SCMH (www.iaqg.org/scmh) Section 7.11.

2 Metrics and KPI Definitions Rev: A Dated: 30 August 2018

Key Performance Indicator

KPI Description What the KPI Measures Remarks
Indicator (KPI) Expressed in;
1. Customer Metrics
Item Escape Rate (IER) Number of non-conforming items under Number of items delivered to the customer and subsequently identified by this customer as not Parts per million See SCMH section 5.1.2 . 'Delivery Metrics Definition
company liability vs.. Number of items compliant to the applicable definition or specfication. It excludes non conformities that are not (PPM) or % Guidance'.
delivered by the company during the period. under liability of the organization (e.g. parts damaged by the customer during installation).

Defects per Unit (DPU Number of system defects, under company Number of sytem defects, anomalies or non-conformities detected on a delivered sytem or Unit per system or See SCMH section 5.1.2 . 'Delivery Metrics Definition
liability vs.. Number of systems delivered by assembly by the customer to whom it was delivered. It excludes defects or non conformities that assembly Guidance'.
the company during the period. are not under liability of the organization (e.g. systems or assemblies damaged by the customer
during installation, parts removed with no defect fault because of incorrect trouble shooting by
the customer, etc.).
Concession Rate (CR) Number of concessed items delivered vs.. Number of items delivered by the organization to its customer covered by a concession accepted PPM, % or Unit See SCMH section 5.1.2 . 'Delivery Metrics Definition
or Concession Number Number of items delivered by the company by the customer vs. total Number of items delivered by the company to its customer during the Guidance'.
(CN) during the period. period.
May also be the total number of items delivered by the organization to its customer covered by
a concession accepted by the customer during the period.

Concession per System Number of concessions raised on systems Number of concessions accepted by the customer on systems (or assemblies) delivered by the Unit See SCMH section 5.1.2 . 'Delivery Metrics Definition
(CPS) (or assemblies) vs. Number of systems or organization divided by the number of systems (or assemblies) delivered by the organization to Guidance'.
assemblies delivered by the company during this customer during the period.
the period.

On Time Delivery to On Time Delivery punctuality level of items On Time Delivery (OTD): Number of Purchase Order lines/items delivered on time in the period % Note: Transportation is to be taken into account according
Customer deliveries (at the customer) by the company vs. Number of Purchase Order lines/items due in the period. to the PO clauses. That means: “Departure date” +
“transportation duration” ≤ “Supplier Promised Date”.
Parameters may vary from one customer to another (e.g.
counting working days or calendar days, on time = -5
days/+2 days, or = -3 days, +0 day).
See SCMH section 5.1.2 . 'Delivery Metrics Definition
Guidance'.

Customer Delivery Delay Average): Delay Average or Delivery Variance (DV): Cumulative number of days for all late deliveries in the Unit (days) See SCMH section 5.1.2 . 'Delivery Metrics Definition
Delay Average degree of performance related to the late period vs.number of late deliveries in the period. Guidance'.
delivered items (at the supplier)
2. Engineering and
Product Development
Quality of Engineering Reworks on engineering drawings, Measures the corrections that are requested internally (by Design Engineering, Manufacturing count or % Depending of the nature and the complexity of the
Release (Design Right Number of published drawings which Engineering) after the design deliverable has been released and the design activity (tool/process) drawings, it might be either the number of drawings that
First Time) require a rework for correction. failed to prevent the error. have required a modification or the number of corrections
Out of scope: required in one or several drawings.
- Drawing changes due to new customer demand What is exactly measured and scope of study (all product
- Improvement requests life cycle, during development only, origin of the issue
detection -internal, by the customer…) must be clearly
defined as targets and possible actions might differ
depending on the context.

Engineering Escapes A measure of missed execution to the An Engineering or Design escape occurs when components, products, or other deliverable count or % per This is a Pareto analysis of products nonconformity having
design requirement or lack of knowledge products or services do not meet technical specifications or technical designated frequency their origin in engineering process weaknesses.
and capability to meet the design requirements/expectations, as identifed by the producer or customer and root cause determines for a program or
requirement. the event is a result of: project Scope of study must be defined (all product life cycle,
- a noncompliance to standard work in place at the time the hardware was designed or service during development only, after delivery only …).
was provided, and/or
- a failure to meet reasonable engineering design practices at the time the hardware was
designed or service was provided.

