Quality Control KPIs in Manufacturing

As the saying goes, you can’t improve what you don’t measure.

This is the idea behind all process excellence frameworks from Lean to Six Sigma, DMAIC to ISO 9000.

In manufacturing, tracking quality control key performance indicators (KPIs) or performance metrics is central to the driving goal of quality management: minimizing defects and meeting customer expectations.

In this guide, we cover:

• The benefits of tracking quality control KPIs in manufacturing processes
• The difference between quality assurance and quality control, and why it matters
• Examples of quality control KPIs
• How process audits help improve your most important quality KPIs

Learn more about how to reduce the cost of poor quality with our free eBook on Cost of Poor Quality: The Hidden Truth About Your Ultimate Quality Metric.

The Importance of Quality KPIs in Manufacturing

Measuring quality KPIs in manufacturing is central to driving continuous improvement. KPIs provide actionable insights into the production process that help manufacturers to:

• Track performance against targets
• Uncover process issues and bottlenecks
• Identify problems early and determine appropriate corrective actions
• Improve customer satisfaction

Continuous monitoring of quality control KPIs helps ensure products meet standards and customer expectations. They provide crucial information on the process quality, production output quality, and the customer experience. By tracking these quality metrics in manufacturing, teams can reduce complaints, recalls and quality costs while increasing profitability.

More broadly, quality control KPIs in manufacturing align teams around shared goals and benchmarks. The idea is that when everyone on your team understands the key metrics of success, you get better collaboration and a culture of quality.

Quality Assurance vs. Quality Control

Many people use the terms quality control and quality assurance interchangeably. In reality, the two terms have different meanings and cover different (but often related) activities. Later in this article, we’ll discuss quality assurance KPIs in manufacturing, so before we jump into quality control KPIs, it’s important to understand the difference.

ISO 9000 treats quality control and quality assurance as related but distinct parts of quality management, both operating within the broader quality system.

Quality Assurance Definition

The American Society for Quality (ASQ) defines quality assurance as “all the planned and systematic activities implemented within the quality system that can be demonstrated to provide confidence that a product or service will fulfill requirements for quality.”

The key is that quality assurance builds confidence that the system will meet quality requirements, both internally for the company and externally for customers, regulators, and auditors.

Quality Control Definition

Conversely, ASQ defines quality control as “the operational techniques and activities used to fulfill requirements for quality.”

An illustrative example is comparing auditing (a quality assurance technique) with inspection (a quality control technique). Quality inspection examines finished-product characteristics to determine whether they meet specifications and requirements. Audits, on the other hand, look upstream at process inputs such as operator behavior, machine settings, and 5S compliance to verify that conditions support a high-quality output.

Examples of Quality Control KPIs in Manufacturing

Manufacturers use a vast array of quality control KPIs that can be unique to their industry, product, or process. However, all of these metrics in manufacturing reflect a single underlying goal: producing fewer bad parts.

With that in mind, we start below by examining some examples of defect and scrap metrics. These numbers, in turn, have a corresponding impact on other types of KPIs, such as:

• Productivity and efficiency metrics: When you produce fewer bad parts, productivity and efficiency both go up.
• Customer satisfaction metrics: When you ship more good parts, customer satisfaction also increases.
• Cost of quality: Reducing material waste and the time and effort needed to address problems helps reduce the cost of quality.

Defect and Scrap Metrics

There are many ways to measure how many bad parts come out of your plant, and each site may define them a little differently based on its unique needs and processes.

KPI	Definition
Scrap rate	The percentage of materials that must be discarded because they are defective or unusable
First pass yield	Also called throughput yield. Percentage of parts that meet inspection the first time without needing rework.
Rejection rate	The percentage of products rejected upon inspection due to product defects
Nonconformities	The total count of instances where quality standards weren’t met, including open/unresolved cases
Parts per million (PPM) or defects per million (DPM)	Internal measure of the number of defects expected in a sample of one million units, projected out from a smaller sample set
Customer complaints	The number of complaints received from customers related to product quality issues
Warranty costs	Total expenses to repair or replace defective products that are under warranty
Defects fixed per day	Number of defects corrected in a day—a measure of resolution speed, distinct from how many defects exist

Supplier Quality Metrics

Supplier quality plays a major role in end-product quality and customer satisfaction. Customers will hold you accountable for defective products, whether or not the problem originated in your plant.

