How to Calculate Quality Indicators
A common theme in most manufacturing organizations is the implementation of some sort of quality management system. The most popular quality management systems (QMSs) are Six Sigma, LEAN, and ISO 9000. All of these systems aim to provide ways for companies to measure and improve organizational processes. At the heart of measuring organizational processes are quality indicators. These are key performance indicators (KPIs) the company uses to measure and set improvement goals to. Calculating quality indicators is easier than it may seem.
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Instructions
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Identify the quality indicators for your organization. Remember, these are key performance indicators that management uses to help monitor company operations. Most organizations have at least three quality indicators that they report on a quarterly basis.
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Search in press releases, the latest annual report or internal reporting documentation. Common KPIs are net income margin (net income divided by sales) or product per hour for the labor associated with the sale. Most quality indicators are a function of either time or money; that is, the basis for comparison is the amount of time it takes to complete a task or the amount of money a task costs or brings in. Either way, as you search for the indicator you should also find the way in which the indicator is measured.
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Calculate the quality indicator. Use a calculator or spreadsheet to calculate the ratio. The most challenging aspect of this task is finding the owner of the data. Once you find the person who reports or owns the data, substitute this into the calculation. For instance to find net income margin you need net income and sales. Both of these can be found on the income statement. However, if you need the number of widgets per hour, you need to find the person who is over widget production. Ask them if they create a monthly report and if you can be added to the distribution list.
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