Quality KPIs: Examples and application

Quality KPIs (key performance indicators) are essential for ensuring customer and user satisfaction. Managers must track specific data points to verify that their strategies are delivering the expected results — whether in warehouses, production plants, or other work environments. In this post, we’ll explore what quality KPIs are, their key characteristics and benefits, and take a look at some practical examples.

What are quality KPIs?

Quality KPIs are metrics companies use to evaluate the performance of their operations, gauge public perception of their services, and determine whether their products meet established standards. By monitoring these data points, businesses can track process efficiency and assess the outcomes of their organizational and commercial efforts. Having this information empowers them to improve overall performance.

Beyond supporting more agile operations and higher customer satisfaction, quality KPIs also foster compliance with international standards such as ISO 14001 and, in the case of the food industry, BRC guidelines.

Additionally, ISO 9001 requires businesses to set clear, measurable quality objectives, making it necessary to have indicators that allow for their assessment. This standard promotes a continuous process improvement approach and calls for companies to define quality goals aligned with their overall strategy.

Characteristics of quality KPIs

To effectively monitor business activity, KPIs for quality must meet the following criteria:

• Measurable. They are quantifiable and relate to the quality of processes, products, or services.
• Accessible. The collected data should be useful to everyone involved in maintaining product or service quality — from plant, warehouse, and logistics managers to those responsible for on-site implementation or last-mile delivery. Making them aware of areas for improvement is the first step toward better performance.
• Interpretable. Beyond data collection, results must be presented in a way that allows for clear, actionable analysis.
• Objective. While some KPIs may relate to perceptions or subjective aspects, the information is gathered objectively using standardized tools or forms.
• Representative. To provide meaningful insights, quality KPIs must clearly reflect the company’s actual operations.
• Comparable. They should enable comparisons over time or across similar units to support decision-making and continuous improvement.

Benefits of quality KPIs

Defining how a business will monitor and control quality brings multiple advantages:

• Process standardization. Using quality KPIs — whether in industrial, logistics, or other sectors — promotes the consistent implementation and maintenance of quality standards.
• Higher service levels. Optimizing resource allocation and operational processes, while monitoring factors like delivery times, product quality, and customer service, helps boost end-user satisfaction.
• Continuous improvement. Understanding an organization’s actual performance makes it possible to identify areas that need more attention and take steps to mitigate quality issues.
• Corrective actions. Quality KPIs serve to detect where adjustments are needed and guide the implementation of effective solutions.
• Ongoing monitoring and evaluation. Relying on objective data and tracking them over time makes it easier to measure the impact of changes implemented.

Key quality KPIs for businesses

Companies may focus on different quality KPIs depending on their goals and areas of operation. However, these metrics are commonly relevant across most industries:

• Order fulfillment. These metrics assess whether customer demands have been met accurately and on time. This typically involves delivering raw materials or finished goods in the correct quantities and within the agreed-upon timeframe.
• Efficiency. Organizations must understand how many resources are required to carry out production and operations while maintaining target quality standards. Monitoring efficiency makes it possible to identify errors and improvement opportunities.
• Accuracy. Quality KPIs such as order accuracy are especially valuable for assessing warehouse performance.
• Productivity. These metrics determine whether the company is operating profitably. In logistics, this may include data on line and order fill rates, percentage of orders shipped, stock-keeping units (SKUs) on hand, inventory levels, space utilization, and location usage by item type.
• Customer satisfaction. This reflects the perceived value of the product or service by the end consumer. Tracking and measuring satisfaction is critical to prevent unresolved issues from resulting in customer loss or financial impact.

Types of quality KPIs

Quality KPIs can be classified in several ways. Based on their nature, they may be quantitative or qualitative. They can also be grouped according to the type of service or process being assessed. For example, product quality can be measured by defect rates, response quality by resolution times, and process quality by rework rates. Additionally, quality KPIs can be categorized by their relation to cost (e.g., prevention or evaluation indicators) or by where they apply within a workflow — at the input, during the process, or at the output stage.

Quality KPI examples

Each industry defines quality in its own way. What’s considered a quality KPI in one area may differ in another. For example, in some fields, quality is measured by delivery speed or customer satisfaction. In others, it’s assessed by product defect rates or response times to service requests. These specific metrics are crucial for evaluating and optimizing performance within each particular sector:

• Logistics. Common logistics and supply chain KPIs include delivery time, order fulfillment rate, customer satisfaction, and error percentage.
• Manufacturing. Metrics such as defect rates relative to total production are vital quality check KPIs for efficient factory operations.
• Services. Customer satisfaction is fundamental, as is the time taken to respond to consumer requests.
• Education. Graduation rates and exam results serve to measure academic performance.

Software for measuring logistics quality KPIs

Manually measuring and analyzing quality KPIs is a complex task. However, logistics managers can use a warehouse management system (WMS) to coordinate and monitor operations while thoroughly collecting facility data. Interlake Mecalux’s Easy WMS features Supply Chain Analytics, an advanced module that segments and structures warehouse KPIs, transforming them into valuable insights to support strategic decision-making.

Quality KPIs and operational excellence

From process standardization to timely corrective actions, the benefits of robust quality management are undeniable. By understanding and applying KPIs that are measurable, accessible, interpretable, objective, representative, and comparable, businesses can ensure higher service levels, optimize resources, and ultimately boost profitability.

Investing in quality KPIs isn’t just an option — it’s a necessity for organizations striving for operational excellence and lasting customer satisfaction in an increasingly demanding market.