Leading Performance Indicators

 

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Our newsletters provide information on business management systems and process improvement methods. These systems include ISO 9001 QMS, AS9100 Aviation, Space and Defense, ISO/TS 16949 Automotive, ISO 27001 Information Security, ISO 13485 Medical Devices, ISO 14001 Environmental Management Standard, and others. Subjects include performance improvement methods such as Six Sigma, Lean Enterprise, and other topics of interest to our readers.

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Leading Performance Indicators

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Jim is the GM at a $65 million / 225 employees, electronics manufacturing firm in the Southwest (let us call it JR manufacturing). In a recent meeting Jim described everyday life at work.

“At JR Manufacturing, time flies for everyone. The moment I walk in every morning, people come to me with different issues, ask my opinion on how to solve them and you have no idea what kind of issues are waiting for you daily. This is what makes it interesting and exciting. I am a hands-on kind of manager and I do get involved with everyday issues and my people appreciate that.”

 

Sounds familiar?

In fact, this situation, where the senior and mid-level managers spend majority of their time to put out fires, prevails in numerous organizations on a consistent basis.  This is “normal” to many in those circumstances.

Let’s take a look at the significant downsides to this style of management.

a) Jim’s recommendations mostly came from prior experience with little in-depth analysis of the current issue or data to back up his decisions. As a result, the managers and shop floor associates don’t bother to find a solution to the issue. They were used to seeing all the decisions coming from Jim. Jim needed to develop new customers and start a new product line. However, he was so busy with everyday issues; the growth of the business was suffering.

b) No one developed skills for root cause and problem solving; everything depends on Jim and two of his supervisors (the benefit of thorough root cause analysis, documentation and communication to standardize did not exist). How effective can a hands-on kind of manager be in this working environment?

c) All major key performance issues (such as customer quality issues and on-time delivery) are published at the end of the month and corrective actions are discussed at that time. Vital metrics are now lagging indicators, and could be changed to leading indicators if JR Manufacturing used Lean Daily Management and Problem Solving Techniques.

 

Daily Performance Management involves looking at issues on all key performance indicators from the day before, finding the root cause and putting in countermeasures. Issues from the day before are fresh in the minds of all involved and investigation of the problem will be much easier. Management of the issues and root cause analysis takes place where the issues occur.

Let’s look at an example of a visual dash-board display of performance indicators that helps managers to understand the “state of the union,” in a timely manner.

 

BDC Manufacturing (not a true company) has implemented active real time daily management to monitor safety, quality, delivery and cost (SQDC, as commonly called in a Lean organization). At every department (engineering, manufacturing, sales) you would find a 5 ft x 8 ft board that displays the results of 5 key performance indicators – the goals and month-to-date performance, results from the day before, pareto of issues, root causes and corrective actions to each issues, year-to- date performance. Each sheet is color coded. Green, means the goals are met and red means goals are not met.

 

Graphs on daily key performance indicators (KPI’s) charts are prepared with green and red marker pens. As a manager looking at this dash-board, it is clear he/she should spend the time on the most critical issue and try to understand what the root causes are. The visual dash-boards give a prioritization of issues to the management in a 15-second glance.

When the expectations are established by management and employees are expecting questions such as “why did this happened and what are you doing about it,” they will take ownership of the issues and find the solutions. The management is there only to counsel and make sure this process works. The senior management now can focus their attention to strategic issues such as business growth and customer relationship.

Next month we will discuss some good examples of solving problems at the department level. Contact us with any questions.

 

Process Management Ownership

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A process owner is a person who is given the responsibility and authority for managing a particular process.

Most organizations find it useful to appoint individual process owners and define their responsibilities as ensuring the implementation, maintenance and improvement of their specific process and its interactions with other processes.

However, this does not mean a process cannot be owned by a team, a group, or a particular department. Ensure that process ownership clarity clearly exists.

 

Process owners take an organization-wide view of their processes. They may not truly “own” the process in that some of the people who are involved in carrying out the process may not report to them.  Instead, the owner is responsible for the design of the process, in other words, how it is carried out, how it interacts with other processes and how it is measured. This responsibility is an on-going task..

 

Process owners have responsibility for their specific process, end-to-end. However, as stated earlier, this does not mean that all the staff involved in a process actually report to the process owner. Process owners usually have responsibility for most steps in the process and are able to influence other key areas outside their direct organizational control.

Process owners should ensure the following activities are completed:

 

– Describe its links and interactions with other processes
– Identify its documentation and training requirements
– Issue and maintain procedures, instructions and records
– Communicate process changes to all process owners
– Analyze performance data and set process/quality objectives
– Track progress against process performance targets
– Identify risks and opportunities with the current process

A process owner is the person immediately accountable for creating, sustaining and improving a particular process.  This always includes being responsible for the outcomes of the process.

Interested in more information on process owner responsibilities?  Contact us we have a valuable list.

 

What Are The Costs of Certification?
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Every time we meet a potential client one of the questions they ask is “how much does a certification audit going to cost?” Unfortunately there is no simple answer to this question as it depends entirely on your organization and the management system.

 

The number of employees has the biggest impact. It informs the certification body on the size of your organization and how many  users of the management system processes there are. This is important as it provides a starting point for the audit duration based on the IAF (International Accreditation Forum) document.

 

The scope of certification determines the activities you conduct as a business. It allows the risk identification associated with your company’s scope and the impact that the potential failure of the management system may have on your organization and the wider industry and community.  For example, there is much more risk associated with a quality or environmental management system failure in a power plant, than there would be should a similar management system fail in an office environment.

 

The number of sites or locations your organization operates from can impact costs. When you have multiple locations across the world it may be possible to sample your sites if they are all conducting the same activities. If however you have a unique process at a site, then an audit of that location each year may take place to ensure compliance within the scope.

Finally your quote may be impacted if you have integrated your management system with another standard. The introduction of Annex SL in 2015, as a common structure for management systems, has enabled and eased the process of integrating management systems and conducting integrated management system audits.  An organization that has chosen to integrate ISO 9001:2015, ISO 14001:2015 and OHSAS 18001:2007 for example, will find cost and time efficiencies compared to those who implement separate management systems for Quality, Environmental and Health and Safety.

 

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In the News
Medical Device Manufacturers Warned   

    

An FDA investigation was conducted from January to February 2017 at a class II medical device manufacturer. The FDA laid out several concerns in its April 21, 2017, warning letter, noting areas of CAPA noncompliance.  A review of past responses determined that unsatisfactory corrective actions were taken in clean-room filling operations, and testing and validation of heat-seal integrity. In both cases, the medical device manufacturer closed its observations but failed to provide validation of why production did not need to be halted at that time.

 

FDA warning letters to medical device manufacturers continue to offer convincing evidence that CAPA noncompliance remains a top concern.  For more detailed information see the complete article.

 

New Standards for Call Centers  
ISO 18295-1:2017-“Customer contact centers-Part 1: Requirements for customer contact centers”, specifies best practice for all contact centers, whether in-house or outsourced, on a range of areas to ensure a high level of service; these include communication with customers, complaints handling and employee engagement.
Complementing this, ISO 18295-2:2017-“Customer contact centers-Part 2: Requirements for clients using the services of customer contact centers,” is aimed at those organizations making use of the services of a customer contact center to ensure their customers’ expectations are being met through its effective engagement. It provides guidance on the types of information the organization needs to provide to achieve high levels of customer engagement.

To purchase these standard, visit the ISO Store.

 

The New ISO 37001 Standard   

Bribery and corruption are a $1 trillion drain on the global economy and a door-shutting event for companies unable to prevent rogue acts from destroying a company’s entire reputation.  But how do ethical, socially responsible organizations become more proactive? Can this whole topic be embraced as an opportunity as opposed to a problem?
ISO 37001:2016-“Anti-Bribery Management Systems,” like its siblings from the ISO portfolio of management systems standards, sets forth a clear, no-nonsense framework that organizations can use to help prevent bribery.

For more detailed information see the complete article.

 

Training Courses
 
All courses can be delivered at your company or at our training centers. We do provide training beyond our home state of Arizona. Click on the course title for description, schedule, registration and payment. Group discounts are available. We also provide custom designed training to fit your specific needs. All training is fully documented for your training records and certificates of training are awarded.
 
Don’t see a course or schedule that fits your needs?  Contact us.
 

Transition Time Becoming Shorter. 

 

  1. COMPLEXITY – Do not underestimate the work involved! The changes are significant and will require an extensive evaluation of your existing system to ascertain the degree of conformity with the new risk based approach and further new requirements.
  2. TIME – Do not underestimate the time involved! The ISO 9001:2015 /AS9100D:2016, IATF, and … transition deadline of September 2018 (actually sooner based on your next CB audit) is not that far away!
  3. TEAMWORK – Involve the right people now.  This is NOT the Quality Manager’s Job, it’s Leadership. A successful transition and activities must be executed at the right time with the correct responsible parties.

If your organization hasn’t started yet, it’s time to get started!

 

Walter Tighe and SES Team

Sustaining Edge Solutions, Inc.
Toll Free 888-572-9642
 

 

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