Guide: SQDC
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SQDC, standing for Safety, Quality, Delivery, and Cost, is a multi-focused framework key for focusing on various performance indicators in business operations. This system skillfully integrates diverse aspects of business activities, ensuring a comprehensive approach to managing and enhancing overall business performance.
Variations like PQDC, which emphasizes People, and SQDCG, where ‘G’ stands for Growth, adapt the framework to different business priorities. The intentional sequence of these components highlights the prioritization of safety or people, followed by quality, delivery, and cost. Utilized in various business settings, SQDC aids in concentrating on specific KPIs at regular control points, ranging from daily meetings to hourly or weekly metric reviews, depending on the business’s pace.
Table of Contents
What is SQDC?
SQDC is a framework for the focus of multiple performance indicators that focus on Safety, Quality Delivery and Cost. This system integrates different aspects of business operations, ensuring a complete approach to managing and improving the overall business performance.
There are variations of SQDC that you might come across in some businesses as it is adapted, such as PQDC, which replaces safety focus for people focus. Another variation is SQDCG, with the G focusing on growth. It is important to highlight that the sequence of letters it intentional; the other focus should be safety or people first, then quality, delivery, and cost.
Businesses use SQDC as a way of focusing on KPIs of different focuses within the business at short interval control points, which could be the daily start of shift meetings or hourly or weekly reviews of the metrics dependent on the pace of the business.
Safety
Safety, the first component of the SQDC framework, is fundamental to the well-being of employees and the overall operational integrity of an organization. It involves a commitment to creating a workplace where safety is not just a policy but a core value embedded in every operation. This commitment is achieved through:
- Regular Training: Ensuring that employees are well-versed in safety protocols and understand how to handle equipment and materials safely.
- Risk Assessments: Identifying potential hazards in the workplace and taking steps to mitigate them.
- Proactive Measures: Implementing strategies to prevent accidents and injuries, such as maintaining equipment, improving workplace ergonomics, and enforcing safety protocols.
Quality
Quality is the next area of focus in SQDC, which focuses on the quality levels of the products or services the business offers. It’s about consistently meeting or surpassing customer expectations. Key aspects of this component include:
- Quality Control Processes: Implementing checks and balances throughout the production or service delivery process to ensure high standards.
- Continuous Improvement Practices: Using methodologies like Six Sigma to improve processes, reduce defects, and enhance overall quality.
- Customer Feedback: Actively seeking and responding to customer feedback to improve product quality and service delivery.
Delivery
Delivery focuses on the timeliness and reliability of providing products or services. This part of the SQDC framework aims to optimize customer satisfaction through:
- Efficient Supply Chains: Streamlining the supply chain to ensure timely delivery of raw materials and finished products.
- Effective Project Management: Planning, executing, and monitoring projects efficiently to meet deadlines.
- Production Schedule Alignment: Aligning production schedules with market demands to ensure that products are available when needed.
Cost
Cost management in the SQDC framework is about maintaining financial discipline while delivering on the other components of the framework. It includes:
- Lean Manufacturing: Adopting practices that reduce waste and improve efficiency.
- Waste Reduction: Identifying and eliminating unnecessary costs in the production process.
- Process Optimization: Continuously looking for ways to make processes more cost-effective without compromising on quality, safety, or delivery.
People (In PQDC)
When the framework expands to PQDC, People become a central focus. This addition underscores the role of human resources in achieving organizational objectives. Key elements here include:
- Employee Engagement: Ensuring that employees are motivated, committed, and feel valued within the organization.
- Skill Development: Providing training and development opportunities to enhance employee skills and capabilities.
- Teamwork and Leadership: Fostering an environment where teamwork is encouraged, and effective leadership is provided to guide and support employees.
Think of SQDC as a table or chair. To be stable, the chair needs all four legs in good condition to support and be steady. Businesses are the same and need to focus on Safety, Quality, Delivery and Cost to remain stable as a business. By ignoring one, the business could have issues and become unstable.
Applications of SQDC in Business
The practical application of the SQDC/PQDC framework in business is a dynamic and continuous process that involves setting specific goals, tracking progress, and fostering a culture of improvement and accountability. Let’s explore this in more detail:
Setting Specific and Measurable Goals
The first step in applying the SQDC framework is to establish clear, measurable objectives for each component:
Safety
These might include reducing the number of workplace accidents, increasing the frequency of safety training, or improving compliance with safety protocols.
Examples
Number of Days Without a Workplace Accident: This KPI tracks the number of consecutive days the workplace has operated without a reported accident or injury, indicating the effectiveness of safety measures.- Safety Training Completion Rate: Measures the percentage of employees who have completed mandatory safety training within a specified time frame, reflecting the organization’s commitment to safety education.
- Safety Audit Compliance Score: A metric that quantifies the results of regular safety audits, evaluating how well various departments or teams adhere to established safety protocols and regulations.
Quality
Objectives could involve lowering defect rates, improving customer satisfaction scores, or enhancing product reliability.
Examples
Defect Rate: Percentage of products with defects versus total products produced.
Customer Satisfaction Score (CSS): Average rating given by customers on product/service quality.
