What are quality indicators and which ones should you use in your business?

Quality indicators are tools used to measure and track a company’s performance, and they are among the main types of process performanceopens in a new tab indicatorsopens in a new tab, the well-known KPIs (Key Performance Indicators).

In the management process, they are a manager’s best companions, because they measure the difference between the intended situation (the goal) and the current situation (the result).

They point the way and are an indispensable reference.

Quality indicators can be diverse, and their function is to measure the final result against standards set in advance by the company and its customers.

Example: a company delivered 100% of its orders on time. That is a quality indicator.

Tracking indicators is essential to the success of any company, and tracking is much more efficient when done in an optimized system. So check out: 9 best tools for analyzing indicators and results

When using quality indicators, it is extremely important to regularly access accurate, reliable and good-quality data.

Below, we present the quality indicators that fit your business as it grows.

Siteware prepared a complete, 100% free spreadsheet for you to track indicators. In it, you can track your quality indicators. Download it now:

What are quality indicators?

Quality indicators show whether products or services are being delivered with nonconformities, defects or breaches of the established procedures. They also show whether, even within those acceptable limits, the products and services are meeting customers’ needs and wants, and whether they manage to exceed their expectations.

Watch this video (in Portuguese) to understand better:

What are quality indicators for?

Quality indicators give the company a more realistic and comprehensive view of the results coming from the processes it uses. This makes it possible to identify patterns, problems and even strengths of the business.

With this information, you can make decisions to improve the quality of your products and services in a way that is better balanced with costs and investments. That means you can invest the company’s resources more wisely.

That said, quality indicators need to be defined according to the particularities of your business. To do that, you need to review your strategic planning, where you will find your objectives, values and goals.

Also read: Decision-making tools: how do you choose the right one for your business?opens in a new tab

Why are quality indicators important?

The main importance of quality indicators is that they contribute to a better relationship with the customer and, as a result, to the value of your brand, since quality aims to exceed consumers’ expectations.

In addition, indicators give you more control over business processes and support decision-making. They also provide information to evaluate employee performance and help identify problems.

Another point worth highlighting is that they help feed the continuous improvement of the brand and of the company’s processes, and you can direct and manage investments better.

What are the advantages of quality indicators?

The main advantage of quality indicators is that they let you continuously improve your processes and products. This brings more satisfaction to your customer and, as a result, more profit to your business.

We can also highlight many other benefits that quality indicators bring to your company:

• Produce improvements;
• Plan appropriately;
• Obtain information that supports decision-making;
• React quickly to critical situations;
• Make better use of resources;
• Improve the quality of the service provided;
• Keep quality under control.

Which quality indicators are there?

After so many benefits, you must be curious to see some types and examples of quality indicators. Here are the 5 main quality indicators:

• Efficiency Indicator;
• Effectiveness Indicator;
• Impact Indicator;
• Service Indicator;
• Safety Indicator.

1. Efficiency and Productivity Indicator

It measures how many resources are needed to carry out production.

With this diagnosis, you can identify waste to avoid and gain productivity.

It is important to know how many times something has to be redone or a resource used during a process, for example. This directly affects budget revisions and delivery schedules.

How do you calculate it? By adopting production management software (with modules for raw material purchasing, costs, delivery time and so on). With this data, you can set up a continuous improvement process in the company, for example.

Learn more: Learn how to use OEE indicators in your industryopens in a new tab

This video can also help you (in Portuguese):

2. Effectiveness, Customer Satisfaction and Loyalty Indicator

Running a survey to find out whether the customer is satisfied, would buy again and would recommend your service is essential to the success of your business.

These are some of the most important quality and productivity performance indicators.

How do you calculate it? Going straight to the source is ideal.

Run a good survey with your customers to study the strength of your product or service in the market.

The most recommended approach is to send a satisfaction survey by email (quick, objective and concise), or to use automated survey platforms that do this with the NPS methodology, for example.

See more: 3 examples of efficiency and effectiveness indicators to optimize the use of your resources

3. Impact and Value Indicator

How do you know whether your product or service really works? This indicator helps you understand the influence and relevance of what you offer in your customers’ routines.

How do you calculate it? Satisfaction surveys and market research are good options for defining indicators. Keep an eye on news in your field and on your competitors.

4. Service and Customer Complaints Indicator

Customers are the thermometer of the business. If they are complaining a lot, it is a sign that things are not going well. That is why quality and productivity performance indicators are essential for keeping control of your internal organization.

Why?

Because it shows on the outside.

Check whether the company’s “gears” are working properly, whether employees are carrying out their tasks successfully and working hard to provide the best service.

How do you calculate it? Pay attention to after-sales.

Build a friendly relationship and care about your customer even after the deal is closed.

That way, you will earn their loyalty and your company will have a good reputation in the market.

