Understanding Enterprise Quality Management Systems (EQMS)
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The quality software landscape has progressed to become enterprise-level solutions, whose integrated systems enable organizations to implement automated quality processes tailored to align with each of their specific products and business practices. This presentation from Sparta Systems explains the concept of Enterprise Quality Management Systems (EQMS).
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Understanding Enterprise Quality Management Systems (EQMS)
- 1. Mohan Ponnudurai Industry Solution Director Sparta Systems, Inc. Do More with Less Using EQMS The Benefits of Enterprise Quality Management
- 2. Agenda Industry Issues/Challenges Quality Management Framework Business Pains Current State of Systems What should be Considered Value, Benefits and Considerations Summary and Q&A 2 Key Takeaways Quality in the C-Suite Collaboration Power of One Visibility/Analytics COPQ Reduction Improved OE
- 3. Your Ideas and Concepts Business Critical Functions Specialized Systems Localized Processes Point Solutions Internally ‘jigged’ systems Custom/Manual Operations Integrated Platforms 3 Heavy investments made it best of breed solutions
- 4. Today’s Manufacturing Business Issues 4 Globalization Product Life Cycle (PLC) Mergers and Acquisitions Compliance Economic Cycle Supply Chain Disaggregation
- 5. Industry Pressures 5 Cost Pressure Margin Pressure Customer Satisfaction/Retention Risk Management Supply Chain/Supplier Management
- 6. Recent Developments Insolvency of Manganese Bronze Holding (London TaxiCab manufacturer) Apple quality issues Foxconn employee concerns (overwork, underage) Elpida Memory (biggest Japanese BK and liquidation) Sony (cutting production, shrinking business, selling buildings/facilities) AMD cutting 30% of workforce Quality issues at Ranbaxy Safety recalls at Food processing plants Solutions • Outsource • Cut Personnel • Consolidate • Improve OE • Cut Costs
- 7. Sales / Marketing / Planning Logistical Information Flow ERP Defining Quality Management Scope Innovation Management Portfolio Management New Product Development Manufacturing & Quality Operations Product Field Performance Sales & Marketing Production Planning Sourcing / Supply Chain Delivery Logistics After Sales Service InnovationLifecycle Value Chain R&D / Engineering Product Information Flow PLM Sourcing Supplier Information Flow SCM Distribution & Field Use Field Information Flow CRM
- 8. Business Pains Invested Technologies Pillars are Islands Siloed other data Untimely detection or resolution NVA Activities Visibility Lessons Learned 8
- 9. A Day in the Life Of… A Scenario Supplier Rec. Record event on supplier history Insert inspection and material details Follow inspection criteria instructions Record results Receiving Inspection Inspection results in a non- conforming material NCR Trend Detection Correction Root Cause Determination CAPA Determination Materials Received at the Dock
- 10. A Day in the Life Of… A Scenario CAPA Collect all data Investigate and record root cause FMEA Implement corrections NCR Investigation reveals a Systematic issue Effectiveness Check Document Change Change Plan Risk Assessment Design Change Execution Check Plan Check Execution Approvals Need to continuously verify effectiveness of CAPA actions SOP change is required to equipment maintenance procedure Supplier Audit Schedule and plan audit Execute audit on-line/off-line Record findings Supplier record Shows 5 related Quality events In the last month Supplier CAR Schedule and plan audit Execute audit on-line/off-line Record findings Revision to equipment maintenance procedure triggers CAPA process
- 11. What should be done?
