Quick Answer: Top Metrics to Measure Quality

Performance
Refreshed 26 April 2022, Published 2 June 2021 - ID G00734515 - 5 min read
FOUNDATIONAL This research is reviewed periodically for accuracy.

Quality Research Team

Initiatives: Quality Management

Quality leaders track a range of metrics in their quality dashboard

to measure performance. This research enumerates metrics
quality organizations most commonly track, and helps leaders
select the key metric categories to track based on their business
focus.

Quick Answer
What are the most common metrics companies track to measure quality
performance?

Quality organizations track a range of metrics to measure their quality performance.

These metrics are categorized under product quality, supplier quality, customer quality,
cost of quality, internal process, design quality and software/cloud quality:

■ Product quality: defect rate, first pass yield, number of recalls and warranty
claims

■ Supplier quality: supplier audits, noncompliance rate, number of supplier

corrective action responses, on-time delivery rate and supplier risk rating

■ Customer quality: customer complaints, on-time delivery rate, customer claims

closure and customer satisfaction

■ Cost of quality: cost of poor quality

■ Internal process: corrective action closure rate, scrap, rework and

excess/obsolete inventory

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More Detail
The 2020 Gartner Quality Dashboard and Metrics Survey studied the most common
metrics companies track to measure their quality performance. We categorize these
numerous metrics into key areas where a quality organization has responsibilities (see
Figure 1).

Figure 1: Most Commonly Tracked Metric Categories

Product Quality
Product quality ensures that manufactured goods meet quality specifications and
standards at every stage in production, distribution and after sales. Nearly all quality
organizations surveyed track product quality (96%), making it the most common metric
category tracked to measure quality performance. Metrics most commonly tracked by
quality organizations within product quality are:

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■ Defect rate (for example, defective parts per million/defects per million
opportunities) (76%)

■ First pass yield (56%)

■ Number of recalls (56%)

■ Warranty claims (51%)

Reasons to track: As quality leaders push to reach markets faster and get it “right the first
time,” product quality metrics serve as the most direct and quantifiable to measure
performance. Tracking product quality metrics enables businesses to continuously track
product variations and failures, thereby maintaining product integrity.

Reasons not to track: Lack of tangible products/processes is likely to pose difficulties for
quality organizations that are highly serviced or operating in a niche industry (like oil and
gas) to map performance using product quality metrics.

Supplier Quality
Supplier quality measures the overall performance of a supplier and the quality of inputs
they supply. Ninety-one percent of quality organizations track supplier quality metrics and
work collaboratively with their suppliers to fulfill customer expectations. Metrics quality
organizations most commonly track within supplier quality are:

■ Supplier audits (81%)

■ Noncompliance rate (78%)

■ Number of supplier corrective action responses (SCARs) (78%)

■ On-time delivery rate (70%)

■ Supplier risk rating (70%)

Reasons to track: Given the inherent need of suppliers, whose inputs feed into the final
product/service, it is in the quality organization’s best interest to track that its suppliers are
providing high-quality inputs and promptly flag nonconformances, if any.

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Reasons not to track: Instead of having a large number of suppliers, quality organizations
are gradually moving toward more sustained partnership-based arrangements with a
handful of suppliers. This reduces the need to actively track supplier quality, especially in
cases where the supplier has proven to manage the output well. Additionally, supplier
quality may be managed outside of quality (most commonly by procurement); such
instances might not be captured in responses received from quality leaders for this study.

Customer Quality
Customer quality aims to understand customers’ expectations and feedback, and ensure
the quality organization addresses them to improve the overall customer experience.
Almost four-fifths of quality organizations directly track their customer quality metrics to
ensure customer satisfaction. Metrics quality organizations most commonly track within
customer quality are:

■ Customer complaints (83%)

■ On-time delivery rate (72%)

■ Customer claims closure (59%)

■ Customer satisfaction (55%)

Reasons to track: Customer quality metrics indicate the most direct interaction a business
has with its customers and help measure the contribution of a product/service to the top
line. They also serve as a guidebook for quality leaders to track what went wrong and
identify areas of improvement.

Reasons not to track: Customer quality metrics are a derived measure of quality’s
performance, where a customer’s overall experience could be traced back to various parts
of the business. For instance, a delay in the delivery might be due to a delay in receiving
input from a supplier, or a product recall might be due to a glitch in the product design. In
such an interlinked environment, even though customer quality metrics are being tracked,
some portion is often tracked under other quality metrics or functions in the business.

Cost of Quality
Tracked by 68% of quality organizations, cost of quality is the difference between the
actual cost of a product or service and what the reduced cost would be if there were no
possibility of substandard service, failure of product or defects in its manufacturing (see
 Cost of Quality (COQ), American Society for Quality).

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Cost of poor quality is more than twice as likely to be tracked by quality organizations
(88%) than the total cost of quality (41%).

Reasons to track: Cost of quality metrics are an effective communication tool that
quantifies otherwise abstract concepts of quality. They also serve as an improvement tool
that transforms quality’s efforts and improvement programs into monetary terms. This
equips them to have more persuasive conversations with stakeholders on the cost of
nonconformances or potential savings.

Reasons not to track: The cost of quality model encompasses a gamut of quality metrics
and is data-extensive. No two cost of quality models are the same — what works for one
organization might not work for another at all. Without a “typical” cost of quality model,
quality leaders often struggle to gain buy-in for, and drive action from, cost of quality.

See Gartner’s Ignition Guide to Designing a Cost of Quality Program to build a cost of
quality model and develop an action plan.

Internal Process
Internal process metrics include the entire system of organizational processes, policies
and standards, and are tracked by 68% of the surveyed quality organizations. Metrics
quality organizations most commonly track within internal process are:

■ Corrective action closure rate (79%)

■ Scrap (69%)

■ Rework (56%)

■ Excess/obsolete inventory (52%)

Reasons to track: Internal process metrics provide a view of the overall state of processes
within the quality organizations and “how” quality objectives are being met. They enable
quality leaders to learn from experiences to develop best practices and facilitate root-
cause analysis.

Reasons not to track: Internal process metrics have considerable overlap with other
metric categories. Quality leaders are likely to be tracking these metrics but mapping them
in a different metric category depending on their organizational model.

Other Quality Metrics Tracked

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Other less commonly tracked quality metrics include design and software/cloud quality:

■ Design quality metrics are tracked by 41% of quality organizations, who more
commonly measure specification adherence rate (57%) and open critical action
items (54%). Design quality is often traded for faster turnarounds or speedier
product launch. However, it offers a great opportunity for quality leaders to catch
flaws in their product early on and save cost by addressing issues at the design
stage itself (rather than later in the process).

■ Software/cloud quality is the least common quality metric tracked, with only 12% of
quality organizations tracking it.

■ Other miscellaneous quality metrics tracked by quality organizations include internal

improvement project, requirements quality, regulatory/compliance quality,
manufacturing quality and internal health metrics on customer culture.

Recommended by the Authors

Embedding Quality in New Product Design

Supplier Quality Management — Activity Map Design Quality Metric Library

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