top of page

Reliable Performance Data

⏤measure what matters


Enterprise Reporting and Strategic KPI Thresholds

KPI thresholds are strategically established by leadership for each department. When performance is below the KPI threshold value, an alert is submitted to the improvement portfolio manager for consideration to launch an improvement project. Strategic KPIs launch improvement initiatives to take actionengaging people at all levels in solving problems, improving processes and achieving measurable business value.



Structured Failure Code Lists

Failure codes are critical for accurately measuring internal and external failures to assess product and process performance. A strategic, structured approach to Failure Code Lists includes:

  • Failure Code Naming Convention

    • Alignedwith design/customer terminology and reporting requirements

    • Component-levelto identify specific components that fail

    • Discrete Values—to eliminate "synonym data fragmentation"

    • Consistentavoid: crack, cracked, cracking, etc.

    • Concisefor intuitive simplicity

Alignment with Engineering Design & Customer Reporting Terminology

Failure codes and terms for products should be aligned with engineering design and customer requirements. By establishing alignment, communication of failures is simplified throughout the product lifecycle. Additionally, reports that rely upon Failure Code Lists can be automated in compliance with customer reporting formats and requirements.

80-20 "Pareto Principle" Approach

The 80-20 “Pareto Principle” approach produces a more concise Failure Code List to improve data entry reliability while keeping the focus on high impact failures.

  • Named Failure CodesFailures that contribute to the top 80% of failure quantities. These are the "top failure issues" that need visibility and consideration for appropriate corrective action. To promote data integrity and reliable reporting, Named Failure Codes are captured using a drop-down selection field in the data entry form.

  • OTHER (Add description)Failures that do not have a listed "Named Failure Code" are entered as "OTHER (Add description)" and require a description to be entered. OTHER (Add description) captures the lower 20% of failure quantities

"Today, organizations need to use the Pareto Principle to help them separate

the “vital few” problems from the “useful many.”"Dr. Joseph M. Juran

Eliminate "Synonym Data Fragmentation"

Synonyms in Failure Code Lists cause data fragmentation that results in poor data integrity, including:

  • Data Entry

    • Confusing Choices—Data entry of failure codes is confusing due to failure code synonyms. (Data Entry Representative: “Wow, several of these failure codes are similar…which similar code should I select?)​

    • Too Many Choices—Data entry of failure codes is difficult since failure code synonyms lead to more failure codes to review upon data entry. (Data Entry Representative: “Wow, this is a long list of failure codes…how do they expect me to enter this accurately?)

  • Reporting

    • Failure quantities are understated—Failure quantities are understated since failures for a specific issue are fragmented across multiple synonymous failure codes rather than one code for the specific failure. Synonym data fragmentation leads to poor visibility and inaccurate measurement of internal and external failures.​

    • Corrective Action—Assessing “appropriate” corrective actions is unreliable…failures that adversely impact customer and company can easily go unnoticed. (Quality Engineer: “Wow, I just noticed our failure codes are loaded with synonyms…I wonder how many of these components actually failed for this issue?)

    • Design Engineering Feedback—Design Engineering receives unreliable feedback regarding product performance. (Design Engineer: “Wow, I just noticed our failure codes are loaded with synonyms…It seems our designs haven’t been performing as well as we thought they were?)​​

Administration of Failure Code Lists

Each product type should have an associated "Failure Code List" which is centrally administered (typically by the Quality department). Business is dynamic—new products, new suppliers, process changes, old failures solved. To sustain optimal data integrity, Failure Code Lists should be periodically reviewed and updated to reflect current products/processes and sustain the 80-20 "Pareto Principle" approach.

  • Data captured in the "OTHER" category—look for:

    • Named Failure Codes incorrectly assigned as "OTHER".

    • High risk failures that should be "promoted" to a Named Failure Code.

    • Failures that should immediately be considered for appropriate corrective action (e.g., a single significant incident).

  • Training for Data Entry

    • Data entry representatives should be trained when updates to Failure Code Lists are rolled out.​ Most all employees are involved (directly or indirectly) in customer-facing roles that involve failure capture and resolution—customer service, sales, social media, complaint handling, problem solving—this can be a large group of data entry representatives!

Business Impact

Structured Failure Code Lists enable accurate measurement of internal and external failures—critical information for assessing business impact (financial and risk). Organizations guided by accurate and timely failure code data are better positioned to focus resources on high-value strategic improvements aligned with customer and business priorities.

Digital Architecture

Your IT framework should not be a black box—data architecture should be structured in a way to make data flow effectively and efficiently to meet business needs.

  • Is your data managed in a way that enables visibility for informed and proactive decision making?

  • Have you performed a 5S lean analysis of your IT framework & business dataflow architecture?

80-20 Pareto-Failure Codes.png
bottom of page