- 12. Pressures Cost Control Competition Collaboration Margin Value (SH, Brand) Ideal Outcome Be competitive Be responsive Be profitable Manage Risk Improve visibility Single platform Reality Check 12
- 13. True Cost of Poor Quality (COPQ *) * COPQ is 15-25% of total cost Source: ASQ Testing Certification Product Liability Costs
- 14. Current State • Pressures of cost control, risk management, better supplier network, etc. • Demands of increased PLC, broader value chain, shareholder value, reputation, etc. • Pillar systems and many point solutions 14 ERP MES PLM Other $$$ • Innovation Lifecycle • Value Chain • Brand • SH Value P P P P P
- 15. Ideal State • Pillar systems do not manage quality processes well; reason for point solutions • Multiple data islands • Integrated solution with quality pillar • Completeness of Quality vision 15 ERP MES PLM Other P P P P P ERP PLM MES Other EQMS CURRENT STATE IDEAL STATE
- 16. Survival – Value and Benefits Centralized Harmonized Transparency Empowered Stakeholders Collaborative Risk Accessibility to Information Top reasons for Quality Management System Source: Aberdeen Research
- 17. The Balancing Act 17 The Balancing Act Process Capability Execute efficiently Adapt & improvise effectively Institutionalize & measure accountability
- 18. Quality Management Processes 18 Text Goes Here Text Goes Here Text Goes Here Text Goes Here Text Goes Here Lab Issues Deviations & Incidents Audit Management Supplier Quality Management Training Management Investigations Risk Evaluation Root Cause Analysis Effectivity Analysis Customer/Field Issues CAPA Change Control Batch / IT / Process / Document Material / Equipment Identifying the benefits from efficient execution, thoughtful improvement & effective tools & technology
- 19. Effective Quality Management Framework 19 Enterprise Quality Management Identify Analyze Correct Contain Prevent Reporting Analysis
- 20. What benefits are delivered? Functional Benefits Scalability of the system Visibility and transparency into critical issues throughout the entire organization Ease of data entry and transfer across the organization Faster issue resolution, reduced non-value add activity, reduced costs Ability to manage enterprise auditing from the executive suites to the shop floor and suppliers within one centralized repository – this creates visibility and saves $ by sharing information between various audit groups Suppliers HQ Shop Floor and Labs Quality Plant Management
- 21. Supplier Quality Management Key part of the value chain Broad supply chain Collaboration Methods - Audit - CAR - Scorecard - Faster Resolution - Effective supplier network 21 Managing Suppliers as part of the Quality Framework Source: Aberdeen Research
- 23. ROI Value – Now and recurring benefits How does this provide rapid ROI What can you do as ongoing leverage of initial investment – constant benefits Adjacent Functions
- 24. Success Factors Give Quality a seat in the C-suite - Visibility of KPIs - Decision making capability Make Quality a team sport - Top to bottom culture Increase Collaboration - Internal cross functional and external (suppliers) - Accessibility of Information through Dashboard and Analytics Link Quality to Risk – Cost, OE, Brand, SH Value - Shift to leading indicators instead of focusing on event based activities Power of One – Values of a single system One size does not fit all - Standardization - Variability in Work flows based on business rules
- 25. 25 Sparta Systems We Help Protect Millions of Lives Everyday www.spartasystems.com
Editor's Notes
- Boost Supplier Performance Levels using an Automated Audit Process
- What we will talk about today are The kinds of issues and challenges faced by manufacturing industry of all sectors The kinds of business pains they face; brought by challenges or other pressures What really is quality and we will discuss the basic framework of quality (just the fundamentals) As you all know, there are systems of many functions, complexity and specific solutions; we will explore what is typically found in the current state Then we will talk about what should be an ideal state, given the pain and pressures Now we will get to the value and benefits of such a enterprise QMS; where do you do gain value, how do you leverage your investment and some recommendations for you to consider. The key takeaways at the end of this webinar for you are - why is it important to elevate quality out of the lower functional levels to the top of the chain; you will see that quality is something that needs to come from top down, hence, it is a C-level initiative - EQMS provides a mechanism and a technological footprint for collaboration; this feeds into the theme of doing more for less whilst allowing for the quality related activities throughout the stakeholder network - We cannot stress enough the reasons and benefits of a single system; forget the silo mentality. This is one of the most important elements of doing more for less, i.e., cost reduction and OE improvement. You all have data, sitting in various forms and places. It is not good enough just to collect them religiously but not able to use them. You need those data in the form of usable information. This is where analytics and providing that analysis or metrics to the right people at the right time. Visibility provides the means to an end as part of doing more for less, with less. We are here to talk about not just doing more for less, i.e., cut that NVA activities so you gain at the bottom line. But as we cut the cost of quality, we are also improving quality. You get the benefits of both. Finally an EQMS provides you the automation, for repeatability and predictability in processes, which improves cycle times and ultimately OE. We are talking about benefits and value, and that is what you will hear from the beginning to the end.