Supplier quality metrics to monitor align closely with defect and scrap KPIs:

• Supplier defect rate
• PPM
• Non-conformance reports (NCRs)
• Number of supplier corrective action requests (SCARs)
• Average time to SCAR closure
• CoPQ from supplier
• Warranty claims due to supplier-related defects
• FPY of supplier parts
• On-time delivery
• Supplier lead time

Productivity and Efficiency Metrics

Quality teams often track KPIs related to productivity and efficiency, but many of these correlate with defect rates. Scrapping or reworking a batch creates waste that eats into productivity, efficiency, and profitability across manufacturing operations.

KPI	Definition
Overall equipment effectiveness (OEE)	A measure of how well a machine performs compared to its capacity, based on availability, performance and quality rate
Manufacturing cycle time	The total time it takes to manufacture one unit
Capacity utilization rate	Also called operating rate, this measures a plant’s output relative to its potential
Labor utilization rate	How efficiently a plant uses its workforce for production. Labor utilization rate is calculated by dividing total productive hours by total hours worked.
Lead time	The time it takes to fill customer orders
Takt time	The rate at which you must produce parts to meet customer needs

Customer Satisfaction Metrics

Quality management aims to meet customers’ needs and expectations. Thus, metrics that view quality from the customer’s perspective are critical for quality measurement and determining the effectiveness of quality control.

Many of these directly correlate with defects, underscoring that reducing defects is the fundamental purpose of quality control.

Customer satisfaction metrics that quality teams may track include:

• Customer satisfaction scores: How customers rate your products
• Perfect order fulfillment rate: Percentage of orders that customers receive without incidents.
• On-time delivery rate: Percentage of orders that customers receive on time

Cost of Quality

Most companies do not fully understand their quality costs. That said, quality costs—driven by process variation and defects—directly affect the bottom line.

Cost of quality can be broken down into two main categories:

1. Cost of poor quality (CoPQ), which includes internal and external failure costs
2. Cost of good quality (CoGQ), which includes prevention (a quality assurance activity) and appraisal or inspection.

As defects go up, so do CoPQ and appraisal costs. As defects go down, quality costs also drop because scrap rates, material costs, and warranty costs decrease.

Leading Metrics vs. Lagging Metrics

Any discussion of quality control and quality assurance KPIs in manufacturing must necessarily explore the difference and importance of using leading versus lagging metrics.

The difference is meaningful: Lagging metrics focus on past performance, whereas leading metrics correlate with changes in lagging metrics.

Examples of lagging metrics include output measures like defect rates, scrap, and customer complaints. In your plant, you might observe that increasing the volume of plant floor audits correlates with fewer defects.

Thus, tracking the number of monthly audits as a leading indicator of defects lets you step in and make corrections when your monthly audit volume declines, before it leads to more defects and complaints.

Quality Assurance KPIs in Manufacturing

Where many quality control KPIs are lagging metrics, quality assurance KPIs are often leading indicators of quality performance. So while quality control metrics like scrap, OEE, and quality costs often take priority, tracking quality assurance KPIs is also vital to maximizing the impact of quality efforts.

Recall the definition of quality assurance, which focuses on providing confidence that the system is built to deliver high-quality products that will meet requirements consistently. This is proactive because it focuses on activities and controls that prevent problems, such as employee training, plant floor audits, and corrective action systems.

Quality assurance KPIs also help gauge the overall effectiveness of the quality system, looking at items such as:

• Audit metrics: When conducting plant floor process audits, you might look at metrics like audit completion rate and process non-conformances by failure type or work area. Tracking the number of 5S audit findings is another example of how audit metrics can point to where you are most likely to have quality issues.
• Corrective action metrics: KPIs such as the number of open corrective action requests or the number of corrective actions over 45 days old can show how efficiently you’re solving problems.
• Employee training metrics: KPIs like average training hours completed or the number of overdue training modules per employee can reveal potential workforce training gaps.
• Cost of Good Quality (CoGQ): How much are you spending on things like quality planning, quality software, plant floor audits, and error-proofing? Tracking expenses associated with the cost of good quality (CoGQ) can tell you whether you’re underinvested in quality and thus likely to face quality issues in the future.

