In today’s competitive manufacturing landscape, high-quality products are critical for an organization’s success. Customers expect perfect products, yet manufacturers must focus on reducing costs, reducing waste, and improving their processes.
How do you know whether your quality is indeed high?
Good quality can be measured by the appropriate Key Performance Indicators (KPIs).
KPIs provide valuable information on the quality of your performance. They signal to manufacturers when to track down a problem and continuously improve.
In this post, we will discuss the top 10 quality KPIs that every manufacturer should track. If you are responsible for managing manufacturing, quality, or operations, these KPIs will help you on the quality journey.
First Pass Yield (FPY)
First Pass Yield shows you the overall percentage of products that pass all quality checks on the first shot – no rework required. FPY gauges how well your process worked the first time.
A higher FPY means less rework and a faster quality implementation. To improve first pass yield, train all operators thoroughly and keep the machines in good working condition.
Rejection Rate – By Product or Line
The Rejection Rate measures how many items you rejected because of defects. You can measure it by product type or production line.
By observing this KPI, you will quickly discover which processes our products are more likely to have quality problems. You can follow that with improvement efforts in the area needing improvement. Watch the rejection rates regularly and meet with your teams to resolve the issues.
Scrap Rate
Scrap Rate measures the amount of material or products that are considered to be non-repairable and thus discarded.
Scrap is a waste of money and resources, and can be avoided. Improvements to reduce scrap can be achieved through the use of better raw materials, properly maintained machines, and trained people.
For example, a plastics manufacturer improved the quality of their supplier’s material and machine settings, resulting in a 15% reduction in scrap.
Rework Rate
Rework Rate measures the amount of product affected by additional work required to meet quality standards.
Rework is a waste of time and adds cost and delays. A more thorough investigation into the root cause of the defects will help to reduce them, as will improvements to process controls and automation of inspection, which limits the chances of human errors.
Non-Conformances in Quality Inspection
Non-conformances are instances of product or process failure during quality inspections.
If retained, this measure can help identify problems during production earlier. Furthermore, it is actionable to categorize non-conformances by category and severity before taking action. Sharing data about non-conformances with your suppliers and developing their non-conformance program is also valuable and can help improve the incoming quality of materials.
Cost of Poor Quality (CoPQ)
Cost of Poor Quality accounts for every cost associated with a defect.
Factors include scrap, rework, warranty claims, and returns.
If you’re taking the time to understand your CoPQ, you are aware of the impact poor quality has on your business.
One manufacturer of specialized machinery, for example, understood that CoPQ was equal to 12% of revenue. After making improvements, they reduced their CoPQ by an additional 5% from 12%, giving them more profits.
PPM and DPMO (Parts and Defects Per Million Opportunities)
PPM is defined as the number of defective parts per million units produced, while DPMO is defined as the number of defects per million opportunities for the process to create a defect
PPM and DPMO are metrics as specific measurements of quality, and they provide insight as to how often defects occur, namely during a mass production process or during a highly technical process, but they can be used to guide decisions regarding consistency in a process.
Customer Returns
Customer Returns measures the total number of products customers sent back as a result of quality.
Returns of products can harm an organization’s reputation and add costs directly to the business. Reduce the number of returns by accurately defining the reasons for returns, manipulating quality assurance, and protecting product quality while in the shipping process.
Incoming Inspection Acceptance Rate
The Incoming Inspection Acceptance Rate KPI indicates the percentage of raw materials or components that passed inspection upon receipt.
High rates are important to ensure smooth manufacturing operations, while reporting results back to your suppliers can help support better quality. Rating your vendors can also differentiate which of their suppliers are that did met expectations.
Vendor Quality Rating
Vendor Quality Rating, or VQR, is a score that indicates if a supplier’s delivery meets your quality criteria over the duration of time. When you have a good quality supplier, you are less likely to run into quality issues later.
Conducting audits, providing feedback, and making agreements can help enhance vendor performance over time.
Why These KPIs Are Important
By monitoring these KPIs, a manufacturer can:
- Get early warning signs of issues.
- Eliminate waste and save money.
- Improve throughput and quality of products.
- Satisfy customers
- Build solid supplier relationships.
However, monitoring these KPIs with a manual process is difficult, and this is where ManufApp can assist you.
Take Charge of Quality with ManufApp
ManufApp’s ERP platform uses technology to allow you to monitor your quality KPI’s in real time. Using dashboards and reporting features, you can receive timely and usable information to detect problems early and take corrective action before they become more serious.
Features include:
- Custom dashboards to view KPI’s quickly & easily
- Alerts to notify you of quality issues automatically
- Supplier management and scorecards
- Mobile access to monitor quality on the go.
Ready to enhance your manufacturing quality?
Book a free demo with ManufApp to see how tracking quality KPIs can streamline your operations, reduce costs, and improve your customer satisfaction.