- In that context, let’s explore what some of those ideas may be in the manufacturing environment. In this complex environment with multiple stakeholders, 100s of suppliers and products containing 1000s of parts, it is not something you would do using ledgers. You have many systems or software solutions that handle essential business critical functions, which are often referred to as pillar systems. To find solutions in the areas where these pillar systems do not have ideal functions, there are numerous specialized systems; typically these handle specific functions on their own or with some integration to the pillar systems. Then you often see plant level or functional level point solutions that came out of necessity; yet another layer of solutions may be created by local groups who jigged some tools together or created it to solve a specific need at that specific site. Then there are still legacy systems that either were manual (literally using pen and paper) or somewhat more modern using Access or Excel. All these solutions typically reside in their own data islands, and some of them exchange data at a rudimentary level and some not at all. Workers need to constantly shuttle data back and forth between these islands, which obviously has resource costs and time, prone to human errors, does not provide mechanism for business to make effective decisions in a timely manner and keeps the data away. You can all relate to these areas above in one way, shape or form, and you probably have quality data sitting in various siloes that do not exchange information, and you probably export required information on a monthly basis, condition them in Excel, produce output and yet again send them to PPT for presentations. You see, the information by the time it reaches for consumption is stale, old, and no way to click to get to the details. This is where we believe our solutions provide value and benefits on a continuous basis. You have made heavy investments in some of these systems, because you wanted to find solutions in today’s mfr issues at hand. So what are they?
- Wide range of pressures and obstacles are faced by companies today to maintain the highest level of quality in every facet of their operations. These pressures stem from a number of different areas including international regulations related to market entry (ex: UL, FCC, TUV, FDA, etc.), global customers with varied tastes and preferences along with technological variances (ex: 3G vs 4G, proliferation of wireless devices, etc) and broader supply chains due to globalization, offshoring and outsourcing, and complex manufacturing processes due to product sophistication, miniaturization and greater technological leaps (ex: Moore’s law deepening of chip densities, faster, better chips and rapid PLC).
- Then there are industry pressures, which stem from not only in the manufacturing of a given sector but at a global level. Greater demands on resources and tighter controls on cost, affects more than just manufacturing itself. Management is under greater pressure to deliver better margins, greater revenue and increased cash flow in order to support ongoing product research, gain market share and improve shareholder value. These demands affect industries in all sectors, and managers responsible for quality, IT, manufacturing, operations, R&D, service, support, warranty, customer satisfaction, etc. would gain from the lessons learned over time and current industry insights. Cost pressure is one of the major elements an enterprise faces, and if you look at the electronics or even automotive/industrial sectors, you have to innovate to stay in business; consumers expect better products, greater performance, faster processors, slicker form factor, continuous improvement in user experience, etc. and at the same time, they expect to pay less for these improvements as the product evolves. Take a look at the smartphones of 3 years ago to those of today – performance have improved by margin of factor while the price essentially stayed the same or even less. To maintain such pace, you have generate cash by way of improved margins so you are profitable with positive cash flow to invest in innovation. Innovation is not just R&D, but extends to innovative manufacturing that includes high quality, while managing cost. And if that is not the only thing, then you have competition – today we as consumers have a broad selection of products in any given segment so if they are not satisfied, they would switch since switching costs are manageable (you have seen how AT&T, Verizon, T-Mobile compete, or take a look at PC industry, or automobile industry or even consumer products….). Quality plays a huge role in maintaining customer satisfaction and in turn retention so you do not have to fight to fill lost customers. How do all these play from a corporate standpoint? You must take a proactive culture to identify risk, build proper risk controls and mitigation plans. We are not talking just financial risk, though, at the end of the day, all risks affect financially. It makes total sense to elevate quality out of the factory floor and link it to risk. The trends are to shift focus to leading indicators instead of event based activities. Many risk managers would tell you that decreasing avoidable losses impacts productivity and profitability. And this brings us to the last point which is supplier quality management. Supply chain is an essential part of any enterprise, and maintaining a dependable, quality supply chain is essential. This includes bringing the suppliers within your 4-walls, using technology to collaborate (not just from just inventory, purchase order, incoming, accounting, but also with regards to quality. They should be part of the team that provides root cause analysis, resolution, capa, and lessons learned. They should be part of the value chain and product life cycle management since they are a critical piece of cost, efficiency, risk and margins. These pressures will not subside but will increase as part of the innovative life cycle.
