Indicators

QUALITY MANAGEMENT SYSTEM

INDICATORS AND SYNOPTICAL TABLES

English translation of the French document FD X 50-171 (AFNOR June 2000)

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Contents Page Introduction 1. Scope…………………………………………………………………………………………………………3 2. Terms and definitions……………………………………………………………………………………..3 3. Prerequisites………………………………………………………………………………………………..3 3.1 Inventory ........................................................................................................................................4 3.2. Optimisation of needs search..........................................................................................................5 4. Identification ..................................................................................................................................5 4.1 Why? ...............................................................................................................................................5 4.2 By whom? ........................................................................................................................................5 4.3 For whom?.......................................................................................................................................6 4.4 What ? .............................................................................................................................................6 5. Conception ....................................................................................................................................6 5.1 Defining the scope of the measurement...........................................................................................6 5.2 Determining the objectives...............................................................................................................7 5.3 Identifying the criteria.......................................................................................................................7 5.4 Establishing the parameters of each criterion ..................................................................................7 5.5 Composing the indicator .................................................................................................................7 5.6 Evaluating the feasibility of the indicators ........................................................................................8 5.7 Defining the functioning ...................................................................................................................8 5.8 Formalising the process...................................................................................................................9 5.9 Constructing a synoptical tables ......................................................................................................9 6. Implementation..............................................................................................................................9 6.1 Training the personnel concerned...................................................................................................9 6.2 Communication...............................................................................................................................9 6.3 Validation ......................................................................................................................................10 6.4 Coordination .................................................................................................................................10 6.5 Implementing the record plan........................................................................................................10 6.6 Completing and disseminating the synoptical table........................................................................10 7. Exploiting the information ..........................................................................................................10 7.1 Defining the strategies for improvement........................................................................................11 7.2 Communicating the results............................................................................................................11 8.

8.1 8.2 8.3

Periodic examination of the indicator and the synoptical table ..............................................11 Relevance of indicators and synoptical tables...............................................................................11 User satisfaction ...........................................................................................................................11 Evolution of the process ...............................................................................................................12

Appendix A (informative) The different types of indicators .............................................................13 Appendix B (informative) Examples of indicators (representations) ..............................................15 Appendix C (informative) Examples of synoptical tables ................................................................16

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Introduction The approach described in this document is intended for use in the elaboration of indicators and synoptical tables. It contributes actively to the measurement of phenomena concerning the functioning of an organisation and thus facilitates the decision-making process. This document may therefore be of use for any organisation engaged in a quality management procedure.

This document should be seen as a support encouraging users to go beyond the information contained within. It is a pedagogical instrument and should not in any sense be considered as “the reference work� in this field: the elaboration of indicators and synoptical tables is limited only by the reader’s imagination.

1. Scope This document sets out a method for designing, implementing and coordinating indicators and synoptical tables.

It may be used: - by any kind of organisation irrespective of its activity and size - for all kinds of indicator This document is intended for persons: - setting up and managing an indicator and synoptical table.

- using these indicators and synoptical tables for guiding their process or for making decisions.

2. Terms and definitions For the purposes of this document, the following terms and definitions apply: 2.1 Indicator Chosen item of information, associated with a criterion, designed for the observation of its developments at defined intervals.

NOTE: an indicator sometimes requires an aggregate of measurement results.

2.2 Synoptical table Guidance and decision-making tool comprising selected indicators.

2.3 Criterion Character or sign making it possible to distinguish a thing or notion, and to make a judgement.

2.4 Parameter Factor on which the criteria are based.

3. Requisites This document is constructed around the life cycle of the indicators and synoptical tables set out in Figure 1.

This cycle is applied in full to both the definition and the first implementation of the process. It is subsequently partially applied in order to adapt the indicator process to the situation and realities of the organisation, and to ensure that it is both efficient and effective.

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Input data

Procedure

Output data

§

4

Identification By whom?

For whom?

What?

