To achieve ISO 9001 Quality Assurance the standard requires a evaluation of the Quality Management System (QMS). It does so without referring to the term Key Performance Indicator (KPI), let’s take a look at how KPIs impact your QMS.
Throughout this standard there are requirements for reporting on the performance of the Quality Management System (QMS), determining competence that affects the performance of the QMS and evaluating the performance and effectiveness of the QMS. This is most prevalent in Clause 9 on Performance Evaluation. The requirements in this clause underscore the importance of monitoring, measuring, analysing and evaluating the QMS, including usage of internal audit and management reviews for this purpose.
A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively an organisation is achieving key business objectives.
ISO 9001:2015 requires your organisation to identify what systems and processes are required to monitor and measure the performance and effectiveness of the QMS, to determine the how and when to this should be done, and finally to both analyse and evaluate the results.
The term Key Performance Indicator refers to the measurements you have chosen to employ.
Fundamental to deciding on KPIs is an understanding of what needs to be measured in order to ensure optimal performance and effectiveness.
To do this your organisation needs to know the most important elements of its QMS processes e.g. a high production environment will need to measure delivery time whereas an haute couture fashion designer will need to measure quality of cloth, cut and tailoring.
First Pass Yield, Reject Ratio and Downtime are all standard business KPIs, but rather than go into a series of jargon filled tables, why don’t we just lay it out bare in plain English.
KPI or Performance Evaluation basics …
- How good was our organisation on delivery?
- How satisfied were our clients?
- How well did our QMS perform?
- How well did risk management hold up?
- Did we make progress with our quality objectives?
- Did we implement corrective actions or make improvements to our QMS?
- Are we evidencing continual improvement?
In order to be running effectively and at peak performance levels, your organisation needs to determine what needs to be monitored and measured, which in turn will require continual audit, review and corrective action to be taken when and where required.
Performance evaluation is literally as simple as that. Simply put it’s an evaluation of resources. An implementation of quality policies that will act as a catchall for everything.
It doesn’t really matter what terminology you use – KPI, Performance Evaluation etc. What is important is defining which measurements will guarantee a successful QMS. Your first cut may not ultimately be your last, and after a given period of time you might decide that you need to re-evaluate your measurement yardstick.
Ultimately, it is up to the leadership, senior management and key personnel to decide what best meets the needs and requirements of your organisation. Using this key data to control and improve the processes within your QMS is the vital element to getting maximum ROI.
For more information on performance evaluation and other aspects of ISO 9001:2015, why not contact one of our team of ISO specialists? Email hello@cgbc.ie or call us on +353 (0)1 620 4121.