- We have all heard of events at various companies and industries that have taken place, which led to business failures, bankruptcy, insolvency, etc. It dies not mean they were not aware of these challenges and pressures, but they lost sight of the importance of managing these challenges; balancing the competing demands or keeping up with the increasing pressures. You see a few examples here. [Click] What these events have led to are some to outsource mfr completely, which is a common practice in the electronics industry. This is known as EMS (External mfr service). These EMS essentially become an extended part of the enterprise, while those EMS mfr for several customers. You see this in the semiconductor industry because of the huge cap expenses, they resort to foundries to mfr their wafers and chips. Some resort to tightening of the resources to conserve cash, however, it does not mean they are doing less – those employees now need to do more hence, they use better technology like EQMS to achieve those demands. All these lead to improving OE and cost management. This is what we will be talking about today.
- Some of you today may start in the value chain, and some may be already in the value chain as part of your QMS implementations. Some may already have a few integrated solutions, and many I bet have silo based systems. Do they work? Do they provide the basic functions? Sure. But can you tell me that they are working efficiently and providing the value you are required to produce? Are you making saving in COPQ that are material on an annualized basis? Well, let’s look a bit deeper into those areas. The best-in-class enterprises are very much in tune with software based solutions to run their business. [Click] As you see, the value chain starts from sales/marketing and ends in post-sales service. At the same time, [Click] you have the innovation lifecycle with greater importance of tighter and more frequent product life cycle. At the intersection [Click] is where manufacturing operations are, and many critical business functions take place. There are business critical applications, [Click] such as ERP, PLM, MEM/MOM, CRM, etc. which are mostly under control. What these pillar systems do not do are quality related processes, and even when they do, they only consider events from that pillar. Now you end up with multiple point solutions which are in their own silos. These point solutions do not communicate or share data between them. They are each a data island and what is even worse is when something is triggered from a pillar system, that information is manually carried to one of these point solutions, processed, and manually re-entered. If in another instance, point solution B is needed from point solution A, data is manually entered back and forth. All communication with external stakeholders is manually performed as well. These manual steps waste time, resources, effort and risk of not performing or completing tasks holding up downstream activities. And when it comes to management oversight and decision making, the information is hardly transparent. An army of resources are needed to fetch the data, process, condition and produce in consumable format – this is done every month. So what you see clearly that is tangible is non-value-added efforts, providing zero benefits and added risks of human errors, missed targets and costs. These are not just labor expended costs, but opportunity costs and intangible costs related to downstream activities, customer satisfaction, etc.