Conception Composition of indicators Definition of functioning Formalisation Construction of synoptical table

Needs of evolution

Needs Pre-existing indicators and synoptical tables (if any)

Implementation 1st implementation Training Coordination, communication

Structured indicators and synoptical tables

Filled indicators and synoptical tables

5

6

Exploitation 7 Indicators and synoptical tables validated periodically

Feedback from users Periodical examination of the system Relevance Satisfaction Actions to be carried out

Evolution needs of indicators and synoptical tables

8

Figure 1 – Life cycle of indicators and synoptical tables 3.1

Inventory

Before proceeding to devise new indicators, it is best to draw up a list of existing indicators and to analyse them with a view to: - assess the relevance of the existing indicators - identify the reasons why existing indicators have not been exploited - abandon irrelevant indicators - detect indicators already relating to the key parameters and which can be partially or wholly used, improved, etc.

This inventory guards against the danger of a profusion of indicators which would have the effect of discrediting the initial procedure (too many indicators and no exploitation). It should be carried out at regular intervals in order to guarantee the efficacy of the synoptical tables.

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3.2

Optimisation of needs search

When several persons in positions of responsibility request indicators, or when several processes require indicators, the requests should be grouped so as to ensure optimum conditions for the elaboration and implementation of the indicators.

4. Identification 4.1

Why?

The duties of a company’s managerial staff include the supervision of these processes.

The dynamic of this supervisory function consists firstly in determining and deploying the objectives according to a previously defined strategy of continuous improvement, and secondly in applying the necessary adjustments for attaining these objectives.

Measuring and the exploitation of such measuring are crucial to the success of any progress procedure.

The indicators are designed to provide information on the parameters linked to the processes put into practice.

The purpose of the synoptical tables is to bring together and to synthesise the indicators so that they can be exploited by the management.

The indicators and synoptical tables are therefore essential tools for guiding an organisation, a team or a process in order to reach a particular set of objectives. It follows that they may be used for steering the quality management system.

In order to analyse a situation and to take any corrective or preventive actions, management must have the necessary information at its disposal at the right time. In particular, it needs to be able to trace the way a situation develops over time and to measure any deviations from the objectives.

An indicator must therefore be defined in function of a given objective through a top-down approach, i.e. starting by knowing the objectives in order to know what to measure, rather than measuring what is measurable prior to knowing what this is to be linked to. Thought must be given to the form of a synoptical table and the choice of indicators in order to make it easier to reach and take a decision.

An indicator is born, develops and, particularly in the case of a changing situation, may die and give birth to an indicator more suited to a new set of circumstances.

4.2

By whom?

The first step consists in determining who is to be in charge of implementing the indicator and synoptical table system – preferably a member of the management team who is in a position to carry out the corresponding actions. In addition to possessing leadership qualities, this person must: - be mandated by the Management - have a reputation of integrity and neutrality - be able to manage a group - know how to listen, detect and deal with interactions, analyse and exploit individual reactions This person is responsible for seeing that actions are correctly executed, deadlines met and budgets respected. He/she is at all times conscious of the implications of the project and their repercussions for the company, and acts as arbitrator in the event of internal disputes.

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As soon as the conception phase is launched, the resources required for implementation (human and material means, etc.) should be evaluated and then weighed against the expected gains. In the light of this analysis, the appointed leader decides whether or not it is necessary to set up a team to elaborate and implement the indicator and synoptical table system. In certain circumstances, it may be necessary to adopt a project mode, but in all cases the system must be validated in conjunction with the users.

In order to make the most of the group’s resources, to create a true dynamic, to manage diversity and to ensure that the group works as a team, the leader must take particular care in the composition and size of the group. He must make sure that: - the group is representative - the members are all concerned by the indicators to be elaborated - the members will participate assiduously in the work 4.3 For whom?

The clients of the indicators and synoptical tables must be identified: person in charge of an organisation, a team or a process, an operator, etc..