On Time Internal It is a measure of the adherence to the Schedule Performance Index - Actual release date relative to planned release. Non-dimensional ratio
Engineering Release release requirements as developed in the or percentage
original Product Development Plan.

Engineering Capacity A measure of the business' engineering Estimate resource needs based on complexity scale. % of Headcount in Total needs to include customer demand + internal needs.
(need vs. available capacity (engineering man-hours to meet Measure estimated resource needs versus actual. FTEs (Full Time
resources + forecast) customer "demand"). Equivalents) or hours
vs. total need
Classification of Measures the basic nature/reason of 1. Product/Component Performance Improvement: Modification or iteration of products or Count per designated This is an analysis pareto of design change categories.
Changes engineering design/product definition services made to improve performance. These modifications may be internally or externally frequency by
changes. driven and are not the result of an engineering customer escape. nature/reason
2. Administrative changes - any update or correction that does not affect engineering or design category or %
intent (form, fit, function).
3. Major change (design correction) - a change to engineering or design intent (form, fit,
function) that also affects downstream customer usage, tracking, or other requirements.
4. Minor change (design correction) - a change to engineering or design intent (form, fit,
function) that does not affect downstream customer usage, tracking, or other requirements.
5. Others, as applicable to business
Note: Classifications 2 to 4 may be the result of an engineering or design customer escape.

Design Changes Number of design changes completed per Measures the quantity of engineering design/product definition changes. Depending on the Count of total changes Count per designated frequency for a program or project
Completed month or year. nature of the business it may be more suitable to measure by program or product family. over the prescribed Note: This KPI can also be measured in term of design
period of time changes completed vs. design changes opened.

Design Changes Number of requests for design changes per Measures the quantity of requested engineering design/product definition changes. Depending Count of total Count per designated frequency for a program or project.
Requested month or year. on the nature of the business it may be more suitable to measure by program or product family. requested changes
over the prescribed
period of time

Design Change Cycle Engineering cycle time for implementing Engineering Cycle and lead-time to execute design changes to correct an issue. Time (days, weeks, Summation of time spent by engineering labor obtaining
Time design change to correct an issue. months…) development hardware and running tests.

Design Quality at Number of design issues raised during a Measure of design quality at a specific design review. Count per designated Review outcomes: Count design issues & track reasons or
Design Review design review that require engineering Exact scope (customer review and/or internal peer review) must be defined as objectives and frequency for a classification of issues (missed requirements, criticality of
action. targets are different. program or project missed or poor execution, results of risk assessments
(severity/impact, likelihood of occurrence, detectability),
other impact to program milestones, etc.).
Engineering Cost of Cost of Poor/Non-Quality Engineering post certification (or post qualification as applicable) non-recurring costs to fix Summation of costs of
Poor/Non-Quality internal or external escapes. engineering labor,
development
hardware and tests

Technology Readiness Technology Readiness Level (TRL) at a An attribute scale to show technology capabilities relative to application in full-scale product numerical value (1 - 9)
Level (TRL) specific design review. design and development activities.

TRL Adherence TRL adherence Measure the TRL achieved vs. the TRL required at specific milestone for a specific program. % or average delay

Manufacturing Manufacturing Readiness Level (MRL) at a An attribute scale to show manufacturing capabilities relative to application in full-scale product numerical value (1 - 9)
Readiness Level (MRL) specific Manufacturing Review during design and development activities.
product development.

MRL Adherence MRL adherence Measure the MRL achieved vs. the MRL required at specific milestone for a specific program. % or average delay

Qualification Tests Qualification tests success rate Measure the Right First Time rate of qualification tests for a new product to prove compliance of %
Success Rate the manufactured products with their design specifications.