- So what are the business pains faced by the companies currently who have not implemented an EQMS? Can you manage the manufacturing centric quality processes using manual methods? You sure can, as many companies do with Excel, paper-based or even home-grown systems, however, it does not mean that you could handle this business critical central responsibility using manual methods efficiently. You have invested in the core pillar systems and technologies to support your operations. When you have filled the functional shortfalls with point solutions, you are doing a lot of manual work to connect the dots. Having the data for the sake of collection and compliance, sitting in siloes and being used on a monthly basis is not enough anymore. You need the right information to the right people in a timely basis to make business critical decisions. As I said earlier, risk is managed effectively when detection is based on leading indicators (trends, cycle times, returns, etc.) rather than wait for the month to catch up and wait for the events to come in. These manual or disconnected operations require a lot of resources, manual checking or getting data in and out through non-automated ways, using systems that are rigid and no leeway for processes variability, etc. These expend a lot of NVA activities, that deplete a valuable commodity – cash. As we spoke about information, visibility, transparency before, all the stakeholders are not in the loop so they can not only see the information that are relevant, but push the information at the right time. Buyers are kept in the loop about the suppliers, designers/engineers are kept abreast of the known issues of a part and/or which ones require redesign, maf engineers are aware of supplier factory issues or logistical issues stemming from an event took place, etc. The processes should be in place first, then technology or systems should be modeled for the processes, and personnel should be trained to employ those processes. This may sound complex, but with appropriate technology, it doesn’t have to be. What many enterprises are doing are balancing acts, when one over stresses the other (example – too many deviations coming from a production facility, and the technology or the resources are inadequate to handle them efficiently while passing the findings to the other cross-functional teams and supply chain). With the complexities of multiple locations, different business units and a broader supply chain, it is imperative to have a centralized system to realize the benefits and values enterprise-wide QMS.
- Just to give you the variety of problem areas one might face, lets take a day in the life of view of a given mfr entity. Every grey box in the diagram are areas that might require further attention, calling on EQMS. Material comes in, receiving inspection takes place [Click] ; if it passes the set criteria, the material inventory is accepted and is available for production in the MOM/MES systems. Otherwise, [Click] NC material triggers an NCR, which notifies the supplier so the supplier can be involved in investigation and corrective action, but also gets scoring effects in the supplier score card based on the outcome of the issue. This rejection is also notified to ERP, so it can put the lot in quarantine and issue appropriate accounting info in the AP. All these tasks take place in an automated way, almost instantly. What happens next?
- NCR investigation, through use of trend, history, querying, etc, that this is a systemic issue requiring a formal CAPA. [Click] The system initiates CAPA process based on the business rules, invoking steps and processing the next steps – which are collection of all data, investigation, identification of root cause and issuing actions for corrections. Perhaps the actions were to initiate an effectiveness check in regular intervals before closing the CAPA, and a change in an SOP so the suppliers and the design team makes some changes to resolve the issue. This triggers an SOP change activity, and once that is completed, relevant members are required to be trained on the new SOP as part of the process. In the meantime, The supplier record also reveals that this supplier has had similar issues at another plant, triggering a detailed supplier audit. [Click] supplier audit is scheduled, personnel notified and audit takes place. This audit reveals some areas of correction/improvement, so the supplier is issued with an SCAR [Click] to comply. All these steps go through like a ballet at the right time, requiring the right people, while notifying the right managers when approvals are required before moving to the next steps. The business rules set the tone of progression so there is no need for manual babysitting. Approvals are electronic, and members from the entire cross-functional teams can be part of the process, including external and suppliers. This is what we call automated, best practices based and business rules driven work flows. It is not rigid, it is not one size fits all strategy, and all data collected are delivered as required in the form of usable information. Analytics and dashboard is the main avenue of interaction as far as information consumption is concerns. Here is where you reap the value of such an EQMS.
- Before we go into that, let’s have a reality check…. This is what you are facing with, and what you really need to accomplish to survive and thrive in the current business climate. Your most critical pressures are cost, competitive forces, need to collaborate more with partners, external sites, suppliers and you need to maintain acceptable margin for the business to provide cash for continued innovation. This ultimately provides quality products so you protect the brand, reputation and ultimately shareholder value. It is quite easy so far to see cost controls everything – you can simply cut cost to improve margin, but you would pay for it by creating inferior product, which in turn might reduce customer sat, NPS, market share and cut the revenue. So at the end of the day, this is a downward spiral you do not want to be in. You need to have a system to promote quality while doing it efficiently to manage cost. You really want to look at the full picture and see what the true COPQ is? Q – So in summary here, cost management or control drive a lot of the outcome. What else are looked at as more pressing? A – At the end of the day, cost and operational efficiency gain drive a lot of the desired outcome. But this also drives a lot of the mechanics of those outcome, such as collaborating with other cross functional teams to efficiently manage activities in a timely manner, collaborate with suppliers for effective resolution, by having user configured dashboards to push relevant information in consumable manner improves visibility and makes it more responsive; managers have usable information for effective and efficient decision making, risk is managed based on these information and more leading indicators as opposed to just events, and finally decreasing the avoidable losses or events (repeats) impact productivity and profitability.