First Pass Yield (FPY): Percentage of products meeting quality standards without needing rework.
Delivery
Goals may include decreasing lead times, improving on-time delivery rates, or enhancing the efficiency of supply chain processes.
Examples
- On-Time Delivery Rate: The percentage of orders delivered on or before the promised delivery date.
- Lead Time Reduction: The average reduction in the time taken from receiving an order to delivering it.
- Supply Chain Cycle Time: The total time taken for a product to move from the beginning of the supply chain to delivery to the customer.
Cost
These could involve reducing specific operational costs, improving the efficiency of resource use, or cutting waste in production processes.
Examples
Reduction in Production Costs: Measure the percentage reduction in direct and indirect production costs over a specified period.
Increase in Cost Efficiency Ratio: Track the improvement in the ratio of operational costs to revenue, aiming for higher efficiency.
Waste Reduction Percentage: Quantify the decrease in material waste or process inefficiencies, expressed as a percentage of total production.
People (in PQDC)
Objectives might focus on improving employee engagement scores, reducing turnover rates, or enhancing skill development programs.
Examples
Employee Engagement Score: Measure the percentage of employees who are actively engaged in their work, as determined through regular surveys or assessments.
Training Completion Rate: Track the proportion of employees who complete mandatory and developmental training programs within a specified period.
Turnover Rate Reduction: Calculate the reduction in the employee turnover rate over a set timeframe, aiming for lower turnover as an indicator of improved job satisfaction and organizational stability.
SQDC Boards
SQDC boards are often used in businesses, particularly in manufacturing and as part of visual management within a visual factory. These boards serve as a central point for tracking performance, identifying issues, and fostering a culture of continuous improvement.
SQDC boards are physical or digital displays that provide a snapshot of key performance indicators relating to Safety, Quality, Delivery, and Cost. They are usually placed in strategic locations where team members can easily see them, such as production areas, meeting rooms, or common spaces.
Key Visual Elements of SQDC Boards
- Visual Indicators: The boards typically use charts, graphs, and color-coded indicators to show performance data, making it easy to understand at a glance.
- Current Status: They display the current status of each SQDC/PQDC component, often updated daily or in real-time.
- Historical Data: Many boards also show historical data to track progress over time and identify trends.
- Action Items: Some boards include sections for noting specific action items or improvement plans.
Conclusion
SQDC and its variants like PQDC represent more than just a set of operational guidelines; they are foundational pillars for business stability and growth. Emphasizing aspects such as Safety, Quality, Delivery, Cost, and People, these frameworks guide businesses in setting measurable goals and fostering a culture of continuous improvement and accountability.
Through the use of tools like SQDC boards, businesses gain a visual and interactive medium to track progress, identify challenges, and celebrate achievements. This structured approach not only enhances operational efficiency but also ensures a balanced focus on crucial business elements. In essence, SQDC and its adaptations provide a comprehensive strategy for businesses to maintain stability and navigate the path to success.
References
- Sokolov, A.M., Hossain, N.U.I., Albarran, J.J. and Merrill, B., Integrating Performance Indicators to Track the Production Development of Manufacturing Lines.
- Gaspar, F. and Leal, F., 2020. A methodology for applying the shop floor management method for sustaining lean manufacturing tools and philosophies: A study of an automotive company in Brazil. International Journal of Lean Six Sigma, 11(6), pp.1219-1238.
Q: What does SQDC stand for?
A: SQDC stands for Safety, Quality, Delivery, and Cost. These are the four key performance indicators that the board tracks to give you a comprehensive view of your manufacturing operations.
Q: How often should the SQDC board be updated?
A: The frequency of updates can vary depending on the nature of the metrics and the operational requirements. Some metrics might need daily updates, like safety incidents, while others like cost metrics could be updated weekly or monthly.
Q: Can an SQDC board be digital?
A: Absolutely! While traditional SQDC boards are physical whiteboards, many companies are now using digital boards. Digital boards can offer additional features like real-time updates, tooltips, and links to more detailed reports. Recently Power BI is becoming a goto method for SQDC and KPI displays in production.
Q: Who should be responsible for updating the SQDC board?
A: The responsibility can be shared among team members, or designated to specific individuals like department heads or managers. The key is to ensure that whoever is responsible is committed to keeping the board up-to-date and accurate.
Q: How can an SQDC board help in decision-making?
A: An SQDC board provides a snapshot of key performance indicators, making it easier to identify areas that need improvement. By regularly reviewing the board, teams can make data-driven decisions and prioritize actions that will have the most impact on performance.
Author
Daniel Croft
Daniel Croft is a seasoned continuous improvement manager with a Black Belt in Lean Six Sigma. With over 10 years of real-world application experience across diverse sectors, Daniel has a passion for optimizing processes and fostering a culture of efficiency. He's not just a practitioner but also an avid learner, constantly seeking to expand his knowledge. Outside of his professional life, Daniel has a keen Investing, statistics and knowledge-sharing, which led him to create the website learnleansigma.com, a platform dedicated to Lean Six Sigma and process improvement insights.
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