A very frequent feature of certified quality management systems according to the ISO 9000 family standards in Czech and Slovak companies is a fact that these systems don’t bring more important added value - they are only documented. The cause analysis of this fact leads to cognition that the most of processes within these systems haven’t yet implemented some basic principles of really sufficient and modern quality management systems, such as:

• the prevention principle,
• the comprehensiveness principle,
• the feed-back principle,
• the customer orientation principle,
• the mathematical support principle,
• the transparency principle,
• the results measurability principle,
• the team work principle,
• the continuous improvement principle,
• the effectiveness principle.

The more detailed description of these principles can be found at ”(Nenadál et al, 1998)” for example. I would like to discuss some possibilities of the last principle as I suppose this implementation seems to be very important task with special regard to a set of requirements defined at final draft of a new ISO 9001:2000 standard. The mentioned standard is based on the model of the complete quality management systems processes divided to the four major clauses:

1) management responsibility,

2) resource management,

3) process management,

4) measurement, analysis and improvement.

The clause ”Measurement, analysis and improvement” contains also one key requirement for quality system performance and effectiveness measurement. Let’s show a possible approach to such assessment.

We can say the quality management systems are efficient on condition they bring some important economic and social effects. A main relevant consequences of the working quality system are sketched at fig. 1. Every quality management system ought to offer serious internal and external effects.. The former show an attractive results in company towards productivity and effectiveness of the processes. Especially management can observe an interesting costs cutting down owing to various nonconformities reducing and it may influence a price’s changing which is attractive for consumers of course. The latter (external) effects are concentrated to high level of customer satisfaction and loyalty. I remind only that customer satisfaction and customer loyalty must be principal goals of company quality management system (the new ISO 9000 standards focus this goal finally). A repeated orders and variety of positive references lead to the raising of market share. And all mentioned changes affect a company business results improvement.

Unfortunately, the ISO 9000 family standards issued in 1994 had underestimated these economic consequences on my opinion and therefore the evaluation of quality management system effectiveness represents a rare activity within management review for the time being. I’m able to recognise two main reasons of this fact:

1. a target function of quality systems linked with present ISO 9000 family standards is not to maximise customer satisfaction (or customer loyalty) and business results, but to provide a confidence in supplier’s capability only,

2. the most of top and middle managers don’t use a suitable metrics and indicators for results measurement.

Let’s try to define therefore some indicators for the evaluation of quality management systems effectiveness. I suppose these indicators should meet these characteristics:

• a simplicity for use,
• a repeatability of evaluation,
• a utilisation of data available from a company quality records,
• authenticity and objectivity, etc.

If we considered relationships shown by fig. 1 we could make a difference between an internal and an external effectiveness of quality management systems.

As an appropriate indicators of the external quality management system effectiveness might be introduced:

This indicator can use an data from standard quality records as it is created:

where: V_c - the volume of claimed products (expressed by physical or financial units)

during the defined period,

V_t - the total volume of the products produced during the defined period.

It can be useful to express this indicator by ppm units too.

The positive trend asked: I_C continuous decreasing.

This indicator can be watched in case the company makes the customer satisfaction measurement by routine way. Afterwards we may to create a ratio:

where: I_rcs - the real value of the customer satisfaction index which is used as a tool of routine customer satisfaction measurement.

I_ocs - the optimum value of such index.

I recommend to see ”(Hayes, 1998)” where a detailed procedures for such kind of measurement are described.

The positive trend asked: I_CS increasing towards to 100 per cent value.

The evaluation and selecting of subcontractors represent comparatively regular activities within quality management system at present. So called subcontractor´s rating is an integral part of such kind of evaluation. The aim of subcontractor’s rating is to assess their ability to meet contract requirements including the quality system and any specific quality assurance demands. If we look upon the company as a supplier (subcontractor) we can suppose also that their consumers would probably carry on subcontractor´s rating. The results of this rating ought to be always notified to the subcontractor and then it is able to calculate next ratio:

where: R_s - the actual value of subcontractor’s rating made by certain consumer,

R_so - the optimum value of such rating.

The positive trend asked: I_CC continuous increasing.