- COPQ is typically 15-25% of the total cost, according to ASQ. It may sound like a lot, you may think that we do not have quality issues, we do not have that much warranty costs or rework or replacement issues. But look the this diagram. You are probably thinking about the obvious costs, not the total cost. When you properly allocate cost elements for a given issue, there are a lot of background work goes into the processing till the loop is closed that need to be allocated properly. These under the water line cost [Click] elements are huge, and not to be overlooked. With an EQMS, a lot of the quality related tasks are part of the best practices, and the overall effect is that these adjacent cost elements are also reduced as a by-product. Reduce cost, improve quality, increase efficiency – that is the ultimate goal of such a system.
- Let’s now take a look at what I call the current state. You are pressured from two ends: Pressures of cost control, risk management, better supplier network, etc. and the demands of increased PLC, broader value chain, shareholder value, reputation, etc. You have several pillar systems [Click] and many point solutions [Click] as part of the functional footprint. These are all separate data islands, with some integration but not all. Is this approach providing the functionality your company needs, completeness across all the processes, functions and locations? What are the implications of this fragmented approach? Now let’s look at what could be an ideal state….
- You would agree that we must have flawless delivery across an extended supply chain to customers. Consumer-driven innovation is shrinking product lifecycles, engineering changes must be accelerated, and quality must not falter. To be effective, you have pillar systems that are essential. Quality/EQMS intersects all 4 pillar systems in an efficient enterprise. The biggest challenge in any organization is connecting the dots. IE – working together seamlessly. High-tech manufacturers are also investing in quality tools to drive interoperability of the processes and systems in the operations, working to develop a common quality platform across the enterprise. This help drive improvements in inventory levels, production schedules, and supply chain plans not just based on sales forecast and orders, but also feedback from ongoing operations. They gain real time visibility of the operations, build-in compliance and risk based controls, and better analysis to streamline the complexity of the quality processes. This is the reason for an enterprise quality vision. And this leads us to the Balancing Act…..
- Here is a research outcome from Aberdeen, in which the companies were asked the main reasons for an EQMS in their enterprise. You see very clearly customer satisfaction leads the response and then the COPQ, compliance, competitive advantage and risk. They also said it is important to have the quality pillar that is centralized and provide some standardization for trending, reporting, KPI visibility, and provide mechanism to empower the stakeholders with analytics, information consumption and timely tasks to get the job done efficiently. This fosters collaboration and manages tasks so appropriate personnel are part of the resolution. This is ultimate when it comes to risk… risk is a huge element from both operational, capability and financial sense. Q – So you have competing priorities here, that is customer satisfaction, COPQ, compliance, cost pressure, risk management, etc. How would you characterize a company should proceed to determine the business case (financial, operational and functional) for a QMS? Make a business case and analyze the real cost of poor quality. There are tangible and intangible costs, but do not forget to include non-value added activities, opportunity costs, risk costs and efficiency losses. And now, put value to having an EQMS and quantify the benefits. This should provide a clear picture of financial benefits, risk benefits and improved quality. We perform something called a BVA, which tracks the above, provide best practices based process flows and show you the TCO and ROI to make a fully informed business case for an EQMS.
