Question: What is Compliance KPI (Key Performance Indicator) ?

Answer:

Factory compliance KPIs (Key Performance Indicators) help measure and ensure that a factory operates in accordance with legal, safety, and ethical standards, particularly in industries like manufacturing, textiles, and electronics. Common factory compliance KPIs include:

01. Health and Safety Compliance

Accident Frequency Rate: Number of accidents per 1,000 employees.
Lost Time Injury (LTI) Rate: Number of injuries that result in lost work time.
Near Miss Reports: Number of near misses reported (situations that could have caused accidents).
Safety Training Completion Rate: Percentage of workers who have completed mandatory safety training.

02. Environmental Compliance

Waste Management: Amount of waste produced versus recycled or disposed of.
Energy Consumption: Total energy used per production unit.
Water Usage: Water consumption per production unit.
Carbon Emissions: Measurement of carbon footprint per unit of production.

03. Labor Compliance

Working Hours Compliance: Percentage of workers adhering to legal working hours and overtime limits.
Minimum Wage Compliance: Percentage of employees paid at or above the legal minimum wage.
Employee Turnover Rate: Rate of employees leaving the factory.
Labor Audit Scores: Results of regular labor compliance audits.

04. Product Quality Compliance

Defect Rate: Percentage of products that fail to meet quality standards.
First Pass Yield (FPY): Percentage of products that pass quality inspections without needing rework.
Customer Complaint Rate: Number of complaints related to product quality.
Non-compliance Findings: Instances where product quality standards are not met during audits.

Supply Chain Compliance

Supplier Audit Compliance: Percentage of suppliers compliant with ethical and legal standards.
Material Traceability: Ability to track materials back through the supply chain.
Vendor Code of Conduct Compliance: Percentage of vendors adhering to the factory’s ethical code of conduct.

Regulatory Compliance

Audit Score: Results from third-party compliance audits (social, safety, environmental, etc.).
Regulatory Violations: Number of regulatory violations identified.
Corrective Action Plan (CAP) Completion Rate: Percentage of compliance-related corrective actions completed on time.

Each KPI should be regularly monitored to ensure compliance with local laws, industry standards, and internal policies. Factories often customize KPIs based on specific compliance needs or customer requirements.

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