If you want to improve the quality of your output, it’s important to “speak with data and manage with facts.” The key to improvement is setting benchmarks and obtaining actionable data that point you to the issues you need to focus on. This is where quality metrics come in.

Here are the top 5 quality metrics to track:

1. First Pass Yield

First pass yield (FPY), also known as throughput yield (TPY), is an indicator of a line’s production and quality performance. FPY is calculated by dividing the number of “good” units without rework or scrap defects exiting a process by the number of units entering the same process over a set time period.

First Pass Yield (FPY) = Quality Units/Total Units Produced

Manufacturers should strive for a high and consistent FPY, which indicates that processes and equipment are reliable and scrap and rework costs are relatively low. First pass yield can be calculated manually, or tracked with real-time production data with a digital FPY app.

Tulip First Pass Yield app
Tulip's First Pass Yield app

2. Scrap rate

Scrap rate is “the percentage of materials sent to production that never become part of finished products.”

In general, scrap rate can be calculated as follows:

Scrap rate = total scrap/total product run

The types of scrap included in the calculation may vary by company.

3. Supplier defect rate

Supplier defect rate is the percentage of materials from suppliers that don’t meet quality specifications. The quality of materials from suppliers can have a huge impact on quality costs. It’s also important to track the incoming supplier quality, or the percentage of materials received that meet quality requirements. Also, supplier chargebacks, or the total cost charged to suppliers for materials that don’t meet quality standards.

Supplier defect rate = % defective materials
Incoming supplier quality = % materials that meet quality requirements
Supplier chargebacks = total cost charged to suppliers for materials that don’t meet quality standards

This quality metric is important for understanding quality throughout the entire value stream.

4. Cost of Quality

Cost of quality is a metric that quantifies the total cost of quality-related efforts. This quality metric classifies quality-related costs and allows management and quality practitioners to evaluate investments in quality based on different cost areas. Cost areas include:

Costs of control

  • Prevention costs, which result from efforts to prevent defects from occurring
  • Appraisal costs, which result from detecting defects via inspection, testing, and audit

Costs of failure of control

  • Internal failure costs, which result from defects caught internally and discarded or repaired
  • External failure costs, which result from defects that actually reach customers.

Measuring cost of quality helps an organization determine the potential savings from implementing process improvements.

5. Return Material Authorizations (RMAs) and Returns

A return material authorization (RMA), also known as a return authorization (RA) or return goods authorization (RGA), is a part of the process of returning a product to receive a refund, replacement, or repair. RMAs can be issued for a wide variety of reasons, and they are a direct measure of a product’s quality and nonconformance to consumers’ requirements.

It’s a good idea to analyze the reasons customers are returning goods. Doing a Pareto analysis of the top 20% of factors that drive 80% of returns can help identify the root causes of the quality issues.

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