4.4 What Steps should be taken, in conjunction with the clients of the indicators and synoptical tables, to pinpoint those elements which best reveal the situation concerned with reference to the previously defined objectives: results, alert mechanisms (thresholds, trends, acceptable levels) whose measurable characteristics may be physical or perceptible sizes.

All those involved should be in agreement as to the measurement principles adopted.

Examples of measurements: quantities produced, reject rate, monthly trends with regard to delays in implementing corrective measures, reductions in operating expenses, distribution per category, etc..

5. Conception 5.1

Defining the scope of the measurement

“What should the measurement refer to?”

Defining the scope of the measurement is a question of determining the framework and limits within which the measurement is to be applied. It therefore involves either an action which is to be carried out or an area on which a careful watch is to be kept.

The choice will depend on the particular criteria of the indicators’ client. Scope and size may thus vary considerably.

A few questions may help to clarify the situation: - What is the mission concerned?

- What are the defined objectives?

- What are the priorities?

- Which processes need to be improved?

The choice may be made in the light of an analysis of the critical processes or on the strength of the results or identified malfunctions of these processes.

Example:

Scope of measurement → Order processing

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5.2

Determining the objectives

“What are we trying to achieve?”

Once the scope or scopes have been defined, the objectives corresponding to these scopes must be identified. These either already exist (objectives of an action, objectives of the entity) or are to be determined: - What results are expected ?

- What are the improvement aims?

The full sense of the measurement is expressed by these objectives.

The objectives are set or known by the indicator and synoptical table client.

Example:

5.3

Objective Æ Deliver orders on time

Identifying the criteria

“How can we take stock of the situation in relation to the objectives”?

It is now necessary to define one or more criteria and to trace them or their development as a means of reviewing the situation in relation to the objectives: - Which elements contribute to the achievement of these objectives?

- Which elements endanger the achievement of these objectives?

The same objective may involve several criteria.

Example: Criteria Æ Æ

5.4

Conformity of dispatches with scheduled delivery times Efficacy of the organisation

Establishing the parameters of each criterion

“What can be measured on the criterion whose evolution is to be traced?”

Here the challenge is to define what makes it possible to quantify the criterion. The choice of the different parameters adopted impacts strongly on the relevance of the measurement when it is exploited.

Example:

5.5

Parameters Æ Æ

Number of orders delivered on time Number of orders treated within a given period

Composing the indicator

“How can the parameters be transcribed into figures?”

In order to construct the indicators, the parameters of the chosen criteria must be transcribed into figures or even combined so as to create a more global indicator.

Example: Indicators

5.5.1

Æ Æ

Number of orders delivered on schedule in relation to number of orders Organisation efficacy = number of orders processed compared to number of orders received See list of examples in Appendix A

Quality of a good indicator

A good indicator must: - be a faithful and representative reflection of the criterion to be measured - reveal changes in the criterion - give accurate information - be reliable: gives confidence in the successive measurements - be easy to establish, supply and use - be compatible with the other indicators of the system so that comparisons and analyses can be made - be cost-effective: usefulness, cost, etc.

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Format of the indicator The indicator may be: - a counting - a degree measured or estimated on a scale of values - a rate - a ratio - a mark estimated on a marking grid, etc.

It may take different forms such as: - a diagram (see examples in Appendix B): histogram, pie chart, radar, curve, etc.

- a table with figures - colours - signs, drawings, etc.

5.5.3

Thresholds

The objectives to be attained may require the definition of thresholds for certain indicators: - minimum or maximum values to be respected - value to be attained - range of values These limits may be materialised and represented on the indicators.

5.6

Evaluating the feasibility of the indicators

“Which indicators can be implemented?�

A preliminary feasibility study should be conducted so as to ensure that only workable indicators are adopted. This study may for example include: - the preliminary evaluation of the hierarchical implications - the evaluation of the cost of the indicator system and the means required: collecting and processing information, documentation, etc.