- So back to what we see as an effective system – quality needs to be elevated to the top, and needs to be part of the culture. But that alone or having an EQMS solution does not provide you an efficient system with high quality products and cost control. Before anything, you need to map of the basic requirements. Such as, what do you want to improve, how to make use of the system (not from day 1 but part of the road map), and then you want to identify the tools (some you have under pillar systems) and what kind of platform, who to integrate with, how to bring the stakeholders into the 4-walls, etc, and plan to execute. This is important to realize that you perhaps cannot execute on your own; you may need specialized resources, help with configuration to make it work for you (remember one size does not fit all). Once you balance your needs from the process requirements to technology capability, you have achieved the balance. Now all you have to do is follow the plan!! Q - Do you see Best in class customers moving quality to more of a strategic business process. If so, who do you typically see at the executive level taking that ownership? A - Absolutely. Quality is not treated as just a process. Quality is also seen more strategic as opposed to just functional. You see how more and more enterprises tout quality even in commercials (ex: JD Power Associate, Hyundai, Samsung, etc.) As Steve Jobs famously said that if you deliver the quality products the customers want, sales and profits will follow. This also means that you need a ‘system’ in place for better communication and collaboration, both internal and external, which helps you manage and control cost, time to market and all areas of risk. Mitigating and managing risk is part of every executive’s daily responsibility. When it becomes a strategic initiative, C-Level involvement and top down culture of quality takes place. For the reasons we spoke of earlier, this makes perfect sense. So yes, quality is more strategic now than ever before.
- A system is not a fixed thing… As the fundamental of the quality management goes, you need a system for continuous improvement. You need to continuously monitor, and make changes to the execution to make the system more efficient and improve as you go through time. This diagram shows some of the quality processes that are core to EQMS, but there are many more that are adjacent. Success Factors Pick and choose the most valuable components to solve the most critical and pressing pressures Select what areas are connected, which pillars are essential Maintain a single source of record (record of truth) Monitor and manage progress through dashboards and consumable information
- What are main elements of quality management system that are typically used by best in class high tech manufacturers? To really understand QMS, lets go back to the fundamentals or framework of quality. Enterprise quality management is a continuous process that contains a basic set of processes and functional responsibilities with these steps: Identify - Identify and record the issue Contain - Immediate correction of an issue, which may include quarantine, disposition and short term resolution Analyze – This is one of most prolific and important steps which includes investigation and identification of a root cause of the issue Correct – Correct the issue and related mitigating factors Prevent – The final step to implement actions to prevent issues in the future and implement continuous improvement; Continuous improvement closes the loop to identify new issues. Once the fundamentals are in place, you must have the proper mechanisms to analyze and measure progress through reporting, dashboard, KPIs, etc. using best practices based cadence. The data should be presented in consumable information to the appropriate decision makers so the entire operations provide the value. When you are a broader enterprise with multinational layers of value chain and global strategic supplier partners, it is essential to consider them part of the ‘four-walls’. Extending the enterprise to include those crucial stakeholders is important, and we evangelize that this should be part of the corporate mandate as part of the corporate initiative. The benefits of this integration comes from efficiency gains, cost reductions, risk management and faster resolutions. This is again part of the continuous improvement not only within the enterprise but within the value chain.