Another important point, increasingly discussed, is customer experience.

You need to know the behavior of the consumer or customer to create a memorable experience for them. This has become a priority because the happier your customer is with the brand, the more loyal they will be.

5. Safety and Quality Indicator

This quality performance indicator is essential to avoid harming the customer’s health or physical integrity.

How do you calculate it? Run tests before launching the product.

Check that it meets every safety measure and the requirements of national and international certifications and standards. You also need a privacy policy that sets out all the rules for handling customer data.

Now that you know a little more about which quality indicators exist, how about starting to use them to make sure your company always stays on the right path?

Check out other articles on our blog that can help you a lot:

• What are the quality indicators you should use in your business?opens in a new tab
• How to implement a quality system in organizations

How do you use quality indicators in your company?

To use quality indicators in your business, you first need to set an objective and a strategic plan based on the improvements you intend to achieve. Then you need to apply the five indicators mentioned above.

It is worth saying, however, that two elements are essential for the company to truly delight consumers: good service and the quality of the product being delivered. That is why, after implementation, it is essential to follow up on these indicators.

You will need to train employees so they can evaluate each of these indicators, knowing what they are meant to show, and in this way promote continuous improvement in the business environment.

How do you create a quality indicator?

Now that you know some of the most popular quality indicators on the market, you should know how to create one. This process should be carried out by a specialist in the field who understands the processes and has enough experience to outline an optimized strategy.

It is also essential to understand that there is no standard for creating or tracking indicators: everything depends on the reality and context of your company.

• Siteware helps you create and consolidate all your indicators in one place, along with several tools that bring the end of spreadsheets and many other advantages. Find out how by clicking here!opens in a new tab

Here is the step-by-step process for creating a quality indicator:

1. Define the company’s objectives

Every indicator should be created with a final objective in mind, which can be described in the company’s Balanced Scorecardopens in a new tab. So, to create a quality indicator, you need to define those purposes.

Understand that a strategy is simply the means by which a company intends to reach its objectives. So, without a defined objective there is no strategy, and quality cannot be measured.

2. Define the metrics to be analyzed

Once a broad objective is defined, managers can define the metrics to analyze. For example, if the strategic objectiveopens in a new tab is to cut the company’s costs, the metric used is spending in different areas of the organization.

Choosing the right metrics is essential for the company to reach the objectives it set. That is why it is very important to evaluate what information will be extracted from a given metric.

3. Establish how data will be collected

In the example above, the indicators created will relate to spending in different areas of the company. To feed that chart, you need to establish how and how often data will be collected. Here, you need to define who is responsible for providing the necessary numbers and who will review that data.

4. Have well-defined goals for each indicator

After completing all the previous steps, all that is left is to set goals for each indicator. Going back to the proposed scenario, if the objective is to reduce the company’s costs, a spending cap should be set for each area.

Here it is important not to confuse smaller goals with objectives. They are complementary, but they are not the same. The objective is where the company wants to get to, say, the top of a staircase. The goals are each of the steps you need to climb to reach the objective.

If you need to quickly build a quality performance indicator dashboard, your problems are over!

• Siteware prepared an exclusive e-book on “How to create your performance indicator dashboard in 3 days”opens in a new tab

EXTRA TIP: FTQ quality

It is very important to know which quality indicators exist. That is why we are bringing you one more.

FTQ stands for First Time Quality. It is the percentage of parts produced without nonconformities right at the start of production.

Now that you know the types of quality and productivity indicators, see more tips on how to implement a quality system in your company and on how to create quality indicators (in Portuguese):

With Stratwsopens in a new tab you can create, track and share quality performance KPIs (and many others) much more easily.

See more advantages of Stratws:

• Integrate people, operations and strategy;
• Find improvement opportunities;
• Manage meetings and the project portfolio;
• Increase productivity;
• Share KPIs quickly and transparently;
• Strengthen corporate governance;
• Manage risks and analyze scenarios.

And if you want to use KPIs in your business the right way, download our free e-book: How to use KPIs to track results and engage your team?opens in a new tab

Frequently asked questions

What are quality indicators?+−

Quality indicators are metrics used to measure and track the quality performance of a company's products, services and processes. They show whether there are nonconformities, defects or breaches of procedures, and also whether, within acceptable limits, the delivery is meeting or exceeding customers' expectations.

How do quality indicators relate to KPIs?+−

Quality indicators are a type of performance indicator (KPI) focused specifically on quality. They compare the current situation with the desired goal and help the manager understand the gap between the intended result and the actual result, serving as a reference for decisions and for prioritizing actions.

Why are quality indicators important for the company?+−

they give more control over processes;they support decision-making;they help evaluate employee performance;and they feed the culture of continuous improvement in the organization.