- the compatibility between the measurement criterion and frequency - the acceptance of the indicators by those involved in collecting the information: accurate and timely information

5.7

Defining the functioning

Responsibilities should be defined for: - collection: frequency and manner in which information is to be collected. Information should preferably be collected by those who are involved in the processes being measured as this task can easily be incorporated in their everyday activities - analysis (and methods of analysis) of the indicators and/or synoptical table.

- exploitation: How is the information exploited?

- communication: to whom and in what form are the results disseminated?

5.8

Formalising the system

In order to ensure the long-term interest and value of the indicators and synoptical tables, it is necessary to formalise them by the following elements: - identification of the indicator - scope of the measurement - objective - criteria - parameters - method of calculation (transcription of the indicator) - responsibility for, and frequency of, collecting information - responsibility for analysing (and methods of analysing) the indicators and/or synoptical table

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-

5.9

method of communication exploitation of information

Constructing a synoptical table

The purpose of a synoptical table is to pinpoint the actions required in order to reach objectives and to improve processes. The individual to whom the synoptical table is addressed should therefore be asked which indicators he/she wishes to be included in his/her synoptical table in function of his/her objectives.

It is best to use all available means to simplify the presentation of the indicators and synoptical table.

This should be done, for example, by using curves and diagrams and a limited number of indicators (less than 10) – see the example of a synoptical table given in Appendix C. The use of colours can also help to draw attention to changes of state, trends and positions in relation to a threshold. The synoptical table can reproduce the indicators directly, or may combine several indicators in order to present the information in the required manner.

The information displayed must be validated by the clients of the indicators and the synoptical tables .

An example of a completed synoptical table is given in Appendix C.

6

Implementation

6.1

Training the personnel concerned

The persons involved in collecting information must be trained in the appropriate methods and informed as to the role and usefulness of the measurements they are asked to make. An awareness of the logic behind the measurement system will not only make them operational, it will also enable them to react to unforeseen circumstances.

The persons concerned may be given a presentation of, or undergo training in, the methods of analysis and exploitation.

6.2

Communication

The purpose of communication is to make all the personnel aware of the indicators and synoptical tables used, with a view to facilitating the implementation and the acceptance of the system and to preparing the personnel for participation in the actions carried out in order to reach the corresponding objectives. Communication is also important as a means of maintaining motivation: all persons must understand that their participation is useful and must be in a position to appreciate the impact of their contribution.

To this end, it is necessary to: - explain that the implementation of indicators is an integral part of the organisation’s progress procedure but that it is not intended as a means of sanctioning or penalising the personnel - inform those involved in collecting information of the follow-up (actions undertaken, etc.) inform the personnel of the consequences of the indicators (series of actions, etc.) and of the results obtained - ensure that the indicators disseminated are comprehensible to all members of the personnel 6.3

Validation

Validation is carried out by implementing all or part of the indicator and synoptical table system. It provides an in situ verification of the efficacy of the indicators and synoptical tables by: - recording the observations of the persons involved - adjusting the system if and when it is appropriate - confirming its consistency with the initial requirements.

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6.4

Coordination

The implementation of indicators may call for a major cultural shift on the part of the individuals concerned.

In keeping with the participative procedure adopted for the construction of the system, an assistance, follow-up and reminder service is made available for the persons concerned.

A genuine commitment, support and integration on the part of the management will contribute to secure the permanence of the system and the reliability of the results.

6.5

Implementing the collection plan

Information is collected in compliance with the specified and formalised organisation (see § 5.8) 6.6

Completing and disseminating the synoptical table

The data amassed during the collection phase are presented in the form of synoptical tables established in accordance with the wishes of the persons requesting them (see § 5.9).

The completed synoptical table is forwarded, according to the previously defined periodicity, to the addressee who then decides on the course of action that he/she wishes to pursue.

7

Exploiting the information

This document is concerned with describing a methodology for the conception, implementation and coordination of an indicator and synoptical table system. The use to which the information itself is put does not form part of the life cycle of the system. Rather, it corresponds to the exploitation of the system’s output data (see Figure 1).