3. Program
Management
Adherence to Program Adherence of program gates versus Program Measure the number of program milestones successfully passed on time. Unit or %
Gates planning.

Program NRC Follow Measure of Non Recurring Costs of a Measure the Non Recurring Costs vs.. program target. % This kind of KPI remains internal.
Up dedicated program. This is generally measured at some specific program milestones.

Program RC Follow Up Measure of Recurring Costs of a dedicated Measure the Recurring Costs vs.. program target. % This kind of KPI remains internal.
program. This may be done at the end of a program or at specific program milestones to regularly verify
Reccurring Costs evolution versus time

4. Manufacturing and
Production
A selection of the KPIs below should be deployed at several steps of each manufacturing process (e.g. first, middle and final steps). The use of the KPIs will allow for the detection of possible issues as soon as they occur in order to anticipate
mitigation and improvement actions and reduce the probability of poor On TIme On Quality performance originated in production.

First Pass Yield on Number of units coming out of a process Measures the ability of a process to produce first time right. % First pass yield is only used for an individual sub-process.
Production Operations divided by the number of units going into
or Top Level Testing that process over a specified period of time.
Only good units with no rework or scrap are
counted as coming out of an individual
process.

FAI Success Rate Number of FAI (First Article Inspection) Measure the number of FAI passed first time versus number of FAI performed. %
passed first time.

FAI Accuracy Number of errors during FAI (First Article Measure the number of errors, their type and severety (pareto) that have been detected during count or %
Inspection) review. an FAI review.

Inventory Accuracy Ratio between the actual count of items in Measures the accuracy of an inventory by taking a actual count of items in stock, and comparing %
stock divided by theoretical stock. it to what is recorded in the database.

Staffing Levels Ratio between the work load and the Measure the number of working hours required to perfom the job vs. the total number of % Measures the margin/criticality of the available resources.
capacity of existing work forces (personnel) available working hours (number of persons multiplied by number of working hours per person). Forecast can vary from weeks, months, years, … The horizon
for a work center (present and forecast). May be done for global activities and/or only for those requiring specific skills. should correspond to at least twice the time needed to
increase the capacity.

Internal & External Number of days needed to transport a Measures the lead-time between two consecutive steps or sum of all transporation times in a Days Days can be replaced by hours, weeks, …
Transportation Lead product from one location to the next one sequence of operations.
Time between 2 process steps or sum of all
transporation times in a sequence of
operations.

Internal & External Number of days needed to cover the Number of days needed to cover the complete step of an operation or sum of all times needed Days Days can be replaced by hours, weeks, …
Lead Time complete step of an operation or sum of all to perform a sequence of operations (including manufacturing, inspection, waiting time,
times needed to perform a sequence of bottlenecks, stops of production, shift change, etc.).
operations.
Buffer Stock Turn or Number of parts or products reserved to Number of finished parts/products currently produced and in stock (not yet used/sold) in Units or Ratio or Inventory will protect you against production delays and
Days of Buffer Stock safeguard against unforseen shortage or relation with the number of parts/products manufactured/needed during a period of time (or number of days quality issues but will increase your costs and risks of
demand (also called strategic stock). number of days needed to consum all parts/products currently produced and in stock with obsolescence.
current production rate). This data is available in the ERP and often through visual
management settings (e.g. kanban).

Inventory Turnover (or Cost of goods sold (net sales) divided by by Measures number of times a company's inventory is sold and replaced over a period of time Number of occurences Inventory includes all parts in process, in quarantine, ready
Days of Inventory) cost of the average inventory. (generally one year) or number of days required to consum your entire inventory. per year (or number or for dispatch or delivery, consigned at customer location, to
days, weeks, etc.) be scrapped or reworked, etc.
Inventory turnover measures how fast a company is
selling/using inventory.
The days in the period can then be divided by the inventory
turnover formula to calculate the days it takes to sell or use
the inventory on hand. It is calculated as sales divided by
average inventory.

