Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results, etc

[JaneB]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

I'll agree with DRM2u. Any metric which isn't directly tied to profitability and stated in dollars is worthless. I see way to many measurements for measurements sake. It is about turning a profit. Without profit, you're dead -- period. Good luck.

I agree profit is highly important to a commercial enterprise. I disagree that it's the be-all and end-all of everything. If the only thing was profit, you could just take a gun down to your local bank and stick 'em up. Or make a sale to any customer, provided it benefited YOUR bottom line.

You'd certainly turn a profit.

 

[Big Jim]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

I'll agree with DRM2u. Any metric which isn't directly tied to profitability and stated in dollars is worthless. I see way to many measurements for measurements sake. It is about turning a profit. Without profit, you're dead -- period. Good luck.

And without the other stuff there is no heart and soul to a company and eventually a company that focuses only on the bottom line will also be dead.

 

[JaneB]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

eventually a company that focuses only on the bottom line will also be dead.

Yes, it will. I've heard the 'all that matters is $$ and profit' argument a lot of times. It never makes for good, let alone great and enduring companies.

 

[Golfman25]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

You can ignore the need to make a profit all you want. You can do all the fancy measurements you want, but if you don't trun a profit you won't be around very long. My point is, if your going to measure it, you may as well put it terms of profitability. Take one of the favorite measurments -- on-time delivery. Knowing that I am 95%, 98% or 100% on-time is worthless. Wouldn't it be better to put it in terms of dollars outstanding? I could be 98% on time with that 2% late representing $100,000 or $100. The first amount I might want to do something, the second probably not. Good luck.

 

[Big Jim]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

You can ignore the need to make a profit all you want. You can do all the fancy measurements you want, but if you don't trun a profit you won't be around very long. My point is, if your going to measure it, you may as well put it terms of profitability. Take one of the favorite measurments -- on-time delivery. Knowing that I am 95%, 98% or 100% on-time is worthless. Wouldn't it be better to put it in terms of dollars outstanding? I could be 98% on time with that 2% late representing $100,000 or $100. The first amount I might want to do something, the second probably not. Good luck.

Of course they can't ignore the bottom line. It must be part of the balance. A company that focuses on the bottom line and one the focuses only on the other stuff will each end up dead. All in proper balance.

As far as on time delivery as a metric to follow, it is becomming more and more important in maintaining customer satisfaction (the true origin of profit). AS9100C specifically says that measuring OTD has to be part of their customer satisfaction measurement.

 

[JaneB]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

You can ignore the need to make a profit all you want.

I don't think you've got your 'listening ears' on.

There is and has been no 'ignoring the need to make a profit' in this thread, and I don't know why you are insisting on responding as though there were. eg:

I agree profit is highly important to a commercial enterprise. I disagree that it's the be-all and end-all of everything.

Why insist that it is the ONLY metric that ever should or must prevail? Thought that idea went out long ago, but obviously it still prevails in pockets.

Have you never come across the Balanced Score Card, for example? Or the idea of sustainability?

 

[Golfman25]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

I think you're missing the point. I never said profit was the "be all, end all." I also never said that profit was the ONLY metric that should prevail.

What I said was that any metric not stated in dollars (ie; dollars in vs. dollars out = profit) is worthless. I then gave an example using deliveries. Without the dollar conversion on a metric, it won't tell you weather it is worth spending resources to "get better."

Time after time I see people with all these metrics and pretty charts posted on the walls. When I ask, why are you measuring this and how does it affect the profitability of your company, all to often I get the deer in the headllight look. They read it in a book or learned it at a seminar somewhere. They fail to connect the dots and wonder why their management doesn't "get it" or why their company doesn't get any better.

 

[Big Jim]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

What I said was that any metric not stated in dollars (ie; dollars in vs. dollars out = profit) is worthless. I then gave an example using deliveries. Without the dollar conversion on a metric, it won't tell you weather it is worth spending resources to "get better."

Although that is a reasonable approach and will fit with some or even many company cultures, it is hardly the only useful approach.

 

[JaneB]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

What I said was that any metric not stated in dollars (ie; dollars in vs. dollars out = profit) is worthless.

I agree that where it is possible to translate metrics into $$ terms, this is an excellent idea. I don't think it's always possible in 100% of cases.

I then gave an example using deliveries. Without the dollar conversion on a metric, it won't tell you weather it is worth spending resources to "get better."

Hmm, maybe. I can easily see at least one other fact that would tell you whether it's worth it. Imagine that your customers are complaining about deliveries. It requires little genius to see that it's worth improving. OK, you can go to the effort of calculating X customers = $XX business per month/year/whatever, so if we lost them entirely, or say 50% of their business it would = -$x. But does one really need to do it in that particular case?

But I suspect we're quibbling or hairsplitting theoretical examples only. Consider a customer who had an objective of making a contribution to their community. Now, it was a commercial customer, but it wasn't simply a matter of giving money. They deliberately chose some non-$ oriented KPIs which they used to assess whether they were meeting that particular objective. Not only would it have been difficult to measure them in $ terms, but it would have been pointless. Value isn't always and solely about $$.

Your reference to 'all these folk with pretty charts' etc ? I have no idea what you're talking about and it seems completely irrelevant to the discussion at hand, unless you're using it as a way to denigrate people who don't share your opinion.

 

[DrM2u]

Re: Quality Objectives Ideas - Currently we have Scrap & rework, OTD, survey results,

And without the other stuff there is no heart and soul to a company and eventually a company that focuses only on the bottom line will also be dead.

What exactly do you mean by 'the other stuff' and by the 'heart and soul' of a company?

A company is a system not a living being and it has to be regarded as such, regardless of how cold and heartless it might sound. This system was created and exists to address the needs of its stakeholders. The needs and the stakeholders of a non-profit organization are different from those of a for-profit organization. As such, the company must identify its stakeholders and their needs, and the metrics have to reflect how well these needs are addressed. IT IS WRONG to assume or imply that the investors are the only stakeholders.

I firmly believe that all the metrics can be tied to the bottom line (not profit) of the company as they all have an impact on it. For the investors, the need is profit; take the profit away and the investors will drop the organization like a hot potato. For the employees, customers, suppliers, society, etc the needs are other than profit but they still tie to the bottom line. For example wages, training (result of turnover, new technology, etc), benefits, etc are important to the employees and yet can be tied to the bottom line. For the society sales, growth, postitive income translates into higher taxes, donations, etc; yet all these can be tied to the bottom line. So, as you can see, a profitable business is important to all stakeholders for the business to exist. Therefore 'all that matters is $$ and profit', like Jane put it.

If anyone cares to dispute that all metrics can be tied to the bottom line then please give examples of such metrics and why/how they cannot be tied to the bottom line. Also please provide examples of a for-profit non-profitable organization that lasted for a long time and met all stakeholders' needs.