Nevertheless, the exploitation phase is the ultimate justification of the indicator and synoptical table system and as such should be addressed in this document.

The analysis takes into account all the indicators presented in the synoptical table. Indeed, the way in which the results of an indicator are interpreted may vary in the light of results contained in other indicators.

Example:

7.1

The “re-hospitalisation rate” indicator will usually cast light on the information provided by the “duration of hospitalisation” indicator

Defining the strategies for improvement

The scrutiny of indicators and synoptical tables makes it possible to spot the discrepancy between the desired results and those actually observed. It also reveals trends with regard to objectives and points to possible strategies for improvement.

It may turn out to be necessary to conduct a more thorough analysis of the criterion, to correlate the information with that obtained from other indicators, or to take any other action aiming to provide sufficient data on which to base a decision.

In such cases, the person in charge decides what action should be taken in order to modify the trend revealed by the indicator and to bring the situation in line with the objectives.

The adopted improvement actions are then piloted in the same way as the other actions undertaken (corrective and preventive actions, etc.) within the framework of the organisation’s management system.

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7.2

Communicating the results

Communication of the results given in the synoptical tables makes it possible to: - review the improvement actions and the results obtained - highlight both successes and failures, draw conclusions and launch the necessary actions - explain the desired objectives and margins of progress - mobilise the organisation’s personnel

8.

Periodic examination of the indicator and synoptical table system

It is necessary to examine the indicator and synoptical table system at regular intervals in order to make sure that it remains relevant and meets the objectives set. The examination could, for example, take the form of a survey of users or a review of the organisation’s objectives.

8.1

Relevance of the indicators and performance charts

Thought should be given to the cost involved in obtaining the indicators and in elaborating the synoptical table.

Moreover, an indicator may become ill-adapted: - if new objectives have been defined for the entity or if the objectives have changed - if there is a new person in charge of the indicators and the synoptical table, or if there is a new client and/or there has been a change in his/her requirements - if the criterion adopted is no longer capable of measuring the deviation from the objectives or if it is no longer significant (the action monitored has been completed, the criterion no longer varies, etc.)

If the usefulness of one or more indicators is not proven, or if they are no longer followed, the reasons must be sought and the continued existence of the indicator(s) called into question.

8.2

User satisfaction

The purpose is to make sure that the client’s needs are satisfied by the indicator and synoptical table system, and that these needs are still consistent with the quality criteria defined in § 5.5.1.

8.3

Development of the system

Depending on the results of these periodic examinations, the existing indicators may be retained, modified or withdrawn; or others may be created. The formalisation of these examinations ensures the availability of an updated indicator and performance chart system and contributes to the organisation’s procedure of continuing improvement.

These actions should preferably be carried out according to the life cycle, complete or partial, of the indicators and synoptical tables as set out in Figure 1 (cycle of the partially applied system).

Developments of the indicator and synoptical table system are then piloted in the same way as the other improvement actions undertaken within the framework of the organisation’s management system.

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Appendix A (informative) The different types of indicator The list below is given for information purposes and is not to be considered as exhaustive.

Scope Financial management

Examples of objectives - Optimisation of financial profitability

Human resources

-

Skills management

-

Optimisation of resources Stabilisation of personnel

-

Optimisation of installations

-

Maintenance of appliances

-

Documentation updated (product catalogue, prices, etc.)