Productivity Ratio between the amount of goods and Measures the amount of goods and services produced by one hour of labor. Unit/unit of time
services produced during a given time, and (hour, day, month,
the given time. etc)

Capacity Utilization Ratio between the productive time of a Ratio between the number of hours the machine or equipment is running to produce or test %
Rates machine or equipment and the total time. product in a day (or in a period) versus the total number of hours (24/365).

Machine or Equipment Ratio between the productive time of a Ratio between the number of hours the machine or equipment is running to produce or test % The machine or equipment utilization rate shall take into
Utilization Rates machine or equipment and the total product in a day (or in a period) versus the number of planned hours (taking into account account all planned activities (maintenance, calibration,
planned operational time. number of shifts per day and number of hours per shift). change of tooling, etc.).
This measure is often used as an input for Sales & Operation
Planning (S&OP) settings.
Unscheduled / Ratio between the down time resulting from Measures the impact of machine or equipment breakdown on production or testing capacity. %
Unplanned Machine or a machine or equipment breakdown or
Equipment unplanned maintenance versus the total
Maintenance planned operational time.
(breakdown) Ratio

Frequency of Number of machine or equipment Measures how often a machine or equipment encounters breakdown or requires unplanned Unit per unit of time This KPI can be part of a global TPM (Total Productive
Unscheduled / breakdowns or unplanned necessary maintenance. (hour, day, month, Maintenance) approach.
Unplanned Machine or maintenance over a period of time. etc)
Equipment
Maintenance
(breakdown)

OTD (On Time Number of items due and delivered on time Measures the percentage of items delivered on time. %
Delivery) in the period/Number of items due in the
period.

OTM (On Time Number of items manufactured on time in Measures the percentage of items manufactured on time. %
Manufacturing) the period/Number of items to be
manufactured in the period.

Manufacturing Actual production as a percentage of the The number of units that have been effectively produced or tested over a period of time versus % This KPI is another way to measure On-Time Manufacturing.
Schedule Adherence scheduled production. the total number of units that should have been produced or tested by a machine or production
line or inspection line over the period of time as per initial plan.

Unproduced Units per Number of items due and not produced Measures the quantity of items missed per schedule. Unit
Schedule during the planned period.

MFI (Manufacturing Number of times Production is stopped or Measures how often Production is stopped or interrupted due to missing or defective part, Unit Sometimes called 'Manufacturing Flow Inhibitor'.
Flow Interrupter) interrupted by a missing part or component component or material.
part or material.

Buffer Stock (parts) For a production step, Number of items Measures the stock, expressed in number of items available at a given time. unit The data is available the ERP and often also through visual
available and ready to be consumed or management setting (e.g. kanban).
processed in next manufacturing phase.

Buffer Stock (days) For a production step, Number of items Measures the stock, expressed in Days of items available. Days Depending on the context, days can be substituted by any
available and ready to be consumed or other timing unit (hour, week, …).
processed in next manufacturing phase The data is available in the ERP and often also through
divided by the Number of items processed visual management setting (e.g. kanban).
or consumed per day.

Backlog (parts) For a production step, Number of orders Measures the orders expressed in number of items that need to be processed at a given time. unit It can be measured either for the entire manufacturing cycle
that need to be processed at a given time. or for a specific plant, one or several specific families of
manufacturing activities (e.g. drilling, surface treatment,
machining, etc.), specific operations, manufacturing
equipement, etc.

Backlog (days) For a production step, Number of orders Measures the orders expressed in number of days of production, that need to be processed at a Days It can be measured either for the entire manufacturing cycle
that need to be processed at a given time given time to deliver the quantity expected/ordered by the customer. or for a specific plant, one or several specific families of
divided by the Number of items that can be manufacturing activities (e.g. drilling, surface treatment,,
processed per day. machining, etc.), specific operations, manufacturing
equipement, etc..
Depending on the context, days can be substituted by any
other timing unit (hour, week, …).

WIP (Work in Progress) For a manufacturing step (or combination of Measures the work in progress. Unit It can be measured either by item or by MO (manufacturing
several steps), Number of items being order), and either for the entire manufacturing cycle or for a
processed. specific plant, one or several specific families of
manufacturing activities (e.g. drilling, surface trearment,
machining, etc.), specific operations, manufacturing
equipement, etc.