Using a Quality Management System (QMS) to Monitor and Improve KPIs

ISO 9001 for quality management systems strongly emphasizes performance evaluation (Clause 9) and improvement (Clause 10). Manufacturers that certify to this widely recognized standard are required to collect and analyze data to evaluate elements such as:

• Conformity of products
• Customer satisfaction
• QMS effectiveness
• Supplier performance

Automated quality management system (QMS) tools play a major role in digital transformation in manufacturing organizations today. Some companies use an enterprise QMS that integrates multiple tools such as document management, employee training, audits, and corrective action.

Others may use point solutions that provide deep functionality in a specific area according to their specific requirements, such as on-the-job training capabilities, regulatory tracking, or specialized audit solutions. Companies may link these solutions to each other, to an enterprise QMS and/or business systems like ERP and MES using application programming interfaces (APIs).

Using Layered Process Audits to Drive KPI Improvement

Most quality control KPIs in manufacturing focus on one thing: reducing defective parts. Whether it’s metrics like scrap rate and customer complaints or productivity and efficiency measures like OEE, all are closely tied to defect rates.

Layered process audits are a high-frequency auditing method used in industries like automotive, aerospace, and more as a focused approach to reducing variation that leads to defects. What makes layered process audits powerful is that they:

• Take place daily or every shift to more proactively catch issues and build reliability into the system
• Involve multiple levels of management who bring fresh eyes to the process
• Focus on upstream process inputs such as the 6Ms to ensure that the process meets standards and thus will result in a high-quality product

Layered process audits are a cost-effective tool for driving change in quality control KPIs because they focus on reducing variation in process inputs. That, in turn, helps improve scrap-related metrics, whether it’s reducing internal PPM or increasing first-pass yield.

The Secret Ingredient in LPA Success

Of course, managing daily or shift-level audits involves a lot of administrative time if you’re using pen and paper or spreadsheets. Companies that are most successful with layered process audits are those that leverage plant floor audit software to minimize this administrative burden with tools like:

• Automated scheduling and reminders to boost audit compliance
• Dynamic question libraries to rotate and randomize audit questions without having to create, print, and distribute new checklists
• Real-time reporting showing process failures by department
• Closed-loop issue tracking to monitor the resolution of problems identified on the plant floor

Simplifying the administrative side of these audits lets you focus on what the data is telling you, rather than collecting, entering, and processing it.

How Quality Assurance and Quality Control KPIs Work Together: A Success Story

A Fortune 500 automotive supplier conducting LPAs in a windshield wiper plant faced complaints about parts breaking down in the field. The company had previously used LPA software but ran into scheduling and reporting issues, so they fell back on spreadsheets to manage their LPA process.

Because spreadsheets made frequent audits difficult to manage, they decided to implement EASE plant floor audit software. Making the switch allowed them to:

• Schedule and track roughly 500 audits each month for a team of 80
• Verify that new steps added to the process were being followed on a daily basis
• Include visual standards in audit questions to clarify what conforming parts look like

By increasing the volume of process audits, the manufacturer eliminated recurrence of the defect, delivering a full 50% reduction in quality costs.

In a world where customers expect zero defects, effectively tracking and improving on quality control KPIs can give manufacturers an edge over the competition. While companies track an endless proliferation of metrics, they all align with quality control’s central goal: reducing defects.

Reaching this goal requires intense focus on process failures, which drive a large share of defects, complaints, and costs. Automated QMS tools, such as plant floor audit software, offer a key advantage by eliminating inefficiencies in manual quality processes. In doing so, companies can improve productivity while reducing defects, improving customer satisfaction, and strengthening the bottom line.

Frequently Asked Questions About Quality KPIs in Manufacturing

What are quality KPIs in manufacturing?

Quality KPIs in manufacturing are measurable indicators used to evaluate how effectively a manufacturing process is producing products that meet required quality standards. Common examples include scrap rate, first pass yield, rejection rate, nonconformities, customer complaints, and warranty costs.