Respect of obligations (contractual, regulatory)

Examples of indicators - Net margin/gross margin - Recovery rate - Recovery time - Percentage of personnel trained/to be trained - Absentee rate - Personnel turnover; number of departures/total workforce - Rate of use of equipment or installation - Unavailability rate (or out of service rate) - Repair time - Time spent in making updated catalogue available/product offer - Obligation satisfaction rate

-

Growth Prosperity Competitiveness

-

-

Innovation

-

-

Winning contracts (firming up offers)

-

-

Securing client loyalty

-

Material resources

Information system

-

Long-term survival of company

Commercial

-

Project management

-

Stability of requirements

-

-

Respect of delivery times

-

-

Progress

-

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Increased order book Increased market share Competitive positioning, e.g. prices, new products Percentage of turnover generated by new products Rate of offers converted into orders Wastage rate: number of clients lost/total number of clients Average duration of client’s relationship with the company Number of modifications to initial data Rate of tasks completed on time Rate of tasks completed

Scope Conception, development, industrialisation

Examples of objectives - Concretisation of study projects

-

Preparation of production (or execution)

Examples of indicators - Rate of study projects commercialised (number of projects commercialised / number of ongoing projects - Availability rate of production equipment

Purchases

-

Relations with suppliers

-

Production

-

Respect of production times (goods and services) Conformity of products and services Client assistance

-

-

-

Product measurement

-

Product and service conformity

-

Client satisfaction

-

Optimisation of satisfaction

-

-

Treatment of complaints from clients

-

-

Acceptance of products not conforming to expectations

-

-

Treatment of the causes of problems identified

-

Problem solving

-

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Conformity rate of products delivered by the supplier (delivery time, respect of specifications, quantity) Rate of late production (manufacture or acquisition) Non-conformity rate (products delivered or services supplied) Delays in responding to requests for assistance Non-conformity rate of products delivered or services supplied Client satisfaction rate (surveys, polls, etc.)

Complaints rate Average delay in responding to complaints Dispensation rate (delivery of non-conforming products negotiated with the client) Percentage of corrective actions concluded Rate of problems solved / problems identified

Appendix B (informative) This is just a translation of the page of examples shown in the French version. To understand these examples, please see the ad hoc French page.

Examples of indicators (representations) Turnover Objective Projected turnover Actual turnover Millions of Francs Months Remarks: the graph shows: - Progression of turnover - The objective to reach - The difference between forecast and actual result Breakdown of sales by product Situation at 31 October Remarks: the pie chart shows the contribution of each product to sales at a particular time t.

The data are expressed in percentages, the total always being equal to 100%.

Investments Estimated expenditure Actual expenditure Remarks: the representation shows : - Progression of turnover - The objective to reach - The difference between forecast and actual result

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Turnover Sales in FF millions Product 3 Product 2 Product 1 Remarks: The cumulated bar chart is more suitable than a table for representing the contribution of different products to turnover over several years.

Personnel training Situation at 31 October Intermediate objective at 31/10 Remarks: the histogram makes it possible: - to monitor the results of each unit compared to training objectives - to know the company’s cumulated position Equipment availability rate

Remarks: the radar chart gives an instant snapshot t with regard to several equipment items It is possible to feature the desired objective.

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Appendix C (informative)

This is just a translation of the page of examples shown in the French version. To understand these examples, please see the ad hoc French page.

Example of synoptical tables The synoptical table presented on this page is intended as an example of a possible synoptical table for a manager; it is not in any circumstances to be considered as a model.

Symbols used: [symbolique]: coloured discs are useful for rapid viewing of the situation with reference to a previously set objective or a pre-defined scale.

Example: for the “client satisfaction” indicator, the organisation’s scale may be as follows: Green Yellow Red Other modes of representation, such as those listed below, may also be used:

-

Trend: this is assessed in relation to the previous edition: Progression Stability Decline

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This is just a translation of the page of examples shown in the French version. To understand these examples, please see the ad hoc French page.

SYNOPTICAL TABLE Edition of 30/09/1999 (Quarterly) Turnover Estimated: FF 80 million Realised: FF 85 million Absenteeism Estimated: 5% Realised: 7%

Production Unit Manager Objectives Estimated turnover Realised turnover Objective Rate

Bills paid

Collection Average settlement time (days)

Turnover recovered (%)

Objective Situation at 30/09 Reception

Information

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Client Satisfaction (situation at 06/09) Delivery times After-sales service

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