10 KPIs to take into account to evaluate and improve quality in your industrial company

Do you want to know which are the 10 most used quality KPIs in the manufacturing industry? Read on to find out which indicators most companies use to monitor and continuously improve quality inside and outside their production plants.

To constantly assess and improve quality in their production plants, industrial companies rely on key performance indicators (KPIs) that allow them to identify their weak points and implement improvement actions where they are really needed.

Although we are aware that these KPIs vary according to the sector, processes, challenges and specific needs of each organization, for the purpose of this article, we have made a selection of some of the most popular indicators in the manufacturing industry.

The most widely used quality KPIs in the manufacturing industry

1. First Time Quality (FTQ)

This metric indicates the number of units accepted at the first time in a manufacturing process versus the total number of units produced.

FTQ is a KPI that companies monitor in order to achieve “zero defect” manufacturing. Although this is a rather ambitious goal, achieving first-time quality translates into a very significant reduction in costs and an improvement in the companies’ reputation.

2. Rejection rate

The rejection rate measures the proportion of nonconforming or defective units in relation to the total number of units produced.

A high rejection rate can indicate problems in manufacturing processes for multiple reasons. By monitoring and reducing this KPI, we can improve process efficiency and minimize costs associated with rework, order delivery delays, customer complaints, etc.

3. Scrap rate

The scrap rate is a metric that allows us to know the volume of materials that have been discarded during the manufacturing process of a product. It is calculated by taking into account the units or non-recoverable rejected material and the total number of good units produced.

Scrap control should be one of the first steps to avoid cost overruns in the use of raw materials and energy resources, and to improve production quality.

4. Rework rate

The rework rate is a metric that indicates the frequency with which products must be reworked or corrected due to defects or quality problems. It is calculated by dividing the number of products requiring rework by the total number of products manufactured.

Rework generates additional costs in terms of labor, materials and time. In addition, they can delay the delivery of products to customers, which has a very negative impact on their satisfaction rate.

5. Quality index in the reception of raw material

Indicator that is used to evaluate the quality of raw materials received by a company. It is calculated by comparing the quantity of raw materials that are in good condition and meet established quality standards with the total raw materials received.

The calculation of the raw material reception rate generally involves inspection and evaluation of raw materials at the time of receipt. Different aspects are examined: appearance, integrity, specific characteristics that must be met according to the quality requirements established by the company, etc.

It is a very important indicator to ensure the quality of the product before it starts to be manufactured and to detect problems related to the suppliers or the storage or transport of the goods.

Proceso de inspección en la recepción de materias primas

6. Customer complaint rate

KPI calculated by dividing the number of complaints received by the company in a given period by the total number of customers or units sold in the same period.

A high complaint rate indicates that customers are experiencing problems or deficiencies in products or services, something that can damage the company’s reputation and undoubtedly leads to additional costs and the loss of customers and competitive advantage.

7. Customer satisfaction index

This KPI evaluates the degree of customer satisfaction with the products and services they receive from the company and is obtained through surveys, interviews or other data collection methods.

A high satisfaction index indicates that we are meeting or exceeding customer expectations, so our products are of high quality, meet requirements and provide value to the end consumer.

Conversely, a low satisfaction index may indicate problems in product quality and customer service or care, helping us to identify areas where we need to drive continuous improvement plans.

8. Non-quality costs

The vast majority of quality KPIs can be transformed into costs, resulting in one of the most important indicators for companies: the costs of “non-quality”.

This KPI can be calculated in many ways, for example by adding the production and material cost of rejected units or scrap and/or the costs resulting from customer complaints or penalties.

Some companies even take into account the cost of lost sales opportunity, i.e. everything that they have not been able to revenue or sell because of product quality issues.

9. Non-conformities

As explained in this article, a nonconformity is an unexpected event that arises during the manufacturing process and negatively affects the final quality of the product. The timely detection of a nonconformity should be considered as an opportunity for improvement.

Thanks to MapexQM, it is possible to identify them, speed up the implementation of corrective actions to prevent their occurrence in the future and reliably track related KPIs such as references and defects that are generating a higher number of nonconformities.

10. Audits

For most industrial companies, performing audits is a mechanism that helps them ensure production quality, identify problems in production processes, comply with industry standards and regulations, and enhance customer relationships.

With Mapex, you can keep track, in real time and through intuitive dashboards, of KPIs related to audits such as, for example, the completion and compliance rates of these controls and/or the most common NOK inspection points.

If your goal is to manufacture with quality, do not hesitate to contact our team. They will explain how our MES platform can help you monitor in real time indicators such as FTQ or scrap rate and centralize in a single solution the management of all your quality plans, audits and non-conformities, among others.

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