Scrap Rate Number of scrapped items divided by the The scrap rate indicates the percentage of parts that were declared unsalvageable and scrapped % It can be measured either for the entire manufacturing cycle
number of items produced during a period (i.e. mutilated, disposed with treacebility or reclassified) because of non-conformities or defects or for a specific plant, one or several specific families of
of time. were produced during manufacturing cycle (or a specific manufacturing operation) and reworks manufacturing activities (e.g. drilling, surface trearment,
allowing to restaure conformity were not possible or would have been too costly considering the machining, etc.), specific operations, manufacturing
value of the parts. equipement, etc.

Rework Rate Number of items to be reworked divided by The rework rate indicates the percentage of parts that were reworked or re-processed to restore % It can be measured either for the entire manufacturing cycle
number of items manufactured in a period an acceptable condition after non-conformities or defects were produced during manufacturing or for a specific plant, one or several specific families of
of time. cycle (or a specific manufacturing operation). manufacturing activities (e.g. drilling, surface trearment,
machining, etc.), specific operations, manufacturing
equipement, etc.

Item Escape Rate (IER) Item Escape Rate Number of items produced and identified as not compliant to the applicable definition or IPM (Item per Million) Maybe used to measure failure rate during testing activities.
specfication versus the total number of items producedduring the period or % See SCMH section 5.1.2 . 'Delivery Metrics Definition
Guidance'.

Item Concession Rate Item Concession Rate (or number) . Concession Rate (CR): Number of concessed items vs. Number of items produced by the % or units per week, See SCMH section 5.1.2 . 'Delivery Metrics Definition
(or number) company during the period. month, or year Guidance'.
. Concession per System (CPS): Number of concessions raised on systems vs. Number of systems
produced by the company during the period.

RCCA Process Percentage of Non-Conformities and Non- Number of Non-Conformities and issues having been subject of formal RCCA plans divided by % This can be done for all NC or by categories of NC (e.g. by
Deployment Rate Conformances being subject of formal RCCA total number of Non-Conformities and issues. type of machines, by type of NC, by department or function,
plans (RCCA = Root Cause Analysis and by category of NC criticality, etc.) or on a specific scope (e.g.
Corrective Action). on customer complaints, safety issues, high level criticality
only, etc.).

RCCA Effectiveness Number of RCCA (Root Cause Analysis and Measure the effectiveness of root cause analysis and corrective action process. % This can be done for all NC or by categories of NC (e.g. by
Corrective Action) plans which prevented type of machines, by type of NC, by department or function,
recurrence of the related non-conformity or by category of NC criticality, etc.).
non-conformance divided by total number
of RCCA plans executed during a period of
time.
Time to Root Cause Number of days between detection of an Measures how long the Organization needs to define root cause from the the detection of an Days Days can be replaced by hours, weeks, …
issue and defining the root cause. issue.
Corrective Action Average time required to resolve issues from Measures the average time to process RCCAs, including containment action, root cause analysis, Days or weeks This can be done for all NC or by categories of NC (e.g. by
Response Time initiation of the RCCA process to closure. corrective action implementation and verification (9S). type of machines, by type of NC, by department or function,
Average by category of NC criticality, etc.).

Corrective Action Ratio of issues resolved within the customer Number of issues resolved within the customer and/or internal target time (from initiation of the %
Timeliness and/or internal target time. RCCA process to closure) divided by total number of issues resolved.

Equipment Calibration Number of items calibrated on time divided Measure the percentage of items calibrated on time. %
Rate by Number of items requiring calibration
during a period of time.

Productivity (Direct Measures efficiency of the direct labor Measure number of hours spent to manufacture a product vs. number of hours forecasted. % This KPI remains internal.
Labor Efficiency) force.

Material Variance/ Measures ability to comply with standards Measure quantity or costs of materials/components/parts required to manufacture a product vs. +/- number or delta This KPI remains internal.
Efficiency (cost and in terms of volumes of material used for the forecast. percentage
usage) production.

