Quality metrics are commonly used by organizations as a way to measure the performance of internal processes—specifically, processes which are difficult to measure. The most common type of quality metric is called a Key Performance Indicator (KPI). KPIs are used to quantify and measure and/or gauge the performance of operational goals that are connected to internal processes. Because KPIs and quality metrics are often not tied to revenues or net income, management must be creative in determining ways to measure and reach performance goals.
Create a flowchart of the processes you want to measure. The most common processes relate to customer service, expenses and net income. For instance, if you want to improve the quality of customer service, create a chart showing the process of dealing with customers, from marketing and sales to delivery. If you want to improve the quality of operations, create a flow chart diagram showing the steps involved in procuring inventory for the organization.
Define and quantify your goals. Using a flow chart, determine what it is about the process you would like to improve. For instance, if you want to create a KPI to help improve the quality of inventory or customer service, determine what the goal of the metric is. For inventory you might want to decrease costs by 10 percent. For customer service, you might want to decrease complaints by 10 percent.
Define a metric that can be used to reach your goal. Using the flow chart, pull out key words and processes that can be measured or are already measured within the organization. For instance, for a 10 percent reduction of inventory costs you can focus on the number of suppliers or cost savings over time. For a 10 percent reduction in customer service complaints, focus on the number of timely deliveries or the quality of items in stock.
Assign ownership of the report to one person. This will help ensure accountability. Be sure to give this person the authority to collect data from the appropriate holders of information. This may require a higher level of management buy-in.
Set goals and timetables to meet goals on a regular basis. Goals can be shared with the entire team working on the process. Encourage all team members to participate in ways to improve the process and provide rewards for goal attainment.
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