Defining True Enterprisewide Quality
April 25, 2008
An enterprisewide quality initiative means something different in terms of process reach and cost reduction benefits to each company that commits resources, time and technology to manage their quality initiatives. To get the most out of any quality initiative, companies should focus on a deep and wide approach to embedding quality processes and accountability metrics to every person, department and division within their organization and to every supplier, both local and global. Enterprisewide quality can be achieved through technology, enhanced by correlative accountability and complemented by a culture of continuous improvement.
Choking Company GrowthEnterprise resource planning (ERP) had the CFO that looked at the big picture. Engineering and computer-aided design (CAD) had the chief engineer or program manager. Despite the fact that quality touches virtually the entire life cycle, in too many companies it is the domain of a quality engineer or manager that is looking at day-to-day functions. The result is that quality is typically addressed at a tactical level.
When most companies implement their initial quality programs, the first thought is to implement processes that address separate functions of a complete quality program, such as non- conformance and corrective action (CAPA) or failure mode effects analysis (FMEA) and control plans, with inexpensive, stand-alone single-user software or home-grown database- type systems.
Other organizations turn to their ERP vendor for a quality solution. While a number of ERP vendors have partnered with quality leaders, many still have quality modules that are little more than check-list extensions of a materials list-creating yet another island of quality information. While this approach may save a company several thousand dollars, it pales in comparison to the tens and hundreds of thousands of dollars that an enterprise approach to quality can save. Like ERP, enterprise quality also streamlines operations and opens the funnel, creating a launchpad for growth.
When peeling back the covers from a company’s quality processes, it is not unusual to find that well-meaning people in inspection, quality, purchasing, human resources and other areas have all created well thought-through islands of quality information. If one is not sure if his organization has created this kind of environment, quietly follow an auditor through the next ISO or customer audit. How many data sources need to be accessed to get a complete picture of the quality processes? How many different areas carry part characteristic information? How is it synchronized?
Most executives familiar with ERP, BI tools and dashboards are surprised to learn how manual and disparate the underpinnings of their quality system are.
This all sounds like bad news, but the underlying good news is that executives are always looking for ways to cut costs without hurting the organization and truly optimize performance. Look no further than a company’s quality operation.
Where is the beginning of your quality operation? It is no secret that the earlier in the process quality is implemented, the more money it saves. As a practical matter, quality should provide a bridge to critical engineering information, and follow through to warranty and service, providing a closed loop of information back to engineering. Key areas that should be covered include:
Because of the comprehensive nature of quality and the need to reduce costs while promoting growth, the best quality management system to employ is one that is Web-based-for efficient use across the enterprise-and that is enterprisewide for binding each area of the quality process together-including engineering, purchasing, manufacturing, human resources and quality-ensuring that information flow is seamless and in real-time.
Web-based systems enable instant data visibility of any key process and inspection data through the Web so there is no delay from using fax or e-mail to facilitate the report and corrective action of an issue. Data input can be completed by an inspector in any geographic location in accordance to a predefined inspection plan. If data does not meet predefined specifications or is not input at all as a data collection point in the process, a nonconformance is automatically generated, creating a chain-reaction of “to do” items sent to engineering for taking action to correct the problem.
Enterprisewide systems lend themselves to cost reduction through nonredundant data input and cross pollination of data across the enterprise in two to three clicks of a mouse. With the ability to increase the speed of inputting, attaining and reviewing data at multiple levels within an organization, reaction time is decreased and prevention opportunities increase exponentially, which ultimately drives cost out of the business.
Internal and Supplier AccountabilityA comprehensive, Web-based quality management system will enable organizations to take quality initiatives one step further to establish, track and score the performance of both the internal team and external suppliers, all in relation to product quality. These systems make quality-related data available to managers and suppliers anywhere in the world so that metrics can be measured in real time. This capability produces several positive drivers for improved performance including:
In developing business metrics and supplier metrics, it is important to focus on specific processes related to quality that needed to be measured, and the key outcomes throughout each process that are relevant to success. These are not necessarily the easiest or the most obvious to track, but careful examination of the cause and effects of each step of a quality process makes the data more meaningful and actionable.
Steps for defining business metrics include:
Steps for defining supplier metrics include:
Leveraging Correlative Quality MetricsBy looking at all the functions within a company as dependant yet interrelated processes of a total cohesive effort, then one can understand why correlated quality metrics are a more valuable tool than department metrics for measuring and improving growth. Both have value; however, correlated metrics take into account the effect each department’s performance has on the others in a matrix type environment.
For example, engineering will be concerned with engineering changes and variation from design intent, and time to process/implement a change in the manufacturing environment, while a quality group will be focused on how many nonconformance and corrective actions have been issued and why. A series of nonconformances will guarantee an engineering change, which means that productivity will go down while the change is implemented. Reactions to a decrease in productivity will vary from manager to manager-heightening the finger-pointing effect-if not correlated to a critically needed engineering change.
Simply put, the business value of a correlated-metrics view, backed by a Web-based embedded enterprisewide quality management system, is that companies can build a historical, operationally predictability roadmap for business management and improvement that disparate metrics and systems will never be able to provide. And by managing quality from an enterprise view, companies foster team and supplier synergy for improving interconnected manufacturing processes, and greatly improving the odds for mitigating risk of quality and manufacturing issues both internally and at a supply-base level.
In today’s hyper-aware consumer market, the Internet and Web-based quality management solutions must be wholly utilized as a strategic competitive advantage if companies want to retain and grow their market share. The time has come to “go global or go home” when building business processes. No longer can an inward, myopic view be used to develop an enterprisewide system. Speed and accuracy of data must be the goal of every organization.
If manufacturing and quality data were treated with the same integrity requirements as a company’s financials, how much better would an organization become? If a manufacturer is more than two clicks from every data input or report output, it is not operating an enterprisewide system and has opportunities to reduce cost and increase efficiency within the organization. Q
Quality OnlineFor more information on enterprisewide quality, visit www.qualitymag.com to read the following articles:
- “How to Manage Quality Data Across a Global Enterprise”
- “Three Quality Data Traps”