Total Quality Management-Performance-Measures.ppt

performance measures in tqm

1. CHAPTER-7
PERFORMANCE
MEASURES

2. Definition of Performance
Performancereferstoworkof
anemployeeintermsof
productivityandintermsof
minimisingproblemsforthe
organisationbebeingtowork
ontime,bynotmissingdays,
andbyminimisingthenumber
ofwork-relatedaccidents.

3. Concept of Performance Measure
Performance measure isthe
formal,andsystematicprocessof
establishing performance
standardsand assessing of
employees’performanceinjobsin
relationtoestablishedstandards
andofcommunicating that
assessmenttoemployees.

4. Objectives of Performance
Measures
Baseline measures and reveal trends.
Identify improvement needs of processes and
individuals.
Indicate process gains and losses.
Compare goals with actual performance.
Provide information for individual and team
performance.
Provide information to make informal
decisions.
Determine overall performance of t he
organisation.

5. Types of Measurements
Human resource-Lost times,
absenteeism,turnover,productivity,
numberofaccidents,traininghours,
suggestionsimplemented,grievanceetc.
Customers:Numberofcomplaintsand
on-timedelivery,customersatisfaction
index,timetoresolvecomplaintsetc.
Production.Inventoryturns,amountof
scraps/rework,processyield,machine
downtime,actualperformancetogoal,
numberofreturns,costperunitetc.

6. Continues
Suppliers:Servicerating,SPCchart,quality
performance,billingaccuracy,averagelead
time,errors,JITtargetetc.
Marketing:Salesexpense,orderaccuracy,
promotionexpenditure,newcustomers,
gained/lostaccounts,numberofsuccessfulcalls
perweeketc.
Administration:Revenueperemployee,costof
poorquality,dueaccountsreceivables,vehicle
fleetdata,billingaccuracy,conditionofoffice
equipmentsetc.

7. Quality Criteria for Measures
1.Simple.
2.Few in number.
3.User friendly.
4.Customer relevance.
5.Improvement scope.
6.Cost.
7.Visible.
8.Timely or Actionable on time.

8. Continues
9. Aligned to organizational goals.
10. Results oriented.

9. Strategies for Performance
Measures
Strategicmeasurementsystemis
createdtoensureachievingcore
values,goals,mission,visionofthe
organizationandtoperformancegoals.
Itisaimedattrackingtrends,identify
problemareasandallocateresources
tooperations.

10. Strategic Elements
Quality: Aims at reducing percent of cost of poor
quality, corrective cycle time, non-conformities etc.
Cost :aims at increasing percent inventory
turnover, material shipped, output per employees
etc.
Flexibility:Aims at percent reduction in cycle time,
setup time, batch size etc.
Reliability: Aims at percent reduction in down time,
warranty costs, design change etc.
Innovation:Aims at percent reduction of new
product innovation time, management time spent,
and percent increase in new patents granted.

11. Operational Process of
Performance Measures
Development of strategic measurement
system for the organisation.
Development of measures for functional
areas.
Determine the process or processes that are
critical to provide input for the strategic
system.
Determine the critical matrics/measures for
the process/processes.
Assign responsibility for the collection,
analysis, and dissemination of the data.
Develop improvement procedures.

12. Performance Presentation
Techniques
Time series Graph
Control Chart
Capacity Index( is the ratio of the tolerance
to the capability).
Taguchi’s Loss Function.
Cost of quality
Malcolm Baldrigenational Quality Award

13. QUALITY COSTS
What is Quality Cost?
Qualitycostsarethecoststhat
areassociatedwiththenon-
achievementofproductorservice
quality.

14. QUALITY COSTS CATAGORIES
Preventive costs
Appraisal costs
Internal failure costs
-Product design failure cost.
-Purchase failure costs.
External failure costs.
-Liability
-Penalties
-Warranties claims.
-Goodwill loss.

15. Quality Data Collection and
Reporting
A.Collection System Design
-Itrequiresthecloseinteractionofthequality
andaccountingdepartments.
-Awellcoordinatedsystemofcross
departmentallinestohavecostdataeasily.
-Qualitydatashouldbecollectedbyproduct
lines,projects,departments,operationsand
workcenters.
-Comptrollerofficemustbedirectlyinvolved
inthedesignofthequalitycostcollection
system.

16. Continues
B. Quality Cost Bases.
-Labour
-Production
-Sales
-Units
C. Quality Cost Report
D. Analysis: Trend and Pareto analysis.

17. QUALITY OPTIMIZING COSTS :
How to determine.
Technique-1:Makecomparisonwith
otherorganisation.Itisdonewithnet
sales.
Technique-2:Makefailurecost
Zero.
Technique -3:Analysethe
relationshipamong thecosts
categories.

18. Quality Costs Improvement
Strategy
1.Constitute Project Team to improve quality
through problem solving.
2.Invest in the right prevention activities..
3.Reduce appraisal costs in appropriate
situation with sound method.
4.Continuously evaluate and redirect the
prevention effort to gain further quality
improvement.

19. Quality Cost Program
Implementation
Establish the benefit of the program.
Get approval of the top management.
Train and educate personnel on quality
cost programs.
Trial use the implementation program
in one place or unit.
Fit the accounting procedures with the
program.
Establish the system to overall
organisation.

20. MALCOLM BALDRIGE NATIONAL
QUALITY AWARD (MBNQA)
CATAGORIES OF AWARD
1. Manufacturing.
2. Service.
3. Small Business.
4. Health Care.
5. Education.
Three awards are given to each category.

21. MBNQA Continues
Criteria for Performance Excellence
Leadership.
Strategic Planning .
Customer and Market Focus.
Information and analysis.
Human Resource Focus.
Process Management
Business Results.

22. Key Characteristics of the Criteria
of MBNQA
1.The criteria are directed toward
results.
2.The criteria are non-prescriptive and
adaptable .
3.The criteria are supportive to a
system approach to maintaining
organization –wide goal alignment.

23. THANK YOU ALL.