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[Case study] Indicators and control KPIs

Which indicators for quality control?

«If you can not measure it, you can not improve it.»

Lord Kelvin        

The importance of indicators for quality control

Quality control is a process that aims to verify with tangible evidence that the quality of a product is in compliance with the requirements (regulatory, internal, customers). It also allows to measure the efficiency of my production organization: is it deteriorating, maintaining or improving? Quality control is based, by definition, on controls, tests or analysis. The main objective is to prevent defective products from reaching customers or consumers.

Then, to measure and improve its efficiency, the quality control department must have:

  1. A clear and defined performance objective,
  2. Means to measure current performance,
  3. A comparison between performance and the objective in order to define corrective actions..

To understand the need and necessity of having and monitoring indicators, the example of a car trip is very telling:

Imagine for a moment that you have to drive from Lille to Marseille with your family. Imagine yourself at the wheel and try to visualize a completely empty dashboard without any indication!

You will quickly ask yourself some pertinent questions about driving.

  • Do I have enough gas for the trip?
  • How do I respect speed limits?
  • Am I safe (tire pressure, braking, signals, etc.)?

There are many different indicators and not all of them will be appropriate. It is according to the organization of your structure that you will determine the indicators drive your control activity.

It is therefore essential to have monitoring indicators to retrieve reliable data in real time. These will allow you to build performance indicators (KPI) or efficiency indicators. These will help you measure your performance and improve and advance your control process.

How to find my performance indicators?

The method for choosing good performance indicators is actually quite simple:

What is the purpose of my quality control process? What is the output?

The output: verified products that meet expected specifications (technical, legal, regulatory and commercial)

Follow-up indicators: reliable data are needed!

To manage the activity, as we have seen, you need reliable data in real time.

These data are monitoring indicators, a photograph of the activity. They already provide the first answers regarding the management of controls and their organization. These indicators also serve as a basis for developing performance indicators.

Some examples of monitoring indicators:

Number of non-conformities per reference

Allows monitoring of references where the risk of releasing a non-conformity is statistically higher.

Number of non-conformities per supplier

Allows to monitor the most at-risk suppliers

Most sold references (number of batches)

Allows to evaluate the references for which the release of a non-conformity would have a significant impact (many customers affected, turnover impacted a little)

References that generate the most turnover for my structure

Allows you to evaluate the references for which the release of a non-conforming would have a direct impact on the company’s sales and turnover. (one or more customers affected, turnover highly impacted)

Cost of controls per product:

Allows to evaluate the most expensive references to control and to justify the costs

(More expensive analyses? More frequent periodicity? High risk? Customer specifications?)

Costs per analyses:

Allows you to evaluate the most expensive analyses and to compare external laboratories between them

Costs per laboratory: 

Allows you to track changes in spending with laboratories and relate it to the number of analyses performed.

Key Performance Indicators (KPIs)

Reliable data allows the calculation of performance indicators (KPI):

These are measurable values that allow you to evaluate an improvement or a degradation of your process with regard to the objectives to be reached.

Applied to quality control, KPIs translate the performance of your control process.

For a quality control department, being efficient is first and foremost the ability to detect non-conformities in a certain way. Detecting them quickly and as early as possible before the sale of a product. It is thus a question of controlling the materials which enter the company, those which are in the course of manufacture and those which will be proposed with the sale. But, as it is often the case, to do it with a limited budget and tight deadlines!

Let’s take an example:

For a given product and from one year to the next, let’s consider that you have the same finding:

You have controlled the same number of lots.

You have carried out the same number of control analyses.

You have 100% conformity.

You have no customer complaint.

Did you perform well from one year to the next? From a control point of view: yes, because no non-compliant batch was detected and therefore released.

But two performance levers can be implemented:

  •     Did you improve your release time? Has it deteriorated?
  •     Did you reduce the control load per batch? or did it increase?

It is clear that beyond the monitoring indicators, you can set performance or efficiency objectives.

Examples of KPIs

Sources of inspiration that we have encountered in industry:

  • Number of customer complaints: (related to product specifications)

You can of course categorize the complaints according to their link with food safety (problem of non-conforming total flora vs. problem of color), choose those that are linked to the control process.

  • Number of non-conformities : (analyses and/or batches) on raw materials and the number of non-conformities on finished products (analyses and/or batches):

If the first one increases and the second one decreases: for sure you improve your ability to detect and you reduce the number of complaints. This allows you to verify that your service works like a filter, it reduces and tends towards 0 the risk of selling a non-conforming product.

  • Percentage of sanitary non-conformities:

Percentage (Number of analyses with sanitary non-conformity / Total number of sanitary analyses carried out) allows to evaluate the evolution of the risk of selling a product with a sanitary problem. It allows to prevent the occurrence of the risk and to adapt the controls and their frequency.

  • Time of control:

Average time for the control of a batch, can be calculated also by type of product, by categories

  • Delay rate:

Percentage of batches released out of time; this shows your ability to meet the announced deadlines for planned controls.

  •     Analytical coverage rate:

Number of identical analyses available at different laboratories. If a subcontracted laboratory is no longer able to provide the analyses, you must have a reliable back-up laboratory.

  • Percentage of accredited subcontracted labs

Measures your level of assurance and reliability with respect to outsourced food safety testing.

  • Control costs:

Allows you to measure the cost of control necessary to verify compliance. It can be expressed per batch, per reference, per category, but also per Kg/Ton etc. The frequency of certain analyses gives the possibility to intervene on the costs. This is an indicator that will please your management controller!

  • Average cost of a control analysis:

Global analytical cost / number of analyses performed. Allows you to challenge laboratories on the price of analyses or to find other subcontractors.

  • Global analytical cost rate (% of turnover):

This ratio (control cost / turnover) allows to measure the impact of the control on the turnover. The evolution allows you to know if you control more or better. It gives the possibility, for each product, to also break down the costs for the calculation of margins.

  • Supplier costing ratio (% on material purchase cost):

This ratio (control cost/ raw material cost) allows you to measure the impact of the control on the raw materials necessary for the manufacture of compliant products. The evolution makes it possible to know if the quality of the suppliers is deteriorating or improving for example.

  • Supplier performance:

Raw material compliance rate (Number of compliant batches / total number of batches purchased) to be calculated by supplier on one or more purchased product references.

Whatever KPI you use, choose those for which you have the capacity to intervene; you will not improve the quality level of a supplier if no corrective action is imposed by the control department or the purchasing department!

Similarly, to be effective, the number of KPIs to be monitored must be limited. Your KPIs are relevant at a given moment, according to your objectives. If the problems are solved, if the objectives change, do not hesitate to change your KPIs.

In short, your KPIs must allow you to improve, and therefore generate actions within your department or your company.