Chapter 6 of TQM

1. PERFORMANCE MEASUREMENT

2. PERFORMANCE MEASURE
• The sixth and final concept of Total Quality
Management
• It plays an important part in the overall success or
failure of a business organization.
• Performance measures quantitatively tell us
something important about our products,
services and the processes that produce them.
• They are a tool to help us understand, manage,
and improve what our organization do.

3. Performance Measures let us know:
•How well we are doing
•If we are meeting our goals
•If our customers are satisfied
•If our processes are in statistical control
•If and where improvements are necessary

4. As a process, performance measurement is not simply
concerned with collecting data associated with
predefined performance goal or standard. Performance
Measurement is better thought of as an overall
management system involving prevention and
detection aimed at achieving conformance of the work
product or service to your customer’s requirements.
Additionally, it is concerned with process optimization
through increased efficiency and effectiveness of the
process or product. These actions occur in a continuous
cycle, allowing options for expansion and improvement
of the work process or product as better techniques are
discovered and implemented.

5. Performance
Measure
Number
Unit Gives a magnitude (how
much)
Gives the number a meaning
(what)
• Production activity uses measures such as
defects per million, inventory turns, and on
time delivery.
• Service activities uses measures such as
billing errors, sales per square feet,
engineering changes, and activity time.

6. Essential Elements of Performance
Measures (by Ray F. Boedecker)
TYPICAL
MEASUREMENT
CRITERIA CHARACTERISTICS
OBJECTIVE

7. OBJECTIVE

8. TYPICAL MEASUREMENT
What should be measured is frequently asked by
managers and teams.

9. CRITERIA
All business organizations have some measurements in
place that can be adopted for TQM. In order to
evaluate the existing measures or add new ones,
there are seven criteria to be followed:

10. CHARACTERISTICS
One of the seven basic characteristics is used to
measure the performance of a particular process
or function.
a. Quantity – most common measures; refer to how many
units a production or business produces
b. Cost – amount of resources required to produce a given
output
c. Time – time needed for production
d. Accuracy – number of non-conformances in the output
e. Function - accountability, systems, standards of
performance, or policies and procedures; it all refers to the
structure that supports success.
f. Aesthetics – how the product looks, feels, sounds, tastes, or
smell and is quite
g. Service – service activity

11. WHY DO WE NEED MEASURE?
• Control: measurements help to reduce variation
• Self-Assessment: Measurements can be used to access
how well a process is doing, including improvements
that have been made
• Continuous Improvement: Measurements can be used
to identify defect sources, process trends, and defect
prevention, and to determine process efficiency and
effectiveness, as well as opportunities for improvement
• Management Assessment: Without a measurement
there is no way to be certain we are meeting value-
added objectives or that we are being effective and
efficient.

12. The basic concept of performance
measurement involves:
Planning and meeting establishes
operating goals/standards;
Detecting deviations from planned
levels of performance; and
Restoring performance to the
planned levels or achieving new
levels of performance.

13. BENEFITS OF
MEASUREMENT
To identify
whether the
company is
meeting customer
requirements.
How do we know
that we are
providing the
service/products
that our
customers
require?
To help us
understand the
company’s
processes. To
confirm what we
know or reveal
what we don’t
know. Do we
know where the
problems are?
To show where
improvements
need to be made.
Where can we do
better? How can
we improve?
To ensure
decisions are
based on fact, not
on emotion. Are
our decision based
upon well
documented facts
and figures or on
intuition and gut
feelings?

14. To show if
improvements
actually happened. Do
we have a clear
picture?
To reveal problems
that bias, emotion,
and longevity cover
up. If we have been
doing our job for a
long time without
measurements, we
might assume
incorrectly that things
are going well. (They
may or may not be,
but without
measurements there
is no way to tell.)
To identify whether
supplier are meeting
the company’s
requirements. Do our
suppliers know if our
requirements are
being met?

15. THANK YOUWala na, finish na
Jurado, Jea Alyssa Nicole
Pancho, Quennie
Tilan, Maria Emma Czarina