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MDM TQM

Performance measurement is the regular collection and analysis of data to track resources, work produced, and whether objectives were achieved. It determines what a program accomplishes and if goals are being met. Key concepts include setting measurable expectations, monitoring feedback, and taking corrective action. The performance measures strategy framework identifies indicators to continuously monitor results and efficiency to make informed decisions. Examples of metrics include percent reductions in costs, defects, and cycle times or increases in quality, flexibility, reliability, and innovation. Methods to present measures include time series graphs, control charts, cost of quality analyses, and capability indices.

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120 views5 pages

MDM TQM

Performance measurement is the regular collection and analysis of data to track resources, work produced, and whether objectives were achieved. It determines what a program accomplishes and if goals are being met. Key concepts include setting measurable expectations, monitoring feedback, and taking corrective action. The performance measures strategy framework identifies indicators to continuously monitor results and efficiency to make informed decisions. Examples of metrics include percent reductions in costs, defects, and cycle times or increases in quality, flexibility, reliability, and innovation. Methods to present measures include time series graphs, control charts, cost of quality analyses, and capability indices.

Uploaded by

Muhammad Tayyab
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Performance measures

Introduction
Performance measurement is the regular systematic collection, analysis and reporting of data
that tracks resources used, work produced and whether specific outcomes were achieved.
Performance management is not only about employee performance reviews and getting the most
out of workers. It is about reviewing the performance of the entire organization in the context of
specific strategic objectives and then managing all aspects of business operations to achieve
those objectives.
Simply put, performance measurement is a determination of what a program accomplishes and
whether desired results are being achieved. Performance measurement is the ongoing monitoring
and reporting of program accomplishments, particularly progress towards pre-established goals.

Basic concepts
Setting realistic expectations that are measurable
Thinking through how to continuously capture measuring information
Developing strategies and tactics capable of accomplishing clearly defined expected
outcomes
Monitoring/tracking feedback from actual results
Taking corrective action when there is a deviation between actual and predicted results
determine the result of a competition
To select individual players for a team
diagnosis of strengths and weaknesses of players
prediction of future performance results
Evaluation of the instruction methods.

Strategy
The performance measures Strategy Framework identifies the indicators required to monitor and
gauge the performance of a program. Its purpose is to support program managers in:
continuously monitoring and assessing the results of programs as well as the
efficiency of their management;
making informed decisions and taking appropriate, timely action with respect to
programs;
providing effective and relevant departmental reporting on programs; and
Ensuring that the information gathered will effectively support an evaluation.

An example of a system that emphasizes percent improvement might contain the function and
metrics as given below:
Quality
Percent reduction in cost of poor quality
Percent reduction in nonconformities
Percent of certified suppliers
Cost
Percent increase in inventory turnover
Percent reduction in data transaction
Percent increase in output dollars per employee
Flexibility
Percent reduction in cycle time
Percent reduction in setup time
Percent reduction in batch size
Reliability

Percent of processes capable of Cp = 2.0


Percent reduction in down time
Percent reduction in warranty costs
Percent reduction in design changes

Innovation
Percent reduction in new product introduction time
Percent increase in new patent granted
Customer perception as a leader in innovation

Performance measure presentation


There are six basic techniques for presenting performance measures.
(1) Time series graph for percent nonconforming
Time as measured by days, weeks and months shown on the horizontal axis and performance
measures is shown on the vertical axis. This graph shows favorable and unfavorable trends in the
measure.

(2) Control chart for percent nonconforming

(3) Taguchis quadratic loss function for nominal-the-best

(4) Capability index


It is the ratios of the tolerance to the capability. There are two measures:
One indicate the ability of the process to meet the specification
Other indicate the centering of the process on the target
(5) Cost of poor quality
(6) Malcolm Baldrige national quality award

Quality costs
Cost incurred by a company to ensure that a product meet a consumer's requirements. TQM is
designed to provide product quality at full customer satisfaction and lowest quality cost.
The cost of doing a quality job, conducting quality improvements and achieving goals must be
carefully managed, so that the long-term effect of quality on the organization is a desirable one.
These costs must be a true measure of the quality effort, and are best determined from an
analysis of the costs of quality. Such an analysis provides:
A method of assessing the effectiveness of the management of quality
A means of determining problem areas, opportunities, savings and action priorities
Cost of quality is also an important communication tool. Crosby demonstrated what a powerful
tool it could be to raise awareness of the importance of quality. He referred to the measure as the
Price of Nonconformance, and argued that organizations choose to pay for poor quality.
Quality-related activities that will incur costs may be split into prevention costs, appraisal costs
and failure costs.
Prevention costs
The costs of all activities specially designed to prevent poor in products or service. Prevention
costs are associated with the design, implementation and maintenance of the TQM system. They
are planned and incurred before actual operation, and could include: Examples of the costs are

New product review


Quality planning
Quality improvement projects
Quality assurance

Appraisal costs
Appraisal costs are associated with the suppliers and customers evaluation of purchased
materials, Processes, products and services to ensure they conform to specications. They could
include:
Verication
Quality audits
Vendor rating

Failure costs
Failure cost can be split into those resulting from internal and external failure.

Internal failure costs


These occur when the results of work fail to reach designed quality standards and are detected
before they are transferred to the customer. They could include:

Waste
Scrap
Rework or rectication
Failure analysis

External failure costs


These occur when the products or services fail to reach design quality standards, but are not
detected until after transfer to the customer. They could include:
Repairs and servicing
Warranty claims
Complaints
Returns

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