5. Supplier
Management
Purchase Order Launch Number of Purchase Orders that have been Number of POs sent on time vs. total number of POs. %
Performance sent to suppliers in due time in line with
business needs and supplier contractual
leadtime divided by total number of
Purchase Orders sent during a period of
time.

Purchase Order Number of POs acknowledged by the Number of POs acknowledged by the Supplier within due date (acknowledgment received by the %
Acknowledgment Rate Supplier within due date. Customer within a fixed time limit) vs. the total number of Purchase Orders sent by the
Customer.
Supply Chain Measure the On Quality and On Time Same definition as Customer (OEM) metrics. %
Performance (Global overall performance of the supply base
plus Key Supplier (overall figures including all suppliers and
Quality and Delivery) individual figures for key suppliers, those
being more critical and/or representing the
highest business volume).

VLD (Very late Number of PO lines (units) delivered with Measures the potential high impact on customer production line and deliveries. Units per week,
Delivery) more than 10 days of delay (or a number of month, or year, or %
days as fixed by the customer).

Supplier Capacity Measure the level of supplier's forecasted Measures the workload required by of your suppliers to design, produce and deliver your %
Analysis workload for main actvities (production, products vs the total available supplier working capacity.
assembly operations, manufacturing
engineering, etc.) versus the total available
suppliers' capacity in the period.

Supplier Rating Indicates the overal satisfaction of your Number or percentage of suppliers in each Level of satisfaction range (e.g; Gold/Silver/Bronze, % or figures and This is generally included in a supplier scorcard showing
(Recommended suppliers against pre-determined and etc. or A/B/C/D, Green/Amber/Red, Excellent/Good/Medium, Poor/Unsatifactory) and trends main agreed performance KPIs and criteria.
dashboard related mutually agreed criteria for some indication of trends vs. last measure. (improves/stable/
practice) parameters. degrades)

Performances and Shows main non-conformities/findings/ Percentage of non-conformities/issues per type of issues (defect code or root cause codes) and % (pareto diagram or Use of AS/EN/JISQ 9100 audit defect codes/root causes as
Audits Results (pareto , weaknesses identified during supplier audits classification per number of occurrences/re-occurrences. pie chart) defined in OASIS is recommended.
repeat occurrence, or operational monitoring, their percentage
evolution), by categories of findings, main re-
(Recommended occurrences - repetitive issues - and
dashboard related associated evolution.
practice)

Supplier Corrective Shows if corrective action plans launched by Measure the effectiveness of root cause analysis and corrective action process. Same definition % effective/non
Action Management suppliers are effective to eradicate issues as above KPI's. effective
Plan Effectiveness plus and if their implementation date was in line % of late/on time or
Timeliness with cutstomer target dates. number of days before
implementation

6. In Service (Feedback
from Operations)

In-Service Number of product non-conformities or Number of part removals, reworks or returns, or number of complaints, or number of warranty Unit per week, month, This can be measured for a certain period of time of in-
Failures/Quality Issues quality issues (occurrences for a certain claims, etc. originated by quality issues (non-conforming product, poor documentation, etc.) not or year, or % of service operations or for a number of delivered products or
period of time or number of delivered detected /not solved before delivery and identified by the operator or final customer during in delivered units or combination of the two.
products) that have not been detected service operations of the final product. It measures the non-quality that has been exported to combination of both The detailed scope (limited to non-conforming product vs.
before delivery to the final operator / final the operator or final customer and all quality filters have failed to detect and contain. applicable design, or all failures originated by desgn issues,
customer and have generated specific field manufacturing error, etc.) must be clearly defined to ensure
actions after entry into service. proper anaylis can be made and adequate action plans are
launched.

Early In-Service Same as OEM quality KPIs but this is Same as above, but the considered period is limited to a short time (generally few weeks or few PPM or Unit or % Same comment as above.
Failures/Non Quality measured during the first weeks or months months after entry into service of the final product.
Issues of service.