Not to distract from the other good comments mentioned here, let me hit another perspective.
Why not align your objectives to also answer 8.4 and 8.2.3 as well as 5.4?
8.4 requires that you determine, collect, and analyze data that helps you determine the health of your quality management system and how to improve it. It further tells you that there are four topics that this analysis needs to include. They are customer satisfaction, product quality, process performance, and supplier performance.
Why not use these as the topics for your quality objectives? Wasn't 8.4 likely intended to be at least a hint about 5.4?
You don't need to limit the objectives to four. You can, if appropriate, have more than one for any of the four topics. For the moment though, let's suppose you are going to use four objectives.
First, following 8.4, would be a measure of customer satisfaction. A common way us to use a survey, but other methods could be appropriate too. For example "Customer satisfaction of 95% or higher by survey".
Second would be product quality. You might measure customer returns, rework, the % of product that makes it through final inspection on the first pass (first pass yield), or any of several other metrics.
Third, process performance, is somewhat of a repeat of 8.2.3 about process performance. A very effective overall measure of process performance is on-time delivery (OTD). If all your processes are working well, OTD will be high. Measuring OTD will not tell you where the problem is, but it will tell you that something needs to be investigated.
Fourth, supplier performance, could be measured by supplier rejects, supplier OTD, or both. You are fulfilling 8.4d if you track individual supplier performance, but an overall OTD score makes a great quality objective.
Lastly, to meet 8.2.3, process performance, align your objectives to your processes. For example, the objective for customer service (or whatever you call it, sales, quote, etc) could be customer satisfaction.
For purchasing, supplier performance would be a good quality objective.
For planning, OTD would be a good quality objective if planning is mostly focused on scheduling. If product quality is also part of planning, then the objective for product quality could be used (or both could be used).
For engineering, product quality would be the likely best match.
And so on.
When you have aligned the objectives in this manner, they become KPI (key performance indicators aka key process indicators).
If you start with only four objectives/KPI, you should consider adding some as you become more comfortable with the concept. Keep in mind that they should be useful and easy to gather data for.
One last topic on the concept is in the choice of additional objectives/KPI which was a big topic in business school. That is to consider objectives/KPI as a collection of models. The adage is that no models are perfect but all are useful. A related adage is that perfect information six months after you need it is useless, but timely imperfect knowledge, that you understand the limitations of, is priceless.
Look for potential objectives that are easy to gather (timely) that are useful, and you should end up with extremely helpful information to help you guide the company.
Why not align your objectives to also answer 8.4 and 8.2.3 as well as 5.4?
8.4 requires that you determine, collect, and analyze data that helps you determine the health of your quality management system and how to improve it. It further tells you that there are four topics that this analysis needs to include. They are customer satisfaction, product quality, process performance, and supplier performance.
Why not use these as the topics for your quality objectives? Wasn't 8.4 likely intended to be at least a hint about 5.4?
You don't need to limit the objectives to four. You can, if appropriate, have more than one for any of the four topics. For the moment though, let's suppose you are going to use four objectives.
First, following 8.4, would be a measure of customer satisfaction. A common way us to use a survey, but other methods could be appropriate too. For example "Customer satisfaction of 95% or higher by survey".
Second would be product quality. You might measure customer returns, rework, the % of product that makes it through final inspection on the first pass (first pass yield), or any of several other metrics.
Third, process performance, is somewhat of a repeat of 8.2.3 about process performance. A very effective overall measure of process performance is on-time delivery (OTD). If all your processes are working well, OTD will be high. Measuring OTD will not tell you where the problem is, but it will tell you that something needs to be investigated.
Fourth, supplier performance, could be measured by supplier rejects, supplier OTD, or both. You are fulfilling 8.4d if you track individual supplier performance, but an overall OTD score makes a great quality objective.
Lastly, to meet 8.2.3, process performance, align your objectives to your processes. For example, the objective for customer service (or whatever you call it, sales, quote, etc) could be customer satisfaction.
For purchasing, supplier performance would be a good quality objective.
For planning, OTD would be a good quality objective if planning is mostly focused on scheduling. If product quality is also part of planning, then the objective for product quality could be used (or both could be used).
For engineering, product quality would be the likely best match.
And so on.
When you have aligned the objectives in this manner, they become KPI (key performance indicators aka key process indicators).
If you start with only four objectives/KPI, you should consider adding some as you become more comfortable with the concept. Keep in mind that they should be useful and easy to gather data for.
One last topic on the concept is in the choice of additional objectives/KPI which was a big topic in business school. That is to consider objectives/KPI as a collection of models. The adage is that no models are perfect but all are useful. A related adage is that perfect information six months after you need it is useless, but timely imperfect knowledge, that you understand the limitations of, is priceless.
Look for potential objectives that are easy to gather (timely) that are useful, and you should end up with extremely helpful information to help you guide the company.