The right quality KPIs depend on your products, processes, customers, and business goals. Tracking a focused set of quality metrics in manufacturing can help teams identify problems earlier, reduce waste, and make more informed decisions about quality improvements.

What are the most important manufacturing quality KPIs?

The most important manufacturing quality KPIs will vary by company and process, but several metrics are widely useful. These include first pass yield, scrap rate, rejection rate, nonconformities, defects per million opportunities, customer complaints, and warranty costs.

It can also be useful to track leading indicators, such as audit completion and corrective action performance, alongside lagging indicators such as defects and customer complaints. Looking at both gives teams a better understanding of what is happening and why.

How do you choose the right quality KPIs?

Choosing the right quality KPIs starts with identifying the quality outcomes that matter most to your customers and manufacturing operations. From there, select metrics that help you understand whether your processes are consistently achieving those outcomes.

Avoid tracking every available metric simply because the data exists. Fewer relevant KPIs can provide clearer insight than a long list of measurements teams rarely act on. Also balance leading and lagging indicators so you can identify potential problems before they result in defects.

What is the difference between leading and lagging quality metrics?

Leading quality metrics measure activities or conditions that can influence future quality performance, while lagging metrics measure results that have already occurred.

For example, plant floor audit activity can act as a leading indicator, while scrap rates, defect rates, and customer complaints are typically lagging indicators. Using both types of metrics and KPIs helps manufacturers understand current performance and identify opportunities to prevent future quality problems.

How does quality inspection affect manufacturing KPIs?

Quality inspection helps identify whether products and processes meet defined specifications and requirements. Inspection results can feed directly into KPIs such as rejection rate, first pass yield, nonconformities, and defect rates.

However, inspection alone does not prevent defects. Manufacturers can get greater value from inspection data by looking upstream at the process conditions that contribute to failures. This can help quality teams move from simply identifying problems to preventing them.

How can quality KPIs improve manufacturing operations?

Well-chosen KPIs give teams visibility into where processes perform well and where problems occur. For example, an increase in scrap or rejection rates may highlight a process issue that needs investigation, while declining first pass yield can indicate that more products require rework.

By using these measurements to guide corrective actions and process improvements, manufacturers can reduce waste, improve efficiency, and strengthen overall quality. This is where quality’s impact extends beyond the quality department to productivity, costs, customer satisfaction, and profitability.

Should quality KPIs be tracked in a quality dashboard?

A quality dashboard makes it easier for teams to see key quality information in one place and spot trends that might otherwise be hard to notice.

The most useful dashboards focus on a manageable set of relevant KPIs and make the information easy to understand and act on. Depending on the manufacturing environment, a dashboard might include defect rates, scrap, first pass yield, audit results, corrective actions, customer complaints, and other key measures.

How often should manufacturing quality KPIs be reviewed?

The appropriate review frequency depends on the KPI and how quickly the underlying process can change. Some metrics may be monitored in real time or reviewed daily, while others may be more useful as weekly or monthly trends.

For example, frequent monitoring of process or audit data can help teams identify issues quickly, while customer complaints and warranty costs may be more meaningful when reviewed over longer periods. The goal is to review each KPI often enough to take action before problems become more costly.

Why are quality metrics important for manufacturing companies?

For manufacturing companies, quality metrics provide an objective way to assess whether products and processes meet expectations. Without measurement, it can be difficult to determine whether quality is improving, where defects originate, or whether corrective actions are working.

Effective quality measurement can also reveal the relationship between quality and other performance areas. Reducing defects can lower scrap and rework, improve productivity, reduce quality costs, and ultimately improve customer satisfaction.

How can manufacturers turn quality KPI data into quality improvements?

A KPI’s value comes from what teams do with the information. When a metric shows a deterioration in performance, teams can investigate the underlying process, identify potential causes, take corrective action, and then continue monitoring the KPI to determine whether the action worked.

For example, if rejection rates increase, a manufacturer might use inspection and audit data to identify where the process is deviating from its required standard. Addressing the underlying cause rather than simply sorting defective products can lead to lasting quality improvements.