- At the shop floor level, people are entering events into TW (event tracking system to this group); so it has to be intuitive and easy. Issues get elevated to Quality based on the workflow so they can take action on the events At the Plant management level, completely different set of needs but getting information from what was entered at the shop floor level, take tactical information to make decisions about their plan What these provide is tighter cycle time (i.e. cost), a lot less NVA (i.e. cost, and those resources can be used where they add value). Having a centralized repository of all quality information that are accessed by various stakeholders and provide usable information to decision makers, that is the real value. At the HQ level, viewing reports and metrics based on data entered at the shop floor level – “until TW, you don’t know what you don’t know”
- Quality becomes the mechanism to ensure reliable and competitive supplier-to-manufacturing processes connection; Quality data mitigates the high risks from interruption of deliveries. Here we show an analyst research outcome from Aberdeen, and shows what it means to managing suppliers as part of your quality framework. You can see how the industry leaders have taken this approach as part of their EQMS-Supplier collaboration. They need to be a key member of the cross-functional framework, which not only helps with costs, but fosters collaboration. Some of the methods they use as Audits, collaborative CAR leading to faster resolutions and lessons learned which builds a better supplier network. Q: How important is the measurements that a company chooses impact how they view and evaluate suppliers? Do companies have different quality measures for different suppliers? A: Supplier evaluation needs to be thorough, rules and metrics based. These include supplier score cards, supplier visibility through portal or dashboard and ability for the suppliers to directly enter information as part of the quality processes. By telling the suppliers what they are expected of in terms of KPIs, metrics, etc., and communicating this with them regularly, making sure they share the common vision and value, you can ascertain better collaboration. You cannot do this manually or through email or fax or phone. It is imperative that they should be part of the ‘extended enterprise’. Quality measures should be different based risk, value, strategic nature, capabilities, specialized offerings, etc. For ex., for commodity items like WiFi chipsets or DRAMs, etc., there are standard measures of quality that can be employed across product lines. For specialty items that provides competitive advantage like Retina display or in-cell touch layer, you ought to have specific measures to meet that specialized product quality and characteristics. There are other factors that will play a part in terms of quality measures: do you have enough past information to have a supplier provide dock-to-stock, or require some level of incoming inspection, what AQL level, etc. These are different from company to company or even product to product based on many factors. What’s important is to have a system in place, process and technology, so the outcome can be communicated effectively.
- You need to forget the silo mentality, and bring the business critical data elements under a single silo, whilst making the enterprise quality management another key pillar which works in conjunction with other pillar systems. This provides for seamless data interchange, closed-loop business processes based on best practices, real-time access to decision making information for managers via specific dashboards and stakeholder collaboration via direct access. Quality is presented as a companywide perspective to integrate managers and functions across the operations Quality is a cost-effectively way to measure the impact of change, risks and adverse events Quality becomes the mechanism to ensure reliable and competitive supplier-to-manufacturer processes connections Quality is the way to mitigate the high risks from interruption of deliveries Quality supports effective decision making Adjacent functions that can be considered are OHS, environmental issues, employee and workplace safety, CSR reporting, hazards reporting to name a few… These all contribute to the health of the company and cost management which lead to margin expectations, growth, customer satisfaction and SH value Q - How does EQMS allow you to factor risk into the quality decisions and how has that impacted your customers? A - Risk is a big factor that should be managed well is because of the global nature of supply chain, more standardized product designs to meet wider global demands, structured PLM and bigger reliance of strategic suppliers. So the risk is a multi-faceted element that is critical when it comes to quality. There is risk related to financial, operational when it comes to suppliers and for the companies themselves, there is brand and time to market risks that need to be managed. The various elements of risk (ex: reputation, brand, financial, legal, etc.) get amplified when the value chain is broader and corporate fortunes rely on these multi-faceted elements. Most, if not all, the customers are integrating risk model (ex: RPN based workflows, decision making, business process, etc.) as part of the quality processes. For ex: when a deviation is reported and the investigation leads the root cause as a production process deficiency, risk associated with this deviation is computed based on several factors – supplier capabilities, financial ability to manage production changes, supplier workforce competencies, use of patents, supplier location labor and geopolitical circumstances and even events caused by mother nature, switching costs to source multiple sources, etc. This could lead to a more structured formal 8D process as part of the corrective and preventive action resolutions.
- -Quality is viewed at the enterprise level. It needs to have top level endorsement and have visibility to metrics and decision making information. -Have strategies to build compliance into business processes; risk is linked to the ultimate corporate values and top/bottom lines. Make use of leading indicators instead of just events as part of the process. -Collaborate with not just your internal groups but with external and suppliers too. Effectively measure the supplier quality process and its impact on the business; provide relevant information as part of the collaboration and combined activities. -Standardize processes for managing change, risk and quality across the enterprise. Power of One is where the value is, from workflows to information to efficient decision making. However, one size does not fit all; you need a system that can provide what you need, not a common tool for all. Standardize with some variability to allow for your unique needs. -Make the quality connection between customers, manufacturing, suppliers, engineering and outcomes. Success equals quality * reliability of data * Acceptance by users