QHSE, management, pilots... How to choose the right KPIs?

Published on -

VISU-Mar-08-2021-03-17-10-06-PM

The implementation of KPIs (Key Performance Indicator) is a major concern. Within the QHSE departments, the dashboards illustrate the functioning of its processes. Internally, KPIs can be valuable data to communicate.  So which indicators should be chosen? And how to use them?

The ISO 9001 v2015 standard does not explicitly require the implementation of KPI dashboards. Nevertheless, it is specified in chapter 6.2.1:

 

Can quality objectives be measurable, monitored and updated? 

Therefore, the company must keep records as proof of the achievement of objectives.

 

Why implement KPIs?

KPIs are performance indicators. In order to measure it, every organisation shall analyse the effectiveness, efficiency and performance of its activities at the same time. 

  • effectiveness verifies the achievement of the objectives set.
  • efficiency ensures that the company has achieved its objectives at the best cost with the minimum of means.
  • relevance makes it possible to know whether the company has equipped itself with adequate means to achieve its objectives.

 

KPIs are used by the managers and employees concerned to check the effectiveness of actions and to facilitate decision-making accordingly. KPIs are therefore closely linked to the company's policy and strategy.

 

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How to choose your KPIs?

A good indicator must be linked to a certain objective: there is no point in defining a panel of indicators that have no purpose! Indeed, if the objective is too vague (for example, by defining an indicator simply called "improvement of employee well-being"), the dashboards will not be precise and therefore it will not be efficient. 

 

In order to set objectives, considering the SMART method is a great method: it consists of identifying objectives over a defined period of time. The SMART method has five criteria: "S" for "Specific"; "M" for "Measurable"; "A" for "Acceptable and Ambitious"; "R" for "Relevant"; and "T" for "Time-bound". The idea is to set concrete and achievable objectives and to measure them with an indicator. 

 

In order to assess the employees well-being, indicators such as "absence rate", "workplace punctuality", "participation in company’s events", etc...  must therefore be defined.  

 

It is important not to define too many indicators and to avoid building “gaz factories”. The performance of an approach is not measured by the number of indicators, but by the objectives achieved. The KPIs chosen must be easy to achieve and communicate. 

 

Thus, the representation models that are used most frequently are graphics, as they have the advantage of being very visual and are understandable to everyone. Make sure that the dashboards are clearly and internally presented, either on notice boards or on the company's Intranet. Of course, these can be clarified and explained to each department.

 

 

What key indicators should be used?

For the direction

The direction has key performance indicators for all products and related activities. Here are some examples of indicators:

  • Monitoring expenses and investments figures;
  • The absence rate;
  • The rate of Work Accident and Occupational Diseases;
  • The wage bill and the workforce evolution;
  • The turnover evolution;
  • Monitoring the invoices and deadlines payments...

 

For the QHSE service

The QHSE department has its own dashboards made up of both performance indicators as well as monitoring and management indicators.

Management indicators include:

  • The number of audits carried out;
  • The number of quality meetings / management reviews organised;
  • The number of action plans in progress...

 

Performance indicators include:

  • The customer satisfaction rate (via customer satisfaction mapping);
  • The costs generated by customer complaints;
  • The average production time;
  • The product compliance rate;
  • The rate of conformity of deliveries...

 

For process pilots

Pilots monitor indicators related to the activity/process for which they are responsible. Here are a few examples:

  • Scrap rate on a line dedicated to the process;
  • Compliance with deadlines rate;
  • Number of deliveries refused by the customer;
  • Number of actions completed on the action plan;
  • Rate of non-conformities noted on the process...

 

Recommended for you  The ultimate guide to setting up an effective QUALITY MANAGEMENT SYSTEM (QMS)  - Free Download

Key indicators: how to manage them?

If a QHSE manager has the reflex to open the spreadsheet to track, report and consolidate your key data, it means the IMS and/or QMS is not yet fully digitised. No need to panic, there is still time to get a dedicated management solution to monitor the processes and key indicators in real time. 

 

Indeed, with a dedicated platform (such as BlueKanGo), all data from the field will generate statistics that are accessible and usable in real time. It is even possible to produce automated reports (using Business Intelligence type tools) that present key indicators in the form of fully customised graphs. A significant time saving when preparing management reviews or simply for reporting on your activity. There will be no need to chase after figures: they will be directly exploitable.

 

To conclude, each company and department chooses its KPIs according to its field of activity and its priorities. Given today's competitive challenges, it is difficult to ensure optimal monitoring of key indicators without digitalisation of the management system. So, are you ready?

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