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TOPIC 7
MEASURING QUALITY - Coggle Diagram
TOPIC 7
MEASURING QUALITY
Measurement Terms
- Internal measurement - Operational and financial performance, human resource, quality, productivity other organizational effectiveness
2.External measurement - market performance, customer perception
Measurement For Quality Control
- Measurement
- The act of quantifying the performance dimensions of products, services, processes and other business activities’
- Measures & Indicator
- Numerical results obtained from measurement
- Indicator
- Often use for not a direct or exclusive measurement
Good measurement
- Using SMART
- Easy cost effective to obtain
- Clear unambiguous
- Provide actionable information
- Clearly relate to customers
- Provide a scorecard of business performance
- Must be available communicated to workers managers when they need them
Common Quality Measurement
- Focus on outcomes of manufacturing & service processes
Terms & concepts
- Unit of work
- Non-conformance : defect and error associates with unit of work
- Non-confirming unit of work : one or more defects/errors
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Cost Of Quality
- Cost of avoiding poor quality, or incurred as a result of poor quality
- translate defects or errors into "language management"
- Provides basis for identifying improvement opportunities and success of improvement programs
Quality Cost Categories
- Prevention Cost
Investments made to keep non-conforming products from occurring and reaching the cust
- Q planning cost
- Process control cost
- IS cost
- Training and general mngt cost
- Appraisal Cost
Efforts to ensure conformance to requirement, generally through measurement and analysis of data to detect non-conformance:
- Test & inspection cost
- Instruments maintenance cost
- Process measurement & control cost
- Internal Failure Cost
Result of unsatisfactory quality found bfr the delivery of a product to cust
- Scrap & rework cost
- Correction action cost
- Downgrading cost
- Process Failure cost
- External Failure Cost
Occur aftr poor-Q product reach the cust specifically
- Cust complaints & return cost
- Product recall cost & warranty claim
- Product liability cost
Quality Cost in Service Organisation
- In manufacturing, Q costs are primarily product oriented while in services, quality cost generally labour dependent, accounting up to 75% of total cost
- External Failure Cost - warranty and field support are less relevant to service comparing to manufacturing
- External Failure Cost - cust service & complaint handling staff and lost customers are more critical
- Internal Failure Cost - cannot be an evident in service. little opportunity to correct the error before it reaches the cust
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Scope of Performance Measurement
Purpose
- Provide direction for continuous improvement
- Provide perspective of the past, present and future
- Allow performance comparison to benchmarks
- Facilitates understanding of cause & effect relationship
Designing Effective Performance Measurement
- Selecting performance measures
- align measurement system to vision& strategy, and select meaningful measurements
- Linking measures to strategies
- driven by internal & external factors
-align w strategies& action plans : setting targets
- Aligning strategies & process-level measurements
- align down to the team & indv levels
- Auditing measurement system
- periodic audit of an org's measurement system
- hinder wastage, reward correct beaviour
Balance Scorecard
- tool to measure quality performance using financial & non-financial measures
- Traditional financial & accounting + cust & market data, HR, supplier performance
- Purpose - translate strategy into measures that communicate vision to the org
BSC Perspectives
- Financial Perspective
- measures results that the business provides to its shareholders (eg; profitability, revenue growth, return on investment)
- Internal Perspective
- focuses on the performance of key internal processes that drive the business (eg; quality level, productivity, cycle time, and cost)
- Customer Perspective
- focuses on cust needs & satisfaction, market share (eg; service level, service ratings, repeat business)
- Innovation & Learning Perspective
- direct to the basis of future success - org's people & infrastructure (eg; intellectual assets, employee satisfactory, market innovation & skills development)
BSC Characteristics
- good balance scorecards contains both leading and lagging measures and indicators.
- lagging measures - outcomes, tell what has happened
- leading measures - performance drivers, predict what will happen