaneB

Change Agent and Data Storyteller
Super Moderator
Juliasun,

I have emailed you some information on Key Indicators. Have you tried doing a search here on the Cove for more information on Key Indicators. I'm certain we've discussed the concept of them elsewhere.
 
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