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Performance Indicators - Quality

Quality
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Content of this Module

 Performance Indicators

 Examples

This Module reviews the Performance Indicators relative to Quality.

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Content of this Module

 Performance Indicators

 Examples

Let us consider the first topic.

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Performance Indicators

First Time Quality

Final Release

Consumer Complaint Rate

Food Safety related Complaint Rate

Non-Quality Costs (Factory Related)

Above are the main Performance Indicators relative to Quality. They are explained into more details in
the following slides.
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First Time Quality

FTQ 
Total number of lots produced  Number of lots not passing first examination
Total number of lots produced

It measures the effectiveness of the production process

to produce products conforming to specifications.

First Time Quality is the number of lots regularly released (all release parameters within specification
limits), without being delayed or held for further inspection or sampling or referred to a higher authority for
release decision.
It is expressed as a percentage of the total lots produced.
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First Time Quality

FTQ 
Total number of lots produced  Number of lots not passing first examination
Total number of lots produced

It measures the effectiveness of the production process

to produce products conforming to specifications.

First Time Quality can be applied to:

- the release of raw and packing material.
- the release of finished products.
- all decision steps in the process.
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Final Release

Units released to trade

Final Release 
Total units produced

It measures the number of units finally released to trade.

Final Release  First Time Quality

Final Release is the number of units (preferably pallets or cases) released to trade, including all First
Time Quality products and those products that were deemed non First Time Quality but ultimately were
shipped.
It is expressed as a as a percentage of the total units produced.
The Final Release number must always be equal or exceed the First Time Quality number.
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Consumer Complaint Rate

Number of Complaints
Consumer Complaint Rate   1 000 000
Number of Consumer Units Sold

It measures the consumer dissatisfaction with the delivered goods.

Consumer Complaint Rate is the number of complaints per million consumer units sold.
In addition to the direct manufacturing environment, the root causes of complaints could be located
anywhere in the entire supply chain.
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Consumer Complaint Rate

Any negative contact,
expressed either in writing or verbally,
reflecting the dissatisfaction of a
customer or a consumer (e.g. distributor,
supermarket, hotel, shopkeeper, final
consumer).

Number of Complaints
Consumer Complaint Rate   1 000 000
Number of Consumer Units Sold

Retail or consumer unit that

is sold to the end user.

It measures the consumer dissatisfaction with the delivered goods.

Consumer Complaint Rate is the number of complaints per million consumer units sold.
In addition to the direct manufacturing environment, the root causes of complaints could be located
anywhere in the entire supply chain.
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Consumer Complaint Rate

Number of Complaints
Consumer Complaint Rate   1 000 000
Number of Consumer Units Sold

Complaint Type: Factory Origin Complaints:

- design related - product quality
- factory origin - alleged illness
- distribution related - packaging
- Company's image - foreign bodies

Consumer Complaint Rate is the number of complaints per million consumer units sold.
In addition to the direct manufacturing environment, the root causes of complaints could be located
anywhere in the entire supply chain.
Complaints of factory origin may warrant examination as sub indicators.
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Food Safety related Complaint Rate

Number of Food Safety related Complaints

Food Safety related Complaint Rate   1 000 000
Number of Consumer Units Sold

It measures the consumer dissatisfaction with the delivered goods

in terms of potential safety aspects.

Food Safety related Complaint Rate is the number of food safety related complaints per million
consumer units sold.
In addition to the direct manufacturing environment, the root causes of complaints could be located
anywhere in the entire supply chain.
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Food Safety related Complaint Rate

"Alleged illness" and "foreign bodies"

reported complaints,
relative to an actual or potential
detrimental effect on health.

Number of Food Safety related Complaints

Food Safety related Complaint Rate   1 000 000
Number of Consumer Units Sold

It measures the consumer dissatisfaction with the delivered goods

in terms of potential safety aspects.

Food Safety related Complaint Rate is the number of food safety related complaints per million
consumer units sold.
In addition to the direct manufacturing environment, the root causes of complaints could be located
anywhere in the entire supply chain.
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Non-Quality Costs (Factory Related)

Non-Quality Costs = Process-related Losses (includes Cost of Overfilling)

(Factory Related) + Costs of Written off, Destroyed or Disposed Materials
+ Costs of Downgraded Materials
+ Costs of Special Operations (sorting, sieving, resampling, retesting...)
+ Other Non-Quality Costs (complaint handling and investigation...)

It measures all costs that incurred because a product

does not reach the required level of quality first time.

Non-Quality Costs (Factory Related) include all losses and actions that must be taken when a product
does not reach the required level of quality first time.
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Warning
First Time Quality & Line Efficiency

TH
LE 
NPH

Output
Pr oduction
Production TH 
Waste & Rework Line No min al Speed
Released Production Blocked

Performance Indicators should be viewed as a set whenever possible

and not viewed separately.

The calculation of Line Efficiency is based on Production (at the end of the line) and not on Released
Production (after QA tests).
In other words, it is possible to have Line Efficiency equal to 100% and still have a poor First Time
Quality (and Final Release). Therefore Line Efficiency should be analysed in combination with First Time
Quality (and Final Release).
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Performance Indicators

Exceptional Release
Recalled or Withdrawn Goods (ton, $, %)
Foreign Body Complaint Rate
Raw & Packing Material Quality per supplier
( FTQ for Raw / Packing Material)

Above is a list of additional Performance Indicators. Depending on the needs, these additional indicators
may help to focus on specific issues.
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Content of this Module

 Performance Indicators

 Examples

Let us now consider the next topic.

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Examples
First Time Quality & Final Release
Data:
A factory produces 10 lots of 500 cases each.
The last 8 cases of the last lot have been found to be defective.
The last 8 cases are sorted and 3 are released and 5 destroyed.
"lots" is used as
Calculation: calculation unit.

First Time Quality = 9 / 10 = 90.0%

The following calculation: If one unit out of the lot is defective,

FTQ = 4992R/O NG = 99.8%
5000 the whole lot will not qualify for
WWRONG
is First Time Quality.

Let us consider the following data.

Let us calculate First Time Quality.
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Examples
First Time Quality & Final Release
Data:
A factory produces 10 lots of 500 cases each.
The last 8 cases of the last lot have been found to be defective.
The last 8 cases are sorted and 3 are released and 5 destroyed.

Calculation:
Units released to trade = 4500 cases (FTQ) + (492+3) cases (non FTQ)
Units released to trade = 4995 cases shipped to trade

Units released to trade 4995

Final Release    99.9%
Total units produced 5000

Let us consider the following data.

Let us calculate First Time Quality.
Then let us calculate Final Release.
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Examples
Complaint Rate
Data:
Number of Consumer Units Sold = 1 500 000 cans
Total Number of Complaints = 2379
of which 25 are relative to an actual or potential detrimental effect on health

Calculation:
2379
Consumer Complaint Rate   1 000 000
1 500 000

Consumer Complaint Rate  1586 complaints per million consumer units sold

Let us consider another example.

Let us consider the following data.
Let us calculate Consumer Complaint Rate.
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Examples
Complaint Rate
Data:
Number of Consumer Units Sold = 1 500 000 cans
Total Number of Complaints = 2379
of which 25 are relative to an actual or potential detrimental effect on health

Calculation:
25
Food Safety Complaint Rate   1 000 000
1 500 000

Food Safety related Complaint Rate  16.7 complaints per million consumer units sold

Let us consider another example.

Let us consider the following data.
Let us calculate Consumer Complaint Rate.
Then let us calculate Food Safety related Complaint Rate.
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The End!

You have come to the end of this Module.

Please refer to the instruction GI-23.010-1 for more details.