Archive for the ‘Performance measures’ Category

Having gone to all that trouble to set up your Approved S&S system I know a lot of you then struggle trying to agree what course of action you should take to bring them into line should they fail to perform. ¬†After all, you don’t really want the hassle of sourcing an alternative – assuming there is one of course!

Understandably, you are not in a position to storm in and lay the law down for a company that you have no jurisdiction over. ¬†You wouldn’t like it if a customer did it to you I’m sure. ¬†However, this is where you start to work the magic of a 9001 QMS.

Are the basics in place?

By this I mean the list with suitable criteria for inclusion; a clear indication of who you will monitor for performance; what you will check; what metrics you will set and how you will control this part of the 9001 QMS. ¬†If you need to refresh these aspects then I suggest you click this link and go look at the training videos “9001 – The Collection”. ¬†A sample is included below if you are new to them:


Also remember that you need to be operating a robust Non-Conformance System so you have the right facts on which to base your case.

How to get them to read the performance metrics

First off make sure you are producing regular performance data which usually means once a month, although this can be flexed either way dependent on throughput. ¬†In addition to sending out an individual report of OTD,¬†Quality and say Concessions why not appeal to the supplier’s ego and list them in a league table against the other suppliers.

Combine all three ratings into one index and place the suppliers from top to bottom, but shade out all names bar the one you are compiling the report for as that way you don’t create any undo hassle between companies. ¬†I know a lot of suppliers who don’t react when they see just their own performance report, but change totally when they see how they compare with their rivals.

Choose your Weapons

Now to the sharp end.  Here are five courses of action I have used or seen used in the past so adapt them for your own business:

  • If you see a poor performance over three consecutive reports against your required targets then raise a CAR on them as clearly their system (or the people running it more like) aren’t responding to your reports which are effectively ‘complaints’. ¬†Simply follow the same process as you would for internal CARs.
  • If stock happens to be tested as part of your subsequent order processing but fails, even though the supplier certifies on a similar test that it has passed, then get agreement for a third-party to retest it as part of your Goods Inwards procedure. ¬†Do this for an agreed period of time or number of receipts before putting them into stock and charge the supplier for the costs incurred. I accept that this smacks of ‘manufacturing’ and ‘engineering’, but try an adapt it for your business.
  • Instead of dealing with random deliveries and quality at Goods Inwards insist on a pre-delivery inspection at their works by one of your staff or a nominated agent on repeated offenders so that you can filter out the rejections before they arrive. ¬† Clearly this impacts on resources and cost, but if it puts the performance back on track? Why not get them to bear some of the costs.
  • On the basis that you know others that are buying from this supplier, why not form a collective to tackle the issues on the basis that a group carries more weight than an individual. ¬†You have to approach this one carefully dependent on your relationship with the other companies but it is worth considering.
  • Finally, in this age of social media, have you checked if the supplier is on Twitter or Facebook? Forward thinking companies do this so they can hear what the customer has to say. ¬†I think you might have something to add there don’t you? ¬†Do not underestimate the power of social proof – or in this instance the lack of it. ¬†Having customers give negative comments on these platforms is not good, so is likely to solicit a reaction. ¬†Be careful though in what and how you say things, we don’t want lawyers involved now do we!

One parting shot

Ok I know some people will say that all this is unfeasible when the issue is with a sole supplier and you can’t do without them etc etc. ¬†I appreciate you have to be careful on the commercial front but, surely, isn’t it even more imperative that you find a working solution in that case? ¬†Views on that one welcomed in the comments box below.

Remember the basics of 9001 like this are covered in my free training videos. The full range of service from me are on my website.

Now this is a crucial part of your QMS mainly because it is often the area that auditors start with in order to gauge how well the system is being maintained.  If you think about you can understand why as it defines several aspects all in one document.

How is the system fairing; are things getting better or worse; how committed are the senior management; do you table good data for review, have you logged issues and ideas in order to move the system forward.  There is so much it can do for your system it pays to get it right.

Non ConformancesFirst off make sure the right people are invited and more importantly attend. ¬†If the top person is away then set a date when he or she is available. ¬†Issue the agenda in line with what is listed in 9001 but add to it so it reflects what is happening to your business. ¬†Don’t be afraid if the number of items get into double figures as this is your one chance to get everything discussed. ¬†Having said that you are not constrained to holding just one a year , so if two or even three are needed because of the importance and or workload then go for it. ¬†Certainly as a company moves towards the stage 2 audit it makes sense to have several on the books before the auditors come in.

Now comes the need to prepare all the data Рand that can be quite daunting and time-consuming for people running a system for the first time.  This is where you need to hone your spreadsheet skills, assuming that you can extract the data in the first place.  Many companies are tethered to mainframes and struggle to access the all important records but you need to find a way. In addition try to get a measure of throughput so you can quote percentages rather then absolute figures.

Remember it is what it says – a REVIEW – and a balanced one at that so praise the successes and sort the failures. Make sure you graph up your data to show trends over a relevant period of time, ideally the current calendar or financial year. ¬†Don’t just focus on what has happened since the last meeting as you might miss something important. A picture is far better than loads of tabulated records or, heaven forbid, a random verbal report!

Percentage NCPDon’t forget to use the system in that any areas of the QMS that are failing should a CAR (Corrective Action Report) issued to control whatever action you have decided to take. ¬†Any ideas for improvement should go on a PAR (Preventive Action Report). Those in aerospace will also have the joy of working though the PEAR metrics in addition to the basic quality objectives – all good fun. ¬†As for the minutes, make sure they are clear and concise with clear ownership of action points to a person and an agreed date of completion.

Allow yourself plenty of time for the meeting to ensure a full and constructive discussion. ¬†By reviewing trends rather than specific records you will often find that this triggers some really good creative discussion as people step back and have a good look at the system as a whole. Finally, don’t rush things at the end because you are running out of time. Be brave and suggest an adjournment and organise a second session – it’s that important.

If you are struggling for guidance on 9001 in general then don’t forget the free videos here.

Well who would have thought it. That recent report by Sir Philip Greene has condemned Government procurement practices as ‘shocking’. He then goes on to quote examples that are just too bizarre for words. Yes I know this is nothing new but uncontrolled and inefficient processes, coupled with a lack of understanding and ownership and performance measures, just appear to be rife.

Wouldn’t you just love to get amongst it all and sort it all out. The framework is there with ISO and businesses have to comply so why should politicians be exempt. Now today I read that whilst Sir Philip raised concern over the current practice of payment within five days to suppliers, to the point of negotiating later payments, the latest Enterprise Czar Lord Young wanted prompt payment to SME to be retained.

You could¬†have a field day. ¬† I have to admit that can’t quite see frustrated Quality professionals marching on Downing Street, but come on where would you start?

Customer satisfaction. . . . . how are we meant to measure that then for heaven’s sake. ¬†Not the dreaded questionnaires, oh telephone surveys well that’ll work. ¬†Why don’t we send our sales people out to talk to them whilst we’re at it.

This is¬†one of the major stumbling blocks for many companies when they start¬†¬†to get¬†their heads round paragraph 8 in the ISO 9001 standard. ¬†However, there it is plus your data on deliveries and reject levels isn’t good enough on its own – it needs to be data that your customer has generated. ¬†Well I’ve got some great news for you – the goal posts are on the move!

I just read Dr Osman Khan’ blog here and it discusses the need not just to get the order there on time at the right price and quality but to go one better and delight the customer. ¬†Would that create ‘delight’ – well think how you felt when you last bought something then received more than you expected – more than would just keep you satisfied. ¬†Suggests it would work doesn’t it and certainly in current times when any competitive edge is worth recording especially if this generates more customer loyalty for your efforts.

Customer satisfaction is the base line, a given, so you need to go beyond it. So when you next sit down with your team don’t just settle for ‘satisfaction’ raise the bar and aim for ‘delight’. ¬†Now there’s a challenge.

When putting together a quality system it goes without saying that you will need to build in numerous measures relating to various processes around the business. Now most of these will often be new to a site so you need to carefully explain what is required and why. However you enter into this phase almost taking for granted that the basic measures of a companies finances, throughputs and performance will already exist so you can just build on them – not so it appears.

It always takes you by suprise when these basics have been overlooked so you end up spending time foraging for ways to get them defined as well. A considerable amount of financial information often exists but is invariably secreted away in a financial package that only a few people have access to, whilst planning and throughput information may be hampered by being within a very manual system so making it very labour intensive to extract. At worst, this can even prevent a regular review of performance by the management team.

You therefore need to be ready to establish early on just what exists before you try to add the ISO elements. This is simply achieved by asking such questions as:

How many order lines get booked in off purchase orders, processed through the factory and delivered to customers each month? This is crucial for the non-conformance part of the standard where you ideally need to quote the occurence of problems as a percentage of throughput.

What percentage of order lines do not meet planned margin? Any salesman I have ever known wants to be knowing that immediately so a dynamic report as each order line is closed is better than having to wait for the month end.

How many days does it take to issue a quotation? This is a good potential quality objective that links back to customer satisfaction but it is suprising how many companies are happy to expend time and energy creating elaborate quotes then forget to measure how effective their process really is.

There are many more so what would be your particular favorites?

ps: The one concerning margins can be converted in to a really cool quality objective with a killer customer focus. If you need help with your quality system then get in touch via the web site.