A benchmarking is one of the most powerful tool of strategic management. It is the continuous process of measuring company outputs (products, services, etc.) and procedures against toughest competitors or those companies known as leaders. The benchmarking must provide information about performance gaps quantified by suitable metric system. And just the gaps known are a basis for benchmarking indicator monitoring:

where: P_o - the value of watched performance parameter of the company key process ( cycle

time, an error rate, a fill rate and on time delivery can serve as examples of the

performance parameters),

P_c - the value of the same performance parameters found out at the competitor which

was recognised as a leader.

The positive trend asked: I_B continuous increasing.

One of positive results connected with increasing of company quality management system effectiveness should be an important change of the external failure costs. These costs arise after delivery to a customer due to nonconformities or defects which may often include: complaints, warranty claims, products returned, discounts, loss of sales, recall of faulty goods, product liability, etc. More about these costs see at ”(Campanella, 1999)” or ”(Nenadál,1995)” for example. Therefore we can create:

where: C_ex - the volume of the external failure costs registered by company in certain

period,

C_m - the total manufacturing costs during this period.

The positive trend asked: I_EC continuous decreasing.

On the other hand we can define also an appropriate indicators of the internal quality system efficiency. For example:

This type of indicator is similar as previous one. But it is connected with another part of quality costs - with internal failure costs. They represent an useless expenditure within the company due to nonconformities and defects at any stage of so called quality loop, such as scrap, rework and repair procedures, retesting, replacement, failure analysis, losses caused by failure of purchased materials, etc. The indicator can be calculated by ratio:

where: C_in - the volume of the internal failure costs recorded by company organisational units in certain period,

C_m - see above.

The positive trend asked: the same as I_EC of course.

The quality costs, have mentioned above already, are total company expenditure to quality assurance and quality improvement. According to the PAF model they include besides internal and external failure costs also appraisal and prevention costs . The volume of these costs depends on quality management system level and on quantity of outputs produced. From this point of view the next ratio may be defined:

where: I_QC - the partial index of quality costs changing,

QC₁ - the volume of the producer´s quality costs during period 1,

QC₀ - the volume of the producer´s quality costs during period 0 which precedes the

period 1 (Note: both period must take an equal time of course!).

The next partial index of performance changing - I_P could be created similarly:

where: P_C1 - the key company performance parameter (for example: the volume of outputs

accepted by market) during period 1,

P_C0 - the same performance parameter during period 0.

Then is very useful to compare these two partial indicators by ratio:

The positive trend asked: I_CO continuous decreasing towards 0.

So called nonconformities (e.g. rework, scrap, waiting time, failure correction, waste, over resourcing) appear in every organisational unit within the company. This indicator is a tool for a monitoring of the nonconformities range. We can write:

where: V_n - the volume of varied nonconformities in certain work place (office, workshops, etc.) in defined period,

V_t - the total volume of products (or outputs) during the same period.

The volumes V_n and V_t must be expressed in equal type of units (financial or physical).

The positive trend asked: I_n continuous decreasing.

A process capability studies analyse the variation in the parameters caused by all parts of watched process. The process capability can be expressed as a number which is referred to as capability index - PCI. As these studies are looked upon comparatively standard activities in company quality assurance now we can formulate ratio:

where: P_PCIs - the number of processes with suitable process capability index, e.g. with PCI=1,33 as minimum,

P_PCIt - the total number of processes where the process capability studies were executed.

The positive trend asked: I_PCI continuous increasing towards 100 per cent, on condition P_PCIt is continuous raising too.

In case the internal and external failure costs and also appraisal and prevention costs are monitored, the company’s top management ought to watch every important change of total quality costs structure: the permanent raising of prevention expenditure on one hand and permanent decreasing of all failure costs on the other hand is a significant evidence of quality system efficiency.

The presented list of the indicators is incomplete naturally. But whatever indicator is used for the purpose of evaluation of quality system efficiency we must remember that an essential aim of these activities is to recognise trends of the indicator’s development so that the management might make a correct decisions.

The reporting about these trends ought to be a standard procedure within so called management review. The indicators described above could contribute to the quality improvement of this kind of review I hope.

HAYES,B.E. (1998): Measuring Customer Satisfaction. ASQ Quality Press. Milwaukee. 278 p.

CAMPANELLA,J. (1999): Principles of Quality Costs. Principles, Implementation and Use. Third Edition. ASQ Quality Press. Milwaukee. 219 p.

Autor: Prof. Ing. Jaroslav Nenadál, CSc. Vedúci katedry Kontroly a řízení jakosti VŠB TU Ostrava, Česká republika jaroslav.nenadal@vsb.cz