Quality Metrics: A Report Card for Performance – TIP Technologies

Real-time quality metrics provide much-needed visibility into quality issues and help prevent future adverse occurrences. These measurements are an effective way of introducing transparency and accountability into an organization. With consistent performance metrics in place, executives can get the insight needed to make educated decisions and gain better control over the manufacturing process.

Establishing some key performance indicators (KPIs) to ensure your quality is on track is considered best practice. KPIs are a reliable way to track manufacturing performance and identify areas for improvement.

Establishing standards for the following can help you achieve your quality goals. Let’s examine a few examples of quality metrics to understand how they can deliver intelligence to support your quality assurance efforts:

First Pass Yield (FPY)
First Pass Yield (FPY) measures the usable parts in a process. To calculate, divide the number of acceptable units without rework leaving a process, by the number of units that were part of that process. First pass yield is a good indicator of waste elimination – a key priority for continuous improvement.

Mean Time Between Failure (MTBF)
Mean time Between Failure (MTBF) is defined as the average time between mechanical equipment failures. This metric serves as a gauge for the reliability of a particular component and provides actionable intelligence that will help prevent problems from reoccurring. The reliability of the component, as well as its availability to perform when needed are considered with this quality metric.

Work-in-Process (WIP)
Work-in-Process (WIP) refers to components or goods that are not ready for completion. The items are either still waiting to be built, or they are being held for further processing. This quality metric accounts for the goods that are still on the factory floor. WIP costs including raw materials, labor and overhead are accounted for as inventory assets. Companies work to minimize work-in-process to keep inventory lean.

Parts Per Million Opportunities (PPMO)
Parts Per Million Opportunities (PPMO) is the number of units that are defective per one million produced. This measurement is helpful in studying the effectiveness of a supplier. The PPMO quality metric identifies defects and nonconformances within the supply chain and brings to light the relative cost of working with each supplier.

On-Time Order Rate
The On-Time Order rate tracks the percentage of goods delivered on-time as promised, complete with no errors. This quality metric reflects response rate and has a significant impact on customer satisfaction.

Scrap Rate
Scrap rate very simply measures the amount of materials (“the scrap”) that do not make it into the final product. This quality metric represents manufacturing efficiency and is a good indicator of the quality control process in place at an organization.

Rework Rate
Rework encompasses the entire effort to correct a defective, failed, or nonconforming item during or after an inspection. Disassembly, repair or replacement of an item are accounted for in the Rework Rate calculation. Rework has a significant impact on cost and schedule and should be monitored closely to improve performance.

Supplier Trending
Supplier trending allows companies to proactively monitor suppliers based on performance tendencies such as delivery, receiving, purchasing, nonconformance corrective action and DPMO. This gives companies the ability to manage the quality life cycle of their suppliers and sub-tier suppliers and watch for trends that could impact their bottom line.

Customer Satisfaction Rate
Customer satisfaction tracks the percentage of goods delivered against customer complaints and returns. This quality metric is another indicator of reliability and can be used to help identify and correct recurring problems that are visible to your customer.

An effective quality management solution allows companies to collect data in real-time to track against a defined set of metrics. This data can then be used to identify trends and improve operational performance. All metrics can be managed and archived within the system, resulting in a comprehensive record of performance.

To learn how you can manage these, and other quality-related metrics to improve operations, contact TIP Technologies at (262) 544-1211 or visit our website to request a demo of our TIPQA